<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  F O R M 10-K




                                   (MARK ONE)

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

| |      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

                                NTL INCORPORATED
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 DELAWARE                                 13-4105887
      (STATE OR OTHER JURISDICTION OF       (I.R.S. EMPLOYER IDENTIFICATION NO.)
      INCORPORATION OR ORGANIZATION)

 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

<PAGE>   2

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 |X| No |_|

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.|_|

The aggregate market value of the Registrant's voting stock held by
non-affiliates at March 16, 2001, valued in all cases in accordance with the New
York Stock Exchange closing sale price for the Registrant's Common Stock was
approximately $5,309,066,715.

Number of shares of Common Stock outstanding as at March 16, 2001: 276,046,920

                       DOCUMENTS INCORPORATED BY REFERENCE

                                                               PART OF 10-K
                                                                 IN WHICH
                         DOCUMENT                              INCORPORATED

                         Definitive proxy statement for           Part III
                         the 2001 Annual Meeting of the
                         Stockholders of NTL Incorporated:

                                   * * * * * *

This Annual Report on Form 10-K for the year ended December 31, 2000, at the
time of filing with the Securities and Exchange Commission, modifies and
supersedes all prior documents filed pursuant to Section 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: general economic and business conditions, industry trends, the
Registrant's ability to continue to design network routes, install facilities,
obtain and maintain any required government 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 new business opportunities
requiring significant up-front investment and availability, terms and deployment
of capital.

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 to NTL Incorporated.


                                      -2-
<PAGE>   3

<TABLE>
                                TABLE OF CONTENTS
<S>                                                                                                                 <C>
PART I..........................................................................................................       2

   ITEM 1.  BUSINESS............................................................................................       2
   ITEM 2.  PROPERTIES..........................................................................................      31
   ITEM 3.  LEGAL PROCEEDINGS...................................................................................      31
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................................      31

PART II.........................................................................................................      32

   ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........................      32
   ITEM 6.  SELECTED FINANCIAL DATA.............................................................................      33
   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............      34
   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................................      41
   ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................................................      44

PART III........................................................................................................      45

   ITEMS 10, 11, 12, AND 13.....................................................................................      45

PART IV.........................................................................................................      45

   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K....................................      45
   EXHIBIT INDEX  ..............................................................................................      46
   SIGNATURES     ..............................................................................................      52
   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS...................................................................     F-1
</TABLE>


                                       -1-
<PAGE>   4

                                     PART I

ITEM 1.  BUSINESS.

INTRODUCTION

NTL is one of the leading broadband communications and broadband services
companies in the United Kingdom and the Republic of Ireland. We also provide
telecommunications services in Switzerland, France and Australia and have made
strategic investments in broadband cable operations in Germany and Sweden.

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.

The businesses in which we operate are growing rapidly as the result of the
increased demand for communication services resulting from technological
developments and the resulting increase in demand for bandwidth and information
handling capacity. In particular, we believe that the integration of
communication services and the Internet, as well as the development of digital
wireless communication services provide us with numerous growth opportunities.

We believe that our 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
customer proposition of providing our customers with a full range of choices.

Our competitive position is underpinned by the $13.4 billion investment we have
made in our worldwide network infrastructure. We provide our broad range of
services over local, national and international network infrastructure. This
network infrastructure consists of:

-        BROADBAND COMMUNICATIONS NETWORKS in the United Kingdom that currently
         pass approximately 8.4 million homes and will be expanded to cover
         nearly 11.4 million homes in our regional U.K. franchise areas. These
         high-capacity two-way local broadband fiber networks serve entire
         communities throughout these regional franchise areas. Our fiber optic
         cables pass nearly every business 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 siamese cable consisting of two copper pair
         telephone wires and a coaxial cable, allowing us to deliver telephone,
         cable television and Internet services over a single integrated
         network. This siamese cable also allows us to deploy both cable modems
         and digital subscriber line technology for the provision of broadband
         communications services.

         Additionally, we have broadband cable networks in Switzerland, the
         Republic of Ireland and France that currently pass approximately 2.6
         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 NETWORK in the United Kingdom which
         connects all of the major population centers in the United Kingdom 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 7,800 kilometer 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, at the edge of our network and
         close to our customers. This design


                                       -2-
<PAGE>   5

         will ultimately reduce our costs and increase our ability to offer a
         broad range of voice and data solutions.

-        NATIONAL BROADCAST TRANSMISSION AND TOWER NETWORK INFRASTRUCTURE IN THE
         UNITED KINGDOM AND AUSTRALIA, which provide national, regional and
         local broadcast and wireless communications coverage. We own, lease,
         manage, or have access to, over 3,400 multi-user sites, including 2,875
         sites in the United Kingdom and 561 sites in Australia. Our fixed line
         and tower networks in the United Kingdom are interconnected at numerous
         sites.

 Our objective is to exploit the convergence of the telecommunications,
entertainment and information services industries to become the leading full
service broadband communications company in the markets in which we operate. We
offer services to residential, business and wholesale customers on a national
and an international scale. We believe that we will be able to deliver our
strategy through our entrepreneurial approach, innovative marketing,
state-of-the-art networks and technical excellence.

In this Report on Form 10-K, references to "(pound sterling)" "pounds sterling,"
"(pound)," "pence" or "p" are to the lawful currency of the United Kingdom,
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 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 certain foreign currency amounts into U.S.
dollars and certain U.S. dollar amounts into foreign currencies. These
translations should not be construed 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 $1.4955 per
U.K. (pound) 1.00, $.9388 per (euro) 1.00, $1.1940 per IR (punt) 1.00, $.1436
per FRF1.00, $.5560 per A$1.00 and $.6172 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 (the "Noon Buying Rate") on December 31,
2000. On March 16, 2001, the Noon Buying Rate was $1.4265 per (pound) 1.00,
$.8929 per (euro)1.00, $1.1337 per IR (punt) 1.00, $.1361 per FRF 1.00, $.4940
per A$1.00 and $.5828 per CHF1.00.

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)
("NTL Delaware"), at the effective time of the merger became stockholders of the
new holding company, and NTL Delaware became a subsidiary of the new holding
company. The new holding company then took the name NTL Incorporated. NTL Group
Limited, a wholly-owned indirect subsidiary of NTL which was acquired in 1996,
has a 30-year history in the United Kingdom as a provider of communications
services. NTL conducts its operations through direct and indirect wholly-owned
subsidiaries. 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.


                                      -3-
<PAGE>   6

                             NTL CORPORATE STRUCTURE

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 current NTL corporate
structure accounting for both contributions is as follows:


                          [CORPORATE STRUCTURE CHART]


                                      -4-

<PAGE>   7

               NTL'S BUSINESSES IN THE UNITED KINGDOM & AUSTRALIA

We have expanded our U.K. operations significantly over the last few years,
predominantly through acquisitions. Between October 1998 and July 1999 we
acquired the U.K. broadband operations of Comcast U.K. Cable Partners, Diamond
Cable and ComTel as well as the Westminster and Milton Keynes cable franchises
of British Telecommunications plc, or BT. In May 2000, we dramatically increased
our U.K. operations by completing our acquisition of the residential broadband
and business cable operations of Cable & Wireless Communications, now known as
ConsumerCo.

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

-        CONSUMER SERVICES, delivering broadband services to residential markets
         comprising residential telephone, analog and digital cable television,
         narrowband and broadband Internet access and interactive services.

-        BUSINESS SERVICES, comprising business telecommunications, national and
         international carrier telecommunications, Internet services and radio
         communication services.

-        BROADCAST TRANSMISSION AND TOWER SERVICES, comprising digital and
         analog television and radio broadcast transmission services, wireless
         network management, tower site rental and satellite and media services.


CONSUMER SERVICES

We are the largest provider of broadband services in the United Kingdom. As of
December 31, 2000, we had approximately 2.8 million residential cable television
and telephony customers and over 4.85 million revenue generating units, which we
refer to as RGUs. At this time, our penetration rates were approximately 34%
telephone penetration, 30% cable television penetration and 37% customer
penetration. The franchises which we have been developing since 1993 have
achieved industry leading customer penetration, ending the year at 50.7%, and
maintain exceptional retention rates as our monthly customer churn, in those
franchises,  averaged approximately 1.0% during the fourth quarter. Customer
churn at ConsumerCo has declined from 2.5% per month at the time of acquisition
to an average of approximately 1.7% per month during the fourth quarter.

We believe the most effective strategy to maximize revenues and penetration for
our residential offering 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. We believe our
customers want a value proposition based upon packages of services.


                                      -5-
<PAGE>   8

The following tables illustrate the operating statistics of our consumer
business in the United Kingdom as of December 31, 2000:

      U.K. CABLE TELEVISION AND TELEPHONY CUSTOMERS AS OF DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                   "ORIGINAL"        1998
                                     NTL(1)      ACQUISITIONS(2)   CONSUMERCO(3)     BT CABLE(4)      U.K. TOTAL
                                     ------      ---------------   -------------     -----------      ----------
<S>                                <C>           <C>               <C>               <C>              <C>
  Homes in Franchise (5)            2,090,000       3,037,600       6,049,600           234,000       11,411,200
  Homes passed                      1,450,600       2,436,300       4,315,800           189,100        8,391,800
  Homes marketed (Tel)              1,257,600       2,134,400       4,065,700                 0        7,457,700
  Homes marketed (Cable TV)         1,257,600       2,187,000       4,065,700           170,900        7,681,200
  Customers (6)                       638,000         934,700       1,197,600            72,100        2,842,400
  Single (Cable TV or Tel)             51,100         387,700         335,800            72,100          846,700
  Dual (Cable TV + Tel)               586,900         547,000         861,800                 0        1,995,700
  Telephone (6)                       614,500         846,500       1,076,200                 0        2,537,200
  Cable TV                            610,400         635,200         983,200            72,100        2,300,900
  Broadband Internet                    4,800           8,000               0                 0           12,800
  Total RGUs (7)                    1,229,700       1,489,700       2,059,400            72,100        4,850,900

  PENETRATION
  Cable TV                              48.5%           29.0%           24.2%             42.2%            30.0%
  Telephone                             48.9%           39.7%           26.5%               n/a            34.0%
  Customer                              50.7%           42.7%           29.5%             42.2%            37.0%
  RGU                                   97.8%           68.1%           50.7%             42.2%            63.2%
  Dual / Triple                         92.0%           58.5%           72.0%              0.0%            70.2%
</TABLE>

(1)      Data for franchises which NTL has been developing since 1993.

(2)      Data for the following franchises: Triangle(Comcast), ComTel and
         Diamond Cable.

(3)      Data for ConsumerCo franchises acquired in May 2000.

(4)      Data for BT Cable franchises (Westminster / Milton Keynes) acquired in
         July 1999. Results for BT Cable have been adjusted to include 10,900
         master antenna subscribers previously excluded from customer totals.

(5)      Franchise home information from The Media Map Datafile 2000.

(6)      Excludes approximately 466,000 off-net telephony customers and over 1.8
         million Internet customers.

(7)      An RGU is one cable television account, one telephone account or one
         broadband Internet account. Maximum potential RGUs per customer are
         three and maximum potential RGU penetration is 300%.

                 U.K. INTERNET CUSTOMERS AS OF DECEMBER 31, 2000

<TABLE>
<CAPTION>
     BROADBAND                                         NARROWBAND
----------------------------------------------------------------------------------------------------------------
                          NTLWORLD            NTLWORLD          NTL DIRECT                                 U.K.
     NTL DIRECT           (ON-NET)           (OFF-NET)            (OTHER)           WHOLESALE             TOTAL
     ----------           --------           ---------            -------           ---------             -----
<S>                       <C>                <C>                <C>                 <C>                 <C>
      12,800              455,600             75,700            327,400              952,800            1,824,300
</TABLE>

NTL'S LOCAL NETWORK IN THE UNITED KINGDOM

Including contributions made by the companies and businesses acquired by NTL,
the NTL U.K. group has spent approximately $11.2 billion on our network
infrastructure.

Our core network consists of optic fiber provided to distribution points, or
nodes, each serving up to 500 homes from where we provide coaxial cable and two
copper pair telephone wires into each home. This cabling enables the provision
of two telephone lines and television service into each customer's home.

Our fiber network has the capability to carry plain ordinary telephone services
as well as high-speed data services such as an integrated services digital
network, or ISDN. The fiber network is also capable of supporting digital
subscriber lines, or DSL, which consists of a bi-directional 2Mb/s connection
capable of supporting 30 voice channels that enables the provision of higher
capacity services to business customers. We


                                      -6-
<PAGE>   9

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.

Through our cable modem program we are developing an additional set of features
which will support people who work from home and small businesses, including
enabling a link to a company's local area network, or LAN. We have begun to
construct and upgrade parts of our network to utilize the next generation of
network technology using Internet protocol, or IP, over optic fiber cable
technology. This technology, in which data is broken up into discrete packets
for transmission, enables more efficient use of network capacity by removing
bottlenecks created by conventional technology where data is routed in a single
stream from point to point.

The home distribution points are on average between 80 to 100 meters from the
customer's home. This relatively short distance improves transmission quality by
minimizing the need to install amplifiers which can distort signal quality
between a distribution point and a customer's home. This fiber-based network
provides a higher level of quality and service, because there is more bandwidth
from running fiber down to 500 home nodes compared with 2,500 home nodes in the
U.S.

FIBER TO THE APARTMENT/FIBER TO THE HOME

We are in the process of developing a pilot program to bring fiber directly into
the homes of our customers. As part of this pilot program, we have deployed
fiber to a large block of apartments in the Pimlico district of Central London.
The fiber provides a high speed 10 Mb/s (Ethernet) connection to the Internet
with the ability to upgrade the throughput to individual apartments to 100 Mb/s.
If telephone modems are defined as the first generation of residential data
communications technology and cable modems/ADSL technologies are defined as
second generation technologies, then the fiber to the apartment technology we
have launched in Pimlico is the third generation of high speed Internet to the
home.

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 U.K. residential franchise customers,
excluding customers in Milton Keynes and Westminster and in ConsumerCo
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;

-        narrowband Internet access service;

-        broadband Internet access service, if the customer takes an additional
         service;

-        all of the current terrestrial television channels and access to
         multi-channel television, including pay per view; and

-        interactive television services.

Prices vary by package, but are typically below those of the equivalent
offerings of competitors. The packages are designed to provide customers with
the opportunity to add services according to their individual tastes and to
change various aspects of the bundle to meet their needs.


                                      -7-
<PAGE>   10

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. Variance
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 United Kingdom 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.

ConsumerCo launched digital cable television in July 1999 in some of its
franchise areas. In May 2000, we launched digital cable television throughout
Scotland, Northern Ireland and Wales. Digital cable television will be rolled
out to most of our remaining franchises during 2001 with the exception of some
franchises for which the roll out schedule is still being finalized.

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 which is a version of Eurosport tailored to appeal to U.K.
viewers. This channel is now available to all U.K. pay television homes.

Premium TV has also entered into long-term joint ventures with a number of U.K.
football clubs including Rangers, Leicester, Middlesbrough and the Football
League, which represents 68 clubs, and has entered into five-year operating
agreements with Aston Villa and Newcastle football clubs. These joint ventures
will develop the football clubs' Internet and broadband rights which may include
audio-visual footage of matches on a delayed basis and live audio coverage of
matches. We believe that these ventures will provide valuable content to drive
penetration of broadband services in the United Kingdom and that there is also a
substantial international market for this content.

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 are two pence per minute and weekend calls are one pence
per minute. We are able to offer the NTL 3-2-1 call 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.

INTERNET ACCESS

In March 2000, we announced a plan to offer our residential franchise customers
throughout the United Kingdom 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, 2000, we had approximately 455,600 ntlworld customers
within our local franchises and 75,700 customers outside of our franchises.

In 1999, we were the first communications provider in the United Kingdom 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, 2000, we had
approximately 12,800 cable modem customers. Over 90% 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 2.0Mb/s and is offered at minimum
delivery speeds of 64Kb/s or 512Kb/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 to simultaneously make or receive telephone calls while
accessing the Internet. This service is currently offered at a flat rate of
L24.99 per month, including the rental of a cable modem and installation.


                                      -8-
<PAGE>   11

INTERACTIVE SERVICES

We have moved rapidly to take advantage of the convergence between the Internet,
television and the advent of digital cable television. We are currently
aggregating a broad range of interactive content into a seamless 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 websites that have been specially
re-designed 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,
financial affairs and investments, entertainment and retail. Our retail channel
includes content partners such as Iceland, QVC, W.H. Smith and Domino's Pizza,
the travel channel includes content partners such as British Airways, Thomas
Cook and Lastminute.com. and the financial services channel features content
partners such as Barclays Bank, Abbey National and The Halifax.

We also offer additional channels providing games and educational content. All
of our contracts with content providers provide us with a commission on
e-commerce transactions. We have also set up a team to exploit the advertising
opportunities associated with our interactive service offering.

ENHANCED TELEVISION SERVICE

The next stage in the development of our consumer proposition is the provision
of enhanced television services. Enhanced television uses communications
technology to enable television programs to become interactive. Enhanced
television can be viewed as a modified form of interactive services which are
constantly "on supply" as the viewer watches television. Potential applications
include the ability to enable viewers to participate in game shows, access
further information in documentaries or respond directly to advertising. Viewers
use their remote controls to access the additional program information on
demand.

A major advantage of our cable technology is that these enhanced television
links are not restricted to information delivered in the broadcast stream, a
significant restriction of satellite delivered services. A broad range of
additional content can be delivered over the cable modem integrated in the
digital television set top box.

We are working with a number of major broadcasters to develop an enhanced
television service and have demonstrated a number of program pilots. Examples of
these pilots were shown at the Edinburgh television Festival in August 2000.
Moreover, on August 1, 2000, the ITN News Channel, a joint venture between NTL
and ITN, launched and became the first television channel on our Digital Cable
network to offer enhanced programming. At the press of a button on the remote,
viewers can access more detailed information on news headlines and features, as
well as check their local weather report.

ADSL TECHNOLOGY

In addition to our high-speed cable modem service, we have the technology to
offer our services using Asynchronous Digital Subscriber Line, or ADSL
technology. Each drop wire into the customer's premises in our residential
service comprises a coaxial cable for broadband services and two copper pair
telephone wires for telephone service. An ADSL technology pilot is currently
running in one of our franchises, which exploits the pair of copper wires. At
this point in time, our high-speed cable modem service has shown itself to offer
a better service mix of price, speed and quality than the deployment of ADSL
technology but we are preparing ourselves in the event that circumstances
change.

Although we are not presently pursuing the use of ADSL technology outside of our
network, we can deploy ADSL technologies using BT's copper wire infrastructure
or by taking a managed data service from BT. Taking a managed data service from
BT would provide a ready means of providing an access service to business
customers that may have many sites situated within reach of our hybrid-fiber
network but also a few sites located outside the reach of our network.


                                      -9-
<PAGE>   12
NON FRANCHISE CUSTOMERS

In 1999, we extended our consumer service offerings in the United Kingdom beyond
our cable franchise areas by launching a set of products and services that allow
us to provide telephone and Internet services to every home in the United
Kingdom with a BT telephone line and television. This retail offering has
allowed us to increase significantly our U.K. target market. Using indirect
access, customers retain their BT telephone lines, but their calls are
automatically routed to our switches and national network. We therefore receive
call revenues associated with the customers' voice traffic. As of December 31,
2000 we had approximately 466,000 customers subscribing to our "off-net"
telephony service.

MARKETING & BRANDING

Since the re-launch of the NTL brand in 1999, we have been developing a focused,
marketing oriented approach. We position NTL as the brand offering consumers
more choice, better quality and more control over their television, telephone
and Internet service. Brand awareness is achieved through the use of multiple
media outlets and a consistent message. The re-launch of our brand has created a
stable platform which enabled the successful re-branding of ConsumerCo into NTL
over a three month period, and we achieved our target of 90% customer awareness
of the integration of ConsumerCo into NTL following the closing of the
acquisition.

Visually, the NTL brand is easy to recognize. We believe it conveys the
excitement and innovation of NTL, and reflects the unique spirit that comes from
the basic company philosophy - "make some money, do some good and have some
fun," and highlights our focus on innovation, customer service and
entrepreneurial spirit. Given the pace of change in the market, however, we have
needed to reassess the positioning of our brand in order to stand out in a
crowded marketplace. We are accomplishing this repositioning by demonstrating
the benefits of our unique position, in having the capability to provide
consumers with a single source solution for television, telephone and Internet
services emphasizing value. Put simply, our message to consumers is "NTL
utilizes technical innovation to create the practical, everyday tools that
people need to live their lives and run their businesses."

The series of high profile sponsorship deals we entered into throughout 2000
also helped to build recognition of NTL as a household name. The recent
sponsorship of the hit television show "Who Wants To Be A Millionaire" proved to
be a huge success for achieving a substantial increase in both product and brand
awareness giving NTL a prompted brand awareness of 87% compared to 35% in June
1999 (according to Millward Brown, November 2000). Sponsorship of football clubs
such as Celtic, Rangers, Aston Villa and Newcastle United provides us with
national reach, stature and appeal among a core target audience. This
sponsorship also provides a solid base from which to sell more of our products
and services in key geographical areas.

We plan to continue to invest in advertising to maintain a strong brand that
unites all of our acquired companies and franchises under one umbrella. This
will mean that awareness of NTL as a brand, and understanding of our products
and services can be driven forward within the market place, thereby helping to
increase both sales and brand equity.

In 2001, we aim to achieve our business objectives of increasing subscribers and
revenue by providing a first rate advanced technology service to customers at a
competitive price while at the same time bringing to life our brand positioning
through support of our products and services. We are working to achieve this
goal through the continuation of the multi-media approach to advertising which
began at the time of the re-launch and includes outdoor posters, television,
press, radio and a comprehensive online campaign. Our brand advertising is
supported by a strong tactical and targeted campaign using direct response media
such as direct mail, regional radio and press. The increased coverage of our
franchise areas following our recent acquisitions, and our off-net indirect
access services, will allow us to target a wider audience using more efficient
marketing campaigns.


                                      -10-
<PAGE>   13

CUSTOMER MANAGEMENT SYSTEMS

We are highly focused on customer service and invest significantly in our
employees, processes and advanced technology in order to provide the best
service to our customers. We use advanced billing and customer management
systems enabling 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 cable franchises 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.

IT SERVICES OUTSOURCING DEAL WITH IBM

On January 11, 2001, we announced that we had signed a non-binding memorandum of
understanding with IBM setting forth both parties' intention to explore ways to
extend our current relationship to form a strategic alliance. Under the proposed
agreement, which we expect will be finalized in May 2001, IBM will provide IT
services for all of our operations in the United Kingdom and Ireland through
2008. We intend to retain control of our IT activities that are fundamental to
our competitive advantage and key to the development of our intellectual
property.

DIGITAL MEDIA CENTER

We have invested approximately $66.0 million in a new media center which is at
the heart of our digital operations. The center serves as the marshalling point
for all digital content, both for television and interactive services.
Television and interactive services are brought to the center over satellite or
fiber telecommunication links. Currently a 55 channel near video on demand
service is produced using advanced digital storage and server technology. A
complete sports channel, British Eurosport, is originated in the media center.
In addition to the interactive television elements, conditional access for pay
television and electronic program guide datastreams are created and played out
from the center.

The media center also houses the interactive servers for on-demand elements and
is the point at which the broadband cable modem path is routed to access the
Internet. The interactive system, scheduling and conditional access system are
directly integrated with our customer management system. This allows direct
customer interface through the television screen for billing, on-line help or
self-provisioning of new services. The system is controlled by a sophisticated
scheduling system and control room that monitors all channels. The resulting
service feed is carried from the center to each regional head-end, where the
cable signal originates, using ATM technology. This feed is then combined with
local content, such as regional television channels for delivery over that local
network. The system is capable of allowing full flexibility of the regional line
up of channels, to include regional services from the major broadcasters, such
as ITV, Channel 4 and the BBC.

The media center is connected to our U.K. national network and linked to our
satellite hubs for both in-bound and out-bound traffic. The system architecture
and flexibility allows the delivery of a customized service to any point
connected to our fiber telecommunications network. For example, the current
reach of our network includes Dublin which allows us to connect Cablelink's
Dublin franchise to the media center.

ACQUISITION OF CONSUMERCO

On May 30, 2000, we completed our acquisition of the residential cable, business
cable, indirect residential telephony, residential internet and digital
television development and services businesses from Cable & Wireless
Communications plc. We have been integrating these operations and facilities
into our existing cable operations and franchise areas. On July 26, 1999, we
announced that with the support of France Telecom, we had agreed to this
acquisition.

We issued as aggregate consideration approximately 85 million shares of NTL
common stock and paid approximately (pounds sterling) 2.92 billion in cash to
Cable & Wireless Communications stockholders, plus cash payments for fractional
shares. We also repaid approximately (pounds sterling) 2.2 billion in Cable &
Wireless Communications' allocable net debt. In connection with the acquisition,
we entered into bank credit facilities comprising a (pounds sterling) 2.5
billion credit agreement and a (pounds sterling) 1.3 billion credit agreement to
refinance indebtedness and for working capital purposes.

On May 30, 2000, we completed an investment by France Telecom of $4.2 billion,
which was previously announced on July 26, 1999. We issued and sold to France
Telecom 42,229,730 shares of common stock at a


                                      -11-
<PAGE>   14

per share price of $59.20 and 2,000,000 shares of 5% cumulative participating
convertible preferred stock, series B, having an aggregate liquidation
preference of $2 billion, a conversion price of $80.00 per share and a
redemption price of $96.00 per share. We used the proceeds from the
France Telecom investment, as well as our existing cash resources, to fund the
cash portion of the payments to Cable & Wireless Communications stockholders.


BUSINESS SERVICES

The primary objective of our business services division in the United Kingdom
"NTL Business" is to provide a comprehensive range of voice, data and
application based communications solutions for our customers. 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 undergone a business transformation since the beginning of 2000
as we have moved away from a simple geographic or product based sales approach
to one where customers are grouped into specific market sectors. The key element
of this transformation program has been the integration of 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 customer support organization.

NTL Business is now focused on three key market sectors within the overall U.K.
communications market. These segments are "small and medium retail", "large
retail" and "wholesale". For organizational purposes, the first two of these are
further subdivided: "small and medium retail" into small businesses markets and
national markets, and "large retail" into public sector markets and enterprise
markets. 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.

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 L24
billion for the year 2000. Of the total communications market, we estimate that
approximately pound sterling 16.5 billion represented business
telecommunications and carrier telecommunications services.

Our network already passes more than 430,000 business premises in the United
Kingdom. However, as a result of the reach of our national network, we can serve
a substantial portion of the United Kingdom's approximately 1.2 million business
premises through means such as indirect access. These premises host
approximately 1.5 million business customers. The architecture and reach of our
network infrastructure has positioned NTL Business to play a leading role in the
delivery of broadband services to U.K. businesses going forward. We plan to
exploit demand for broadband services primarily through our broadband cable
modem product which we expect to rollout in the second quarter 2001, and our E-1
Direct Internet Access Service, which we currently provide. We will continue to
market our standard products and services ranging from telephony and Internet
access to web hosting, data and e-commerce and managed services. These services
will be delivered via copper wire, coaxial cable, fiber and wireless.

BUSINESS RETAIL MARKETS

In our local retail markets, we describe ourselves as "thinking nationally but
acting locally." Our business purpose is to enable businesses to become more
efficient and effective. Our focus is on both large national businesses and
small businesses.

Our national business market team focuses on relationship management of the
large national or multi-national corporations that have their headquarters
within existing network footprint.

Our business model for dealing with small businesses has changed dramatically
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
United


                                      -12-
<PAGE>   15

Kingdom. Under this new business model, we utilize direct mail and marketing
skills derived from our customer experience. In the second quarter of 2001, we
plan to add broadband services to the business bundle and our management of
these accounts will be increasingly web-based.

Across these chosen market sectors, we believe that by utilizing our national
telecommunications broadband capability, and the expertise of our market focused
account management and technical support teams, we can target specific business
sectors and drive up our penetration of that sector. It was with this goal in
mind that NTL business launched its market sector focused business approach in
the third quarter of 2000.

As of December 2000, we had approximately 76,300 business customers with an
average of 4.4 lines per customer for a total of approximately 339,500 retail
business telephony lines installed in the United Kingdom.

An example of our sector focused strategy is the success we have had penetrating
the public sector market, which includes education. We support customers all
across the education spectrum within the United Kingdom. One of our education
customers is the Hertfordshire County Council. We provide the "Hertfordshire
Grid for Learning," a managed network service for 566 schools in Hertfordshire
county. We deliver and manage the servers, network connectivity, e-mail domain,
security and filtering service for each of those 566 schools. Similarly, we
support the Technology Colleges Trust, for the Specialist Schools national
network, "Supergrid," which serves over 100 schools with a broadband intranet
and Internet service. We provide student and academic services to more than 15
universities through the United Kingdom and Internet access to more than 5,200
primary and secondary schools.

Another example in the public sector is our work with public safety service
providers. Our public safety 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 the
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 United Kingdom for
many years and our public safety customers provide us with a steady source of
revenue.

We intend to further expand our activities in the public safety sector from
facilities and maintenance activities into complete outsourcing arrangements. We
are pioneering the evolution of Managed Communication Services in the public
safety sector, and we believe that the majority of the British Public Safety
Services will in the foreseeable future 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 we 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.

An example of the success of our market sector approach in the enterprise sector
is our relationship with the electricity distribution company TXU. Our
relationship with TXU has evolved from our initial provision of switched voice
service to our current position in which we provide an element of each of our
other product offerings to TXU. We were able to broaden this relationship by
utilizing our relationship as TXU's trusted switched voice provider. We have
worked to develop a solution which reflects the developing utility business
model and addresses our customer's requirements for managed networks and
facilities outsourcing.

Our current relationship with TXU, which we hope to replicate with other
customers, comprises services ranging from traditional connectivity to
outsourced managed Wide Area Network (WAN) and Local Area Network (LAN) packaged
so as to provide an overall customer solution. These customer relationships tend
to have long-term arrangements (three to seven years) and also incorporate
services provided by third-party organizations and NTL partnerships.

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

-        ACCESS SERVICES that 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. 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


                                      -13-
<PAGE>   16

         and indirect suppliers. In the second quarter of 2001, we plan to
         launch a business cable modem service that will enable the delivery of
         broadband services to our business customers.

-        MANAGED VOICE SERVICES/VIRTUAL PRIVATE NETWORKS that 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 thereby allowing our customers
         to avoid the expense associated with an outright capital purchase and
         maintenance costs.

-        MANAGED DATA SERVICES that include point to point private circuits at
         speeds of multiples of 64Kb/s and individually tailored 100Mb/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. Our ability to
         design, deploy and manage a customer's data services was greatly
         enhanced by the acquisition of Workplace Technologies (now known as NTL
         Business) in September 1999, which provides consultancy services to
         assist in the design and installation of data, voice and video networks
         and provides remote monitoring and support of these networks.

-        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 SERVICES that 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, we 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 bring our national
telecommunications network over the "last mile" to the premises of those
customers which are located outside of our franchise area:

-        As a certified national public telecommunications operator, we can
         readily obtain permits to construct telecommunications networks, and
         can build 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.

-        We can lease 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.

-        We have the ability to connect customers to our national
         telecommunications network by implementing microwave radio links. We
         can use our significant tower infrastructure to connect our network to
         our customers, using digital point to point microwave radio links.
         Alternatively, because we hold a license to operate radio fixed access
         services on a national basis throughout the United Kingdom at the 10
         Ghz frequency, we could effectively use "wireless local loop"
         technology to connect our network to our customers, although we are not
         currently utilizing this approach to connect our customers. 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.

BUSINESS WHOLESALE MARKETS

Our wholesale markets group's main area of business is supplying U.K.
infrastructure and bandwidth to national and international telecommunications
operators. Our national and local networks are used to interconnect these


                                      -14-
<PAGE>   17

carriers to cities in the United Kingdom 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. Additionally, we continue to provide tailored
solutions necessary to serve this demanding market.

We believe that owning core infrastructure also opens up avenues for
international network expansion. Increasingly, network operators are looking at
minimizing capital outlay by swapping capacity on their infrastructure for new
nodes or additional capacity elsewhere.

Our customers include fixed wire line and mobile telecommunications operators
such as COLT, Energis and Global One, other cable operators, Internet Service
Providers, or ISPs, and various information technology and facilities management
companies. A dedicated team addresses the needs of the U.K. mobile operators,
and we are a major supplier to Vodafone and Orange. We have developed a
successful business supplying core interswitch network capacity to U.K. mobile
operators. We 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 a five-year L150 million contract by Orange. A key element of
the contract is the extension of our existing core network. All five third
generation mobile operators will need to implement network and services to
support UMTS services, and we will work to define and co-ordinate our
company-wide strategy for supporting UMTS services.

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

-        creating a self sustaining revenue stream in its own right,

-        establishing commercial relationships with wholesale customers thus
         enabling us to cross-sell and up-sell other products, and

-        generating revenue and cost reduction opportunities for other parts of
         NTL and strategic relationships with, for example, NTL Ireland, NTL
         Europe, and with international operators such as France Telecom.

The growth in the number of international operators building and operating
submarine cable systems has been substantial and continues to increase, with
many of the cables transiting the United Kingdom. We have considerably increased
physical connectivity to U.K. 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 U.K. international nodes
such as Telehouse, London, which services are also known as "backhaul" services.

We believe that the U.K. market for business wholesale data services is
significant and growing rapidly due to the fast growth in IP, Internet and other
data traffic. Utilizing our ATM national network, we have developed Frame Relay
and ATM wholesale products to meet this increasing 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 U.K. bound and origination of
U.K. 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 U.K. ISPs and other
corporate customers that would like to expand their Internet presence. This
service was launched in 1995.

In 1996, we established the VirginNet joint venture with Virgin Communications
Limited. The joint venture is currently owned 49% by NTL and 51% by Virgin. In
July 2000, we announced our intention to acquire 100% of VirginNet's ISP
business with Virgin assuming ownership of VirginNet's content and commerce
business. However, we have not yet reached an agreement with Virgin and there
can be no assurance that such an agreement will be reached. We also run the
network and technical contact center for Which?Online, an independent consumer
organization as well as the technical contact center for Vizzavi, the mobile
Internet portal for Vodafone.


                                      -15-
<PAGE>   18

BROADCAST TRANSMISSION AND TOWER SERVICES

We are a leading independent owner and operator of wireless communication and
broadcast transmission infrastructure in the United Kingdom and 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 U.K. 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 U.K. and Australian broadcast customers.

We believe that the scope of our business allows us to differentiate ourselves
by providing 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
         United Kingdom and one of the largest towers and sites portfolios in
         Australia. In total we operate over 2,600 multi-user sites, up from
         approximately 600 sites in May 1996. We lease space on our towers to
         over 4,000 lessees including all of the major wireless operators in the
         United Kingdom and also offer unique services such as In-Building
         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 United Kingdom
         as well as the only national broadcasting infrastructure network in
         Australia. Additionally, we have national, regional, and local radio
         broadcast infrastructure networks in both the United Kingdom and
         Australia. We developed the first commercial digital terrestrial
         television service in 1998 and the first all 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 United Kingdom and value-added services such as playout, fixed
         and mobile satellite uplinking, and a wide range of occasional
         broadcasting services to generate incremental revenue.

Based on our track record of more than 50 years of providing broadcast services
to the United Kingdom and other markets and our expertise in digital
broadcasting, we believe that we are uniquely positioned to capitalize on the
trends towards privitization, outsourcing and digitalization of broadcast
transmission infrastructure and the tremendous growth opportunities in the
wireless communications industry.

We believe there is a global trend for governments and broadcasters to divest
their transmission networks. Similarly, wireless carriers have begun to divest
the tower portfolios as a means of monetizing what they believe to be
non-strategic assets. We are one of two companies with experience in the
transition of broadcast assets from public to private ownership and subsequently
operating the privatized broadcasting assets. Our successful track record helped
us obtain the National Transmission Network contract in Australia and should
assist us as other governments begin to look at privatizing their broadcasting
assets around the world.

SITE LEASING AND SERVICES.

We operate a wireless infrastructure network of approximately 2,600 multi-user
sites as of December 31, 2000. We own, lease or manage approximately 1,800 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.


                                      -16-
<PAGE>   19
Our network in the United Kingdom is national in scope and includes most of the
major population centers and highways. We operate 1,406 sites and have access to
791 undeveloped sites in the United Kingdom Our wireless customers currently
include all of the U.K. mobile telephony operators, including Vodafone AirTouch,
BT Cellnet, Orange, One2One and Dolphin, all of the five major paging companies,
and many of the United Kingdom'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 U.K. government awarded five national
Universal Mobile Telecommunications System, or UMTS, 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 U.K. population by December 2007. We
believe that each of these operators will require a complete national network
based around a radio site infrastructure of up to 4,000 sites by 2003 and
potentially up to 10,000 or more sites by 2010. Construction of these networks
is anticipated to begin in 2001 and is expected to generate significant demand
for suitable sites over the next few years as well as for existing sites. A
major reason that there will be an increase in the need for suitable sites for
third generation towers is due to the fact that third generation networks
require a greater density of towers than current second generation networks
because of their smaller range in relation to second generation technology. Our
network in Australia is also national in scope and we believe that the recent
UMTS license awards in Australia will offer opportunities for growth in wireless
sharing.

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 initial analysis
shows that there are approximately 2,000 of these types of commercial properties
in the United Kingdom. To this end, we have won contracts for 25 buildings
including the exclusive contract to provide this service inside Bluewater,
Britain's largest shopping complex and recently, a contract for 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 UMTS 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 network to remote base
stations, could improve coverage and service quality compared to more
traditional rooftop sites for UMTS technology. Furthermore, we would offer the
ability to backhaul base station calls through our fiber loop.

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 United Kingdom's first
independent commercial television network. Through our national infrastructure
of owned and shared transmission sites and our owned network of transmitters in
the United Kingdom and Australia, we provide broadcast signals for the three
commercial national television channels in the United Kingdom, the two
publicly-owned national broadcasters in Australia and many of the United
Kingdom's independent local, regional and national radio broadcasters.

Our broadcast customers generally hold long-term licenses and enter into service
agreements with us that typically last 10 to 15 years. As a result, this portion
of our business is characterized by stable and predictable revenue streams and
currently has a forward order contract book of over $3.5 billion. 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. The nature of these arrangements, make it very difficult and
even cost prohibitive for broadcasters to switch to another service provider. 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.


                                      -17-
<PAGE>   20

Television broadcasting. We provide digital and analog broadcast transmission
services for national and regional television broadcasters, covering 99.8% of
the U.K. population, with approximately 3,500 broadcast transmitters. Our
extensive television broadcast customer base includes all of the U.K. 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 United Kingdom. In
addition, we provide transmission and site services to both of Australia's
publicly-owned national broadcasters, ABC and SBS.

As one of the first companies to offer digital transmission services we believe
there are some significant first mover advantages. We provide digital
terrestrial broadcast transmission for two of the three commercial national
digital television services in the United Kingdom. These services carry up to 12
separate channels, including the ITV network, Channel Four, Channel Five and a
range of new digital channels and services such as pay per view. As of December
2000, we were operating 80 digital terrestrial television transmitting stations
reaching around 88% of the U.K. population. It is anticipated that the digital
network will ultimately grow to match the coverage of the analog system. In
order to achieve the same high level of coverage for digital, we believe that
the same number of sites as those for the existing analog services will be
required, which will represent a significant business expansion opportunity for
us.

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 United Kingdom. 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.

SATELLITE AND MEDIA SERVICES

We own and operate satellite up-linking facilities consisting of 30 fixed
satellite uplink dishes able to access over 50 satellites with global coverage,
a network of mobile and transportable uplinks, management and control systems
and all associated operations and maintenance. We provide our satellite
customers with program and content distribution services for over 130 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 just recently completed construction of a
         state-of-the-art playout facility outside of London and are in the
         process of constructing a second to enhance our capabilities as demand
         from broadcasters across Europe continues to rise.

-        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


                                      -18-
<PAGE>   21

as AOL/Time Warner (CNN, Turner, Cartoon Network), BBC, Discovery Channel, QVC,
Reuters, the Associated Press and British Sky Broadcasting.

RECENT TRANSACTIONS

ABC Broadcast Contract. In December 2000, we were awarded a broadcast contract
from Australia Broadcasting Corp., or ABC, to build out its digital terrestrial
television broadcast network. Under the terms of the contract, we will design,
build, manage and operate the transmission services for a 15-year period. The
contact has a total estimated value to us of A$1.1 billion (U.S.$600 million).
In addition, ABC has an option to extend the contract for an additional 5 years
for approximately A$200 million (U.S.$100 million).

National Transmission Network. In April 1999, we acquired National Transmission
Network in Australia, whose terrestrial television and radio transmission
networks are used to deliver national services to broadcasters. The acquisition
included 561 transmission sites and long-term analog broadcast contracts with
ABC and SBS, the two national broadcasters in Australia. The broadcast network
is the most extensive in Australia and covers over 98% of the population.

NTL Satellite Downlink Services. NTL secured a 10-year contract with Cable &
Wireless to provide satellite downlink services for the distribution of
Australian Broadcasting Corporation digital television in regional and rural
Australia. The value of the contract is approximately A$65 million (U.S.$36
million). This follows NTL Australia winning the largest, fully outsourced,
digital terrestrial television broadcast contract in Australia from the
Australian Broadcasting Corporation in December 2000. NTL will provide downlink
services from satellite to transmission towers at a potential 240 sites across
Australia. The 10-year satellite contract for digital distribution services will
begin on July 1, 2001. Satellite is the preferred distribution medium for rural
and remote areas where land-lines (fiber or copper) are not available.


                                      -19-
<PAGE>   22

        NTL'S BUSINESSES IN CONTINENTAL EUROPE & THE REPUBLIC OF IRELAND

EUROPEAN EXPANSION

Our objective in expanding into Continental Europe is to replicate our success
in the United Kingdom and create Europe's leading broadband communications
company.

We have made several strategic investments in leading European markets during
the last two years. In July 1999, we acquired Cablelink in the Republic of
Ireland, with 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 on the Continent, 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 Scandinavia, which is
deploying fiber directly to the home throughout Sweden and Norway. In August
2000, we announced that we intend to make a 27% minority investment in Noos
S.A., the market leading French broadband company. Finally, in August 2000, we
acquired a 50% interest in eKabel InvestCo, which owns 65% of eKabel L.P., the
Hessen cable network in Germany.

Our European strategy has four key components:

-        acquire well-positioned cable companies in major markets with
         attractive demographic characteristics,

-        upgrade network infrastructure for delivery of advanced broadband
         solutions to consumers and businesses,

-        replicate our success with bundled services in the United Kingdom in
         order to drive penetration of new products and maximize profitability
         per subscriber, and

-        realize economies of scale through continued integration while
         maintaining a regional focus on customer operations.

We have made significant steps in achieving these goals. Cablecom, in
Switzerland, Cablelink, in Ireland, 1G Networks in France and eKabel in Germany
are well-positioned cable companies in major markets. We continue to upgrade the
networks of these cable companies for the delivery of bundled digital cable
television, high-speed Internet and telephony services to the consumer market
and advanced broadband services to the business community. Additionally, we plan
to connect these national and regional broadband networks to our pan-European
fiber backbone.

We have secured agreements with major international telecommunications carriers
giving us a high capacity dark-fiber backbone network connecting any combination
of up to 24 cities of our choice throughout Europe. These agreements were
realized by swapping excess capacity on our U.K. networks, and will be utlized
as needed over the next 24 months.

Our investments to date highlight our strategy of focusing European investment
activity in desirable communications markets. Following completion of our
announced transactions, we will have a premier footprint across Europe,
including:

         -        Europe's three largest financial centers -- London, Paris and
                  Frankfurt;

         -        Europe's wealthiest population -- Switzerland;

         -        Europe's fastest growing economy -- Ireland; and

         -        Europe's most advanced broadband market -- Sweden.

These investments offer substantial opportunities for growth by building on our
considerable market expertise and success in marketing and promoting
communication services in the United Kingdom. Our goal in these markets is to
grow revenues from bundled subscriptions of digital cable television, high-speed
Internet and


                                      -20-
<PAGE>   23

telephony services using our experience in driving take-up through product
bundling, value propositions, greater choice and high levels of customer
service. After giving effect to announced transactions at December 31, 2000 we
had access, on a gross basis, to 20.3 million homes across the United Kingdom,
Ireland and Continental Europe, and served approximately 8.5 million customers.

Each of our subsidiaries and investments in Europe has experienced management
teams. We expect to continue emphasizing local management teams, as this has
been one of the hallmarks of our success in the United Kingdom. To ensure a
consistent and focused execution across all the investments in Europe, we
recently assembled a management team solely focused on overseeing and managing
our operations and investments in Europe. Bruno Claude has recently joined NTL
as Chief Operating Officer Europe. Steve Wagner and Hamid Heidary have also
joined the European team as Managing Director Consumer Services and Chief
Technology Officer, respectively. Together, Steve and Hamid have been in senior
positions with NTL for over 14 years.

The following table illustrates our broadband position in Western Europe,
including that in the United Kingdom:

    Western Europe Customer Statistics as of December 31, 2000 (in Thousands)

<TABLE>
<CAPTION>
                                (U.K.)    (Ireland)   (Swiss)      (France)   (France)     (Germany)   (Sweden)  Gross (2)
                                 NTL      Cablelink   Cablecom(1)     1G        Noos         eKabel       B2       Total
                                                                              (pending)
<S>                           <C>         <C>         <C>          <C>        <C>           <C>         <C>      <C>
Ownership Interest                 100%       100%                    100%         27%         32.5%       25%
Homes in Franchise            11,411.2      420.0     1,887.9       287.0     3,179.0       2,800.0     305.7    20,290.8
Homes passed                   8,391.8      417.7     1,887.9       265.5     2,563.0       1,828.0     101.0    15,454.9
Homes marketed (Telco)         7,457.7       10.7        --          --           1.0          --        --       7,469.4
Homes marketed (Cable TV)      7,681.2      417.7     1,705.8       212.4     2,563.0       1,828.0      --      14,408.1
Homes marketed (Ethernet)         --         --          --          --          --            --        51.6        51.6
Customers (On-Net)             2,842.4      370.2     1,558.4        48.6       765.0       1,294.0      15.0     6,893.6
     Single RGU                  846.7      367.9     1,531.2        48.6       718.0       1,294.0      15.0     4,821.4
     Dual / Triple RGU         1,995.7        2.3        27.2        --          47.0          --        --       2,072.2
Cable Television               2,300.9      370.2     1,558.4        48.6       747.0       1,294.0      --       6,319.1
     Digital                     530.7       --          21.0        --         244.0          --        --         795.7
Telephone (Direct)             2,537.2        2.3        --          --           1.0          --        --       2,540.5
Broadband Internet                12.8       --          27.4        --          63.0          --        15.0       118.2
RGUs                           4,850.9      372.5     1,585.8        48.6       811.0       1,294.0      15.0     8,977.8

Total Internet Subscribers     1,824.3       --         179.2        --          63.0          --        15.0     2,081.5
    Off-Net Subscribers        1,036.6       --          --          --          --            --        --       1,036.6
Telephone (Indirect)             466.0       --          --          --          --            --        --         466.0
Business Customers                76.3        1.0         3.2        --          38.0          --        --         118.5

Total Customers                4,421.3      371.2     1,561.6        48.6       803.0       1,294.0      15.0     8,514.7
Total Consumer Services        7,128.4      372.5     1,737.6        48.6       811.0       1,294.0      15.0    11,407.1

PENETRATION Cable Television      30.0%      88.6%       91.4%       22.9%       29.1%         70.8%       na        43.9%
Telephone                         34.0%        nm          na          na          na            na        na        34.0%
Customer                          37.0%      88.6%       91.4%       22.9%       29.8%         70.8%     29.1%       47.8%
RGU                               63.2%      89.2%       93.0%       22.9%       31.6%         70.8%     29.1%       62.3%
Dual / Triple                     70.2%       0.6%        1.7%        0.0%        6.1%          0.0%      0.0%       30.1%
</TABLE>

(1) Cablecom is 100% owned by NTL, however, Cablecom itself retains various
ownership interests in 28 different cable systems amounting to the consolidated
operating statistics detailed above. The portion of these systems in which
Cablecom does not retain an equity interest amounts to the following: 187,600
homes passed, 157,900 homes marketed, 151,600 Cable TV customers, 200 broadband
Internet subscribers and 151,800 RGUs.

(2) Gross subscriber information assumes NTL owns 100% of B2, Noos, eKabel and
each of the cable systems in which Cablecom retains an ownership interest.


                                      -21-
<PAGE>   24

SWITZERLAND

CABLECOM GMBH

In March 2000, we acquired the business and assets of Cablecom GMBH,
Switzerland's largest cable operator, from Swisscom AG, Siemens Schwiez AG and
VEBA Telecom CMBH for approximately CHF 5.8 billion ($3.5 billion).

Cablecom is Switzerland's largest cable operator with approximately 53% of the
Swiss cable television market as of December 31, 2000. As of December 31, 2000,
Cablecom delivered products and services to 1.4 million subscribers in its own
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 480,000 subscribers, including third party wholesale and partial
ownership of signal. Over 90% of television broadcasting in Switzerland is
delivered over cable networks. Cablecom has recently launched digital television
and high-speed Internet services.

Cablecom also owns SwissOnline, one of the largest Internet service providers in
Switzerland with approximately 148,000 customers as of December 31, 2000.
Cablecom already has a telecommunications license to provide data consisting of
Internet, leased lines and asynchronous transfer mode, and value added services
throughout Switzerland and it plans to submit an application to extend the
licenses for the provision of voice telephony.

Through this acquisition, NTL became the largest alternative fiber link
telecommunications operator in the Swiss telecommunications market.

We plan to develop Cablecom's business beyond basic television services. Our
objective is for Cablecom to become the premier provider of communications
services for Switzerland's residential and business markets.

Core elements of our strategy for Cablecom include:

         -        Introducing value added services, including digital
                  television, pay-TV, interactive-TV, video- and
                  audio-on-demand, high-speed Internet and telephony, and

         -        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.

         -        Increasing capacity in major cities and suburban areas and
                  implementing bi-directionality,

         -        Accelerating the ongoing build-out and upgrade of the
                  nationwide fiber backbone,

We are planning to selectively replicate our U.K. model in Switzerland,
utilizing our experience and expertise in bundling services to drive penetration
for new services and increase subscriber profitability.

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 nearly 84% of total managed subscribers. As of
                  December 31, 2000, Cablecom had 53% market share in
                  Switzerland and a penetration rate of 91% of homes passed, 65%
                  of homes passed have been converted to digital and 37% of
                  homes passed had bi-directional capability. Approximately
                  21,000 digital customers and 27,000 broadband Internet
                  subscribers were connected at year-end. By the end of 2001,
                  over 57% of homes passed will be two-way capable.
                  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.


                                      -22-
<PAGE>   25

         -        SwissOnline. SwissOnline, a wholly owned Cablecom subsidiary,
                  is one of Switzerland's largest Internet service providers and
                  the operator of one of the leading portals in the country. As
                  of December 31, 2000, SwissOnline had approximately 148,000
                  subscribers.

         -        National Telecoms. National Telecoms, formerly know as the
                  Carriers Solutions division, was launched in January 1999 to
                  offer advanced data services to small and medium sized
                  businesses. Services provided by the National Telecoms
                  division include leased lines, virtual private networks,
                  connectivity, and carriers' carrier services. Cablecom intends
                  to intensify the roll-out of its national telecommunication
                  services once its national SDH fiber ring is completed, which
                  we currently expect to occur by the end of 2001. Cablecom 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. Cablecom believes the small and medium sized
                  business market segment is less competitive than the large
                  business segment, which has attracted competition from
                  domestic and international operators.

         -        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. In the future,
                  Cablecom plans to leverage Rediffusion's extensive
                  distribution 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.

         -        Engineering. Cablecom Engineering AG ("CCE"), a wholly owned
                  subsidiary of Cablecom, provides cable television engineering
                  services to Cablecom and third parties. CCE is the leader in
                  Swiss cable television engineering with a market share of 75%.
                  Services include cable television systems and network
                  infrastructure planning and design, project management, and
                  network measurement and maintenance.

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

                  -        Fiber optic backbone

                  -        Hybrid-fiber coaxial or "HFC" network

                  -        In-house installations

This upgrade program is scheduled to extend through 2003, with over $220 million
spent in the last two years. The network upgrade program will include the
completion of a national fiber optic backbone by the end of 2001 which is
expected to be approximately 2,000 kilometers long covering approximately 75% of
Switzerland and will be one of the only two national fiber rings in Switzerland.

Cablecom expects that 90% of homes passed will be upgraded by the end of 2002,
and 95% will be upgraded by the end of 2004. Moreover, as HFC networks in each
area are upgraded Cablecom will upgrade 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 set-top-box,
Cablecom subscribers can access an additional 30 digital channels for free, as
part of their basic television subscription offering. Cablecom began the rollout
of its SwissFun digital television offering during 2000, concurrent with the
upgrade of its regional networks. Gradually, Cablecom will move to an
all-digital platform and by the end of 2005 will no longer offer analog
services.

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 attractive pay packages. This customisation
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, which is limited in choice and high in price.


                                      -23-
<PAGE>   26
 INTERNET SERVICES. Cablecom is well-positioned to take advantage of rapidly
increasing Internet usage in Swiss households and businesses. 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. By the end
of 2002, approximately 90% of Cablecom's subscribers will be able to subscribe
to Cablecom's new broadband Internet services. Cablecom currently provides cable
modem services to 27,000 subscribers.

In its franchise areas, Cablecom will offer 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 will be
able to provide broadband local loop infrastructure access to over 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 Telegeneve.

IRELAND

CABLELINK

In July 1999, we acquired Cablelink Ltd. in the Republic of Ireland, with over
417,000 franchise homes in Dublin, Galway and Waterford for approximately IR
pound 535 million (approximately $693 million).

Cablelink provides cable television services in Dublin, Galway and Waterford to
over 370,000 subscribers. As of December 31, 2000, Cablelink had an 88.6%
penetration rate over its broadband cable network which passes 417,000 homes.
Cablelink holds licenses to provide analog and digital television services in
its franchises for the next 13 years with exclusive rights for the next three
years. It also has a full service license allowing it to provide public
telephony, Internet and other value-added services throughout Ireland.

We have already achieved the following key objectives since acquiring Cablelink:

         -        We have re-branding all of the Cablelink franchises to NTL.
                  NTL's audited brand awareness has now grown to 90%.

         -        The service portfolio has now been expanded beyond basic cable
                  television to include telephony, dial-up Internet and cable
                  modems.

         -        We have opened a new customer management center which has led
                  to significantly improved levels of customer service.

         -        We have completed network upgrades for approximately 30,000
                  homes in Dublin.

The main focus of activity for 2001 is to roll-out digital television service in
the three Irish franchise areas of Dublin, Waterford and Galway. We anticipated
that 115,000 homes will be capable of receiving a digital signal in Dublin by
September in compliance with our regulatory milestones. We expect that digital
service will be available in Waterford and Galway in the fourth quarter of 2001.


FRANCE

1G NETWORKS

We acquired France Telecom's 1G Networks in two steps in August 1999 and
December 1999 for an aggregate purchase price of FRF 373.2 ($60 million). As of
December 31, 2000, 1G Networks provided services to over 48,000 homes in Greater
Paris and Toulon. Pursuant to our purchase agreement, we hold 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.


                                      -24-
<PAGE>   27

NOOS S.A.

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. Pursuant to the agreement, NTL will acquire 27% of Noos
for approximately $627 million, based on an enterprise value of Euro 2.7 billion
($2.45 billion) and will take two seats on the Noos board of directors. However,
definitive documentation has not yet been executed regarding the transaction and
there can be no assurance that agreement will be reached on such documentation.

Noos is the market leading French broadband company, offering digital cable
television, high-speed Internet and telephony services to a total of 803,000
customers as of December 31, 2000 and its network passes 2,563,000 homes and
businesses. As of December 31, 2000 there were an estimated 3,179,000 homes and
businesses in Noos' franchise areas. Noos has an estimated 26% share of the
French cable television market and in 2000 had revenues of FF1,318.4 million
(approximately $189.3 million). Noos currently provides high-speed Internet
access to over 63,000 homes and businesses in France.

Noos operates a fully digital hybrid fiber coaxial, or HFC, 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 will provide us with 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 and will also complement our existing
1G Networks cable franchises in the Greater Paris area.

GERMANY

EKABEL HESSEN GMBH

In August 2000, we completed a 50% investment in eKabel Invest Co, which owns
65% of eKabel L.P., the Hessen cable network in Germany. eKabel 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.
eKabel 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 eKabel's network as of December 31, 2000. Of the 1.8
million homes passed, 72%, or 1.3 million homes, are connected to eKabel's
network. For the year ended December 31, 1999, eKabel Hessen GmbH generated a
total revenue of E110.4 million (approximately $103.6 million) and for the nine
months ended September 30, 2000, it generated total revenue of E87.2 million
(approximately $81.9 million). eKabel has a historical annual churn rate of less
than 6%, which compares favorably to other European and U.S. cable providers,
and this loyalty of its customer base provides a foundation for growth of
broadband products and services.

eKabel plans to spend approximately E930 million ($873.1 million) over the next
5 years to upgrade its network to a state-of-the-art 862 MHz hybrid fiber
coaxial broadband network, with an average of 500 homes per node and fiber
running to an amplifier which services 75 to 100 homes. This upgraded network
will allow eKabel to offer a wider array of broadband products and services,
including the "triple-play" of digital cable television, high-speed Internet and
telephony services. In the process, eKabel also plans to expand its upgraded
network to pass approximately 300,000 additional homes. We believe eKabel's
large customer base, extensive network infrastructure and the attractive
economic and demographic characteristics of Hessen will enable it to be a leader
in the development and provisioning of broadband products and services.

SWEDEN

BREDBANDSBOLAGET ("B2")

As a result of a series of transactions from March 2000 through August 2000, we
have acquired a 25% interest in B2. B2 is a rapidly growing broadband
communications company providing 10 megabits per second network access and
broadband services to residential and small-to-medium business customers. B2 is
currently providing broadband services in Sweden and has stated it intends to
expand its network and service offerings throughout


                                      -25-
<PAGE>   28

Europe. B2 is currently developing an extensive fiber-optic network linking key
metropolitan areas in Sweden and Norway.

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
cooperation with B2's service providers, B2 has stated its intention to
aggregate media content and broadband data, telephony, television and video
services, which B2 intends to offer to its customers through its
specially-designed interactive customer interface. B2's customer interface will
provide each customer with the ability to create a personalized portal
containing only services of his or her choice.


                                   COMPETITION

We face significant competition from established and new competitors in the
areas of residential telephony, business telecommunications services, Internet
and cable television. We believe that competition will intensify in each of
these business areas, particularly business telecommunications and Internet.

CONSUMER SERVICES

We compete primarily with BT in providing telephone services to residential
customers in the United Kingdom. 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 June 2000, BT
serviced 81.6% of U.K. 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 U.K. customers to switch from BT to a competitive 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, BT is under a regulatory
obligation to introduce carrier pre-selection on its network, an interim version
of which was introduced in December 2000, although the carrier pre-selection for
all calls (except for certain special categories) will not be launched until
nearer the end of 2001. Carrier pre-selection 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 are permitted to provide and
convey cable television services throughout the United Kingdom 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. In addition, BSkyB has a joint venture
with BT that is known as Open (formerly British Interactive Broadcasting). BSkyB
increased its holding in Open to 80.1% in July 2000 as a result of buying out
HSBC and Matsushita. The joint venture could provide additional competition.

Our cable television systems compete with direct reception over-the-air
broadcast television, DTH satellite services and satellite master antenna
systems. In addition, pay television and pay-per-view services offered by


                                      -26-
<PAGE>   29

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.

In 1999, BSkyB and OnDigital dropped the practice of charging any upfront fee
for digital set-top boxes, although they still charge in some instances for
installation. Coupled with BSkyB's move to bundle free Internet access and
discounted indirect access telephony (with calls priced at a significant
discount to BT headline rates), these moves have reduced the competitive
advantages previously represented by our offerings. We believe that the
underlying technological advantages of our networks will allow us to respond to
such moves by our competitors. Nevertheless, there can be no assurances that we
will be able to continue to compete successfully in all segments of the
residential markets.

BUSINESS TELECOMMUNICATIONS

BT is also our principal competitor in providing business telecommunications
services. In addition, we compete with Cable & Wireless plc, Energis
Communications Limited, Thus in Scotland and with other companies that have been
granted telecommunications licenses such as MCI-WorldCom and COLT. 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 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 U.K. Ltd ("Crown"), a subsidiary of Crown Castle International
Corp., is NTL's primary competition in the terrestrial broadcast transmission
market in the United Kingdom. Crown provides analog transmission services to the
BBC. It also has been awarded the transmission contract for the new DTT
multiplex service for the BBC and OnDigital. 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 others' 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
United Kingdom. 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 U.K. mobile operators own site infrastructure and lease space to other
users. Their openness to sharing with direct competitors varies by operator.
Cellnet and Vodafone have agreed to cut site costs by jointly developing and
acquiring sites in the Scottish Highlands. BT and Cable & Wireless plc 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 Cellnet.

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.

We face competition from a large number of companies in the provision of network
services. The companies include CTL, specialty consultants and equipment
manufacturers such as Nortel and Ericsson.


                                   REGULATION

Telecommunications service industries in the United Kingdom are governed by
legislation under the Telecommunications Act 1984, the Broadcasting Act 1990,
and the Broadcasting Act 1996. The operator of a


                                      -27-
<PAGE>   30

full-service telecommunications system in the United Kingdom 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 to 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 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.

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. Further exchanges are likely to be made available to service
providers for unbundling in 2001. OFTEL published the wholesale prices for BT's
unbundled local loops on December 29, 2000 and prices for shared access will be
published in 2001. From December 31, 2000, BT is required to publish a reference
offer setting out the basis on which they will offer shared access to the local
loop. In addition, BT is currently rolling out ADSL over its own network. ADSL
will allow consumers access to high speed information services. The introduction
of local loop unbundling will give rise to opportunities for us, but could also
give rise to increased competition.

INTERCONNECTION

NTL Group Ltd. has Annex II status giving it rights of interconnection at
wholesale rates to other operators with similar status.


                                      -28-
<PAGE>   31

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 CARRIAGE AGREEMENT

NTL's carriage agreement with BSkyB is subject to regulatory approval by both
the ITC and the U.K. Office of Fair Trading, or OFT. The agreement was therefore
notified to the OFT in Autumn 2000. In December 2000, the OFT separately
announced that it was commencing a six-month investigation under the U.K.
Competition Act into BSkyB's activities, in particular the wholesale prices
offered to rival distributors of pay television services. The launch of this
investigation in December 2000 has meant that the OFT's timetable for reviewing
NTL's carriage agreement with BskyB has been extended.

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 U.K. 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.

BROADCAST SERVICES

A portion of our total revenue is attributable to the provision of television
and radio transmission and distribution services. In the United Kingdom, 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."


                                      -29-
<PAGE>   32

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.

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 (U.K. 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 July 2000, the European Commission adopted a package of
legislative proposals which sets 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 OFTEL, the Radiocommunications Agency
and ITC and it is intended that it will provide a more flexible framework for
regulating a converging industry.

                            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.


                                      -30-
<PAGE>   33

                        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.
There are no material intellectual property licenses used by us, the loss of
which would have such an effect.

                                    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, ABC
and SBS, the loss of one or more of which may have a material adverse effect on
the broadcast services business.

                                    EMPLOYEES

At December 31, 2000, we had approximately 23,880 employees, with 21,200,
including subcontractors, in the United Kingdom, 640 in Ireland, 1,660 in
Switzerland, 100 in Australia and Asia, 250 in France and 30 in the United
States. Approximately 3,340 employees are covered by union recognition
agreements with the Broadcasting, Entertainment, Cinematographic and Theatre
Union in the United Kingdom and Ireland. None of our employees is otherwise
represented by any labor organization. We believe that our relationship with our
employees is good.

ITEM 2.  PROPERTIES.

We own, lease or occupy under license 91 business unit and regional head-offices
throughout the United Kingdom, Ireland, Switzerland, France and Australia, our
corporate head-office in Hook, and 58 retail shops. In addition, we own or lease
approximately 630 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 used in the United
Kingdom, Ireland, Switzerland and France.

We own, lease or occupy under license approximately 3,436 properties in the
United Kingdom and Australia, of which approximately 1,250 are used as
transmitter sites. In addition, we also are the lessee or licensee of over 679
transmitter sites which are owned by Castle Transmission and shared between the
two organizations pursuant to a site sharing agreement.

We maintain offices under lease for our corporate staff in New York City.

We believe that our facilities are presently adequate for their current use. We
intend to continue to expand the systems in accordance with the requirements of
the network build schedules and acquire new sites as part of the ongoing
expansion of our transmission networks.

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, 2000.


                                      -31-
<PAGE>   34

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

On October 27, 2000, the Company's Common Stock began trading on the New York
Stock Exchange under the symbol "NLI". Concurrently with the New York Stock
Exchange listing, the Company withdrew its listing on the Nasdaq Stock Market's
National Market where its Common Stock had been trading under the symbol "NTLI".
The Company's Common Stock continues to trade on EASDAQ under the symbol
"NTLI.ED". 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 New York Stock Exchange thereafter. The
information set forth below gives retroactive effect to the 5-for-4 stock split
in February 2000 and the 5-for-4 stock split in October 1999.


<TABLE>
<CAPTION>
                                               LAST SALE PRICE
                                               ---------------
                                               HIGH       LOW
                                               ----       ---
<S>                                            <C>        <C>

                      1999
                      First Quarter            $53.20     $34.41
                      Second Quarter            64.08      47.05
                      Third Quarter             67.31      52.56
                      Fourth Quarter           101.20      51.75

                      2000
                      First Quarter            109.69      78.88
                      Second Quarter            94.94      50.69
                      Third Quarter             61.38      37.31
                      Fourth Quarter            50.38      20.00

                      2001
                      First Quarter
                      (through
                      March 16, 2001)           40.13      22.25
</TABLE>


On March 16, 2001, the closing sale price for the Company's Common Stock, as
reported on the New York Stock Exchange was $29.02. As of March 16, 2001, there
were 5,561 record holders of the Common Stock. This figure does not reflect
beneficial ownership of shares held in nominee name.

The Company has never paid cash dividends on its Common Stock. Pursuant to the
Certificates of Designation governing the Company's Preferred Stock, certain
provisions currently materially limit the Company's ability to pay dividends on
its equity securities. In addition, there are legal and contractual restrictions
on the ability of the Company's subsidiaries to transfer funds to the Company in
the form of cash dividends, loans or advances, including those contained in the
indentures governing NTL Communications Corp.'s Senior Notes. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources". The Company does not currently intend to pay
cash dividends in the foreseeable future on shares of its capital stock. The
Company anticipates that for the foreseeable future any cash flow generated from
subsidiaries' operations will be used to develop and expand the Company's
business and for debt service. Any future determination as to the payment of
dividends will be at the discretion of the Company's Board of Directors and will
depend upon the Company's operating results, financial condition and capital
requirements, indenture and other contractual restrictions, general business
conditions and such other factors as the Company's Board of Directors deems
relevant. There can be no assurance that the Company will pay dividends at any
time in the future.


                                      -32-
<PAGE>   35

ITEM 6.  SELECTED FINANCIAL DATA.

The following table sets forth certain financial data for the years ended
December 31, 2000, 1999, 1998, 1997 and 1996. This information should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this Form 10-K.

                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                   2000          1999          1998          1997         1996
                                                   ----          ----          ----          ----         ----
                                                   (1)           (2)           (3)                         (4)
<S>                                              <C>            <C>           <C>           <C>           <C>
     Income statement data:
     Operating revenues                          $2,840.8       $1,584.1      $747.0        $491.8        $228.3
     (Loss) before extraordinary item            (2,963.7)        (732.7)     (503.9)       (328.6)       (254.5)
     Net (loss)                                  (2,963.7)        (735.7)     (534.6)       (333.1)       (254.5)
     Basic and diluted net (loss) per
      common share:
     (Loss) per common share before
     extraordinary item (5)                       (14.54)        (6.75)        (8.12)        (6.79)       (5.25)
     Net (loss) per common share (5)              (14.54)        (6.78)        (8.60)        (6.88)       (5.25)
     Weighted average number of common
       shares used in the computation of
       basic and diluted net loss per common       217.1         119.4          64.4          50.2         48.5
     share (5)
</TABLE>

<TABLE>
<CAPTION>
                                                                       AS OF DECEMBER 31,
                                                   2000          1999          1998          1997         1996
                                                   ----          ----          ----          ----         ----
                                                   (1)           (2)           (3)                         (4)
<S>                                             <C>           <C>            <C>           <C>           <C>
     Working capital (deficiency)                 $(840.0)     $2,261.4       $600.5        $(52.3)       $242.1
     Fixed assets, net                           12,693.0       5,597.7      3,854.4       1,757.0       1,459.5
     Total assets                                28,383.7      12,211.6      6,194.1       2,421.6       2,454.6
     Long-term debt                              15,044.1       8,798.0      5,043.8       2,015.1       1,732.2
     Redeemable preferred stock                   2,083.2          141.8        124.1         108.5            --
     Shareholders' equity (deficiency)            8,367.4       2,136.9         355.2         (61.7)       328.1
</TABLE>

(1)  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.

(2)  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
     million. 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.

(3)  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 U.K. 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 U.K. and EGT are
     included in the consolidated financial statements from their respective
     dates of acquisition.

(4)  In May 1996, the Company purchased NTL Group Limited for an aggregate
     purchase price of $439 million, including goodwill of approximately $263
     million. The net assets and results of operations of NTL Group Limited are
     included in the consolidated financial statements from the date of the
     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.


                                      -33-
<PAGE>   36

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.

RESULTS OF OPERATIONS

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 the Cablecom Group
("Cablecom") in March 2000 and the consumer cable telephone, Internet and
television operations of Cable & Wireless Communications plc ("CWC") (the
operations acquired from CWC are called "ConsumerCo") in May 2000, the Company
consolidated the results of operations of these businesses from the dates of
acquisition.

A significant component of the results since May 2000 is associated with the
acquisition of ConsumerCo. Prior to the acquisition, the ConsumerCo business had
been losing customers on a quarterly basis. Since the acquisition, ConsumerCo
has experienced a dramatic turnaround in customer additions, as well as
materially reduced monthly churn. As the quality of the ConsumerCo customers'
experience continues to improve, the Company expects to continue to reduce churn
and increase penetration. However, this will cause certain costs to increase
through the second quarter of 2001.

For the year ended December 31, 1999, certain revenues have been reclassified
from business telecommunications to broadcast transmission and other and certain
costs have been reclassified from operating expenses to selling, general and
administrative expenses to conform to the 2000 classifications.

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. The Company's immediate goal is to drive the majority of revenue
growth from ARPU increases rather than adding new customers; this allows the
Company to maintain revenue targets, has a lower capital requirement due to
fewer installations, and drives higher EBITDA as the Company reduces
front-loaded costs such as customer acquisition costs and higher initial
maintenance costs.

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. The Company continues to focus
specific sales and marketing effort on winning business customers in its
franchise areas and promoting broadband for small businesses. Carrier services
revenues increased due to growth in services provided by the Company's wholesale
operation to other telephone companies. Revenue growth in carrier services is
primarily dependent upon the Company's ability to continue to attract new
customers and expand services to existing customers.

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 U.K.
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. 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 privatization of national broadcast networks, the
digitalization of analog television and radio signals and the further
development of programming for the European markets requiring satellite and
terrestrial distribution services.

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.


                                      -34-
<PAGE>   37

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 U.K. 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.

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. This change did not affect the
exercise price of options granted to the Chairman of the Board, the President
and Chief Executive Officer and the Company's Directors. In accordance with APB
Opinion No. 25, "Accounting for Stock Issued to Employees" and related
interpretations, 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.

Other charges of $92.7 million in 2000 include restructuring costs of $65.9
million and information technology integration costs of $26.8 million.
Restructuring costs relate to the Company's announcement in November 2000 of its
completion of a consolidation review. Based on a comprehensive review of the
combined company following the acquisition of ConsumerCo and the integration of
several other acquired businesses, the Company identified significant efficiency
improvements and cost savings. The restructuring provision includes employee
severance and related costs of $47.9 million for approximately 2,300 employees
to be terminated and lease exit costs of $18.0 million. As of December 31, 2000,
approximately 360 of the employees had been terminated. None of the provision
had been utilized through December 31, 2000. The information technology
integration costs of $26.8 million were incurred for the integration of acquired
companies' information technology. 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 income and other, net decreased to $1.6 million from $49.4 million as a
result of increases in the net losses of affiliates accounted for by the equity
method and decreases in interest income.

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
$590.1 million and $222.1 million was paid in the years ended December 31, 2000
and 1999, respectively.

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. NTL Incorporated and
certain of its subsidiaries have cash, cash equivalents and debt denominated in
foreign currencies that are affected by changes in exchange rates. In addition,
foreign subsidiaries of the Company whose functional currency is not the U.S.
dollar hold cash, cash equivalents and debt denominated in U.S. dollars which
are affected by changes in exchange rates.

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

YEARS ENDED DECEMBER 31, 1999 AND 1998


                                      -35-
<PAGE>   38

As a result of the completion of the acquisitions of ComTel in June and
September 1998, NTL (Triangle) LLC (formerly Comcast U.K. Cable Partners
Limited) ("NTL Triangle") in October 1998, EGT in December 1998, Diamond in
March 1999, NTL Australia in April 1999, Cablelink in July 1999, the "1G
Networks" of France Telecom in August and December 1999 and NTL Business in
September 1999, the Company consolidated the results of operations of these
businesses from the dates of acquisition. The results of these businesses are
not included in the 1998 results except for the results of operations of ComTel,
NTL Triangle and EGT from the dates of acquisition.

For the years ended December 31, 1999 and 1998, certain revenues have been
reclassified from business telecommunications to broadcast transmission and
other and certain costs have been reclassified between selling, general and
administrative expenses and operating expenses to conform to 2000
classifications.

Consumer telecommunications and television revenues increased to $834.3 million
from $355.6 million as a result of acquisitions and from customer growth that
increased the Company's current revenue stream. The 1999 and 1998 revenue
includes $471.9 million and $74.2 million, respectively, from acquired
companies.

Business telecommunications revenues increased to $452.5 million from $157.7
million as a result of acquisitions, customer growth and increases in carrier
service revenues. The 1999 and 1998 revenue includes $200.8 million and $8.5
million, respectively from acquired companies. Carrier services revenues
increased due to growth in telephone services provided by the Company's
wholesale operation to other telephone companies. Revenue growth in carrier
services is primarily dependent upon the Company's ability to continue to
attract new customers and expand services to existing customers.

Broadcast transmission and other revenues increased to $297.3 million from
$231.3 million due to revenues of $40.0 million from NTL Australia in 1999, from
increases in broadcast television and FM radio customers and accounts, which
exceeded price cap reductions in the Company's regulated services and from
increases in satellite and media services used by broadcast and media customers.

Other telecommunications revenues decreased to zero from $2.4 million due to the
sales of the assets of the Company's wholly-owned subsidiary, OCOM Corporation,
to AirTouch Communications, Inc. and to Cellular Communications of Puerto Rico,
Inc. during 1998.

Operating expenses increased to $798.6 million from $400.9 million as a result
of increases in interconnection costs and programming costs due to customer
growth. The 1999 and 1998 expense includes $360.0 million and $51.1 million,
respectively, from acquired companies.

Selling, general and administrative expenses increased to $574.6 million from
$270.7 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. In addition, $47.4 million of
the increase was due to the new national brand and advertising campaign, which
began in the second quarter of 1999 and continued into 2000. The 1999 and 1998
expense includes $222.1 million and $25.1 million, respectively, from acquired
companies.

Pursuant to the terms of various U.K. licenses, the Company incurred license
fees paid to the 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 by
the end of 1999, and the Company's liability for license payments ceased upon
the conversion. Franchise fees decreased to $16.5 million from $25.0 million due
to the reversal of the accrued liability for franchise fees of $13.6 million.
The 1999 amount includes Diamond franchise fees of $5.0 million.

Other charges of $16.2 million in 1999 were incurred for the cancellation of
certain contracts. Other charges of $4.2 reversed in 1998 were the result of
changes to a restructuring reserve that was recorded in 1997.

Corporate expenses increased to $29.4 million from $17.1 million due to an
increase in various overhead costs.


                                      -36-
<PAGE>   39

Depreciation and amortization expense increased to $791.3 million from $266.1
million due to an increase in depreciation of telecommunications and cable
television equipment. The 1999 and 1998 expense includes $430.1 million and
$45.9 million, respectively, from acquired companies, including amortization of
acquisition related intangibles.

Interest expense increased to $680.7 million from $328.8 million due to the
issuance of additional debt, and the increase in the accretion of original issue
discount on the deferred coupon notes. The 1999 expense includes $184.8 million
from acquired companies. Interest of $222.1 million and $118.3 million was paid
in the years ended December 31, 1999 and 1998, respectively.

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

Foreign currency transaction gains increased to $12.7 million from $4.2 million
primarily due to the effect of favorable changes in the exchange rates on the
Company's pound sterling and Euro denominated notes in 1999.

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. The Company recorded an
extraordinary loss from the early extinguishment of debt of $30.7 million in
1998 as a result of the redemption of the 10-7/8% Notes and the repayment of a
bank loan.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 provides guidance on the recognition, presentation and
disclosure of revenue in financial statements. SAB 101 was required to be
adopted retroactive to January 1, 2000. The adoption of SAB 101 had no
significant effect on revenues or results of operations.

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 will be
recognized in the results of operations.

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.

LIQUIDITY AND CAPITAL RESOURCES

The Company will continue to require significant amounts of capital to finance
construction of its local and national networks, for connection of telephone,
telecommunications, Internet and cable television customers to the networks, for
other capital expenditures and for debt service. The Company estimates that
these requirements, net of cash from operations, will aggregate up to
approximately $2,400.0 million in 2001. The Company's commitments at December
31, 2000 for equipment and services through 2001 of approximately $390.0 million
are included in the anticipated requirements. The Company had approximately
$639.4 million in cash and securities on hand at December 31, 2000. The Company
expects to utilize the proceeds from the issuance of notes in January and
February 2001 and a portion of its bank facilities to fund the balance of these
requirements.

In January 2001, NTL Communications Corp. ("NTL Communications") issued
euro 200.0 million ($187.8 million) principal amount of 12-3/8% Senior Notes
due 2008. In February 2001, NTL Communications issued an additional euro 100.0
million principal amount of 12-3/8% Senior Notes due 2008 at a price of 101.0%
of the aggregate principal amount at maturity, plus accrued interest, or
euro 101.5 million ($95.3 million) (together, the "2001 Euro Notes"). The
underwriter's discount and commissions were euro 6.8 million ($6.4 million).
Interest is payable semiannually in cash at the rate of 12-3/8% per annum
beginning on August 1, 2001. The 2001 Euro Notes may not be redeemed by the
Company except in limited circumstances.

NTL Business and NTL Communications Limited ("NTLCL"), wholly-owned indirect
subsidiaries of the Company, have the option to draw on the unused portion of
the (pound sterling) 2,500.0 million ($3,738.8 million) commitment amounting to
(pound sterling) 222.8 million ($333.2 million) at December 31, 2000. The unused
portion of the commitment is available for refinancing ConsumerCo indebtedness
and for working capital requirements of the U.K. Group, as defined. For purposes
of this credit agreement, Diamond Cable Communications Limited and subsidiaries,
NTL Triangle and subsidiaries and certain other entities are excluded from the
U.K. Group.

NTLCL entered into a (pound sterling) 1,300.0 million ($1,944.2 million) credit
agreement with a group of banks dated May 30, 2000. Pursuant to the credit
agreement, in connection with the issuance in October 2000 of $500.0 million
aggregate principal amount of NTL Communications 11-7/8% notes, and the issuance
in January and February 2001 of euro 300.0 million aggregate principal amount of
NTL Communications 2001 Euro Notes, the commitment was reduced by
(pound sterling) 255.1 million ($381.4 million). As of December 31, 2000, there
were no amounts borrowed under this agreement. NTLCL and other members of the
U.K. Group (as defined above) may utilize the proceeds under this credit
agreement to finance the working capital requirements of the U.K. Group,
provided that in no event shall the proceeds be used for a purpose other than to
finance the construction, capital expenditure and working capital needs of a
cable television or telephone or telecommunications business, or a related
business, in the United Kingdom or Ireland. Interest is payable at least every
six months at LIBOR plus a margin rate of 4.5% per annum. The margin rate shall
increase by 0.5% on the three month anniversary of the initial advance and by an
additional 0.5% on each subsequent three month anniversary, up to a maximum
total interest rate of 16% 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.


                                      -37-
<PAGE>   40
Cablecom has the option to draw on a revolving loan facility of up to CHF
1,400.0 million ($864.1 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, 2000, Cablecom had borrowed CHF 520.0 million ($320.9 million)
under the revolving loan facility with an effective interest rate of 6.02%. The
revolving facility is available until May 2003. The interest rate, interest
payment requirements and principal payments for the revolving facility are the
same as for the term loan facility (see below). 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.

Regarding the Company's estimated cash requirements described above, there can
be no assurance that: (a) actual construction costs will not exceed the amounts
estimated or that additional funding substantially in excess of the amounts
estimated will not be required, (b) conditions precedent to advances under
credit facilities will be satisfied when funds are required, (c) the Company and
its subsidiaries will be able to generate sufficient cash from operations to
meet capital requirements, debt service and other obligations when required, (d)
the Company will be able to access such cash flow or (e) the Company will not
incur losses from its exposure to exchange rate fluctuations or be adversely
affected by interest rate fluctuations.

A wholly-owned indirect subsidiary of the Company, Premium TV Limited, has
entered into media partnerships with U.K. football clubs whereby Premium TV
Limited will receive certain marketing and sponsorship rights. Premium TV
Limited will provide loan facilities to the clubs, repayable through the issue
of shares in the football clubs, as well as provide funding to joint ventures
with the clubs. At December 31, 2000, the aggregate commitment was (pound
sterling) 56.8 million ($84.9 million). In addition, Premium TV Limited expects
to pay fees of up to (pound sterling) 59.0 million ($88.2 million) over five
years for the right to enter into a joint venture with the Football League to
set-up an Internet portal for all 72 Football League clubs who wish to
participate.

In August 2000, the Company announced that it had signed an agreement in
partnership with Morgan Stanley Dean Witter Private Equity to buy France
Telecom's 49.9% stake in Noos, the leading broadband company in France offering
cable television, telephony and Internet services. Pursuant to the agreement,
the Company will acquire 27% of Noos for approximately $627.0 million. However,
definitive documentation has not yet been executed regarding the transaction and
there can be no assurance that agreement will be reached on such documentation.

The accreted value at December 31, 2000 of the Company's consolidated long-term
indebtedness, including the redeemable preferred stock, is $17,127.3 million,
representing approximately 67.2% of total capitalization. The following
summarizes the terms of the significant notes, credit facilities and redeemable
preferred stock issued by the Company and its subsidiaries (including the 2001
Euro Notes issued by NTL Communications in January and February 2001).

NTL Incorporated:

(1)  Senior Redeemable Exchangeable Preferred Stock due February 15, 2009,
     stated value of $100.0 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)  Cumulative Preferred Stock, stated value $1,850.0 million, dividends accrue
     at 5% per annum and are cumulative on a quarterly basis and are payable in
     additional shares of Cumulative Preferred Stock in March 2002, holders
     other than any commercial banks or their affiliates (a "Qualified Holder")
     may at any time after September 2000 elect, subject to certain conditions,
     for the Cumulative Preferred Stock to be exchanged for up to a 50% interest
     in a new company which will own certain or all of the Company's broadband
     communications, broadcast and cable television interests in Continental
     Europe outside of France, redeemable for cash in March 2002 at the option
     of a Qualified Holder;


                                      -38-
<PAGE>   41

NTL Delaware:

(3)  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 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;

NTL Business and NTLCL:

(4)  Credit Agreement of (pound sterling) 1,300.0 million ($1,944.2 million) of
     NTLCL, no amounts were outstanding as of December 31, 2000, interest
     payable at least every six months at LIBOR plus a margin rate of 4.5% per
     annum, which is subject to adjustment, 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, pursuant to the credit agreement, following the
     issuance in October 2000 of $500.0 million aggregate principal amount of
     NTL Communication's 11-7/8% senior notes and the issuance in January and
     February 2001 of euro 300.0 million aggregate principal amount of NTL
     Communications 12-3/8% senior notes, the commitment was reduced by
     (pound sterling) 255.1 million ($381.4 million);

(5)  Credit Agreement of (pound sterling) 2,500.0 million ($3,738.3 million), of
     which (pound sterling) 2,277.2 million ($3,405.6 million) was outstanding
     at December 31, 2000, interest payable at least every six months at LIBOR
     plus a margin rate of 2.25% per annum, which is subject to adjustment,
     effective interest rate of 8.283% at December 31, 2000, 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;

Cablecom:

(6)  Term Loan Facility of CHF 2,700.0 million ($1,666.4 million), interest
     payable at least every six months at Swiss LIBOR plus a margin rate of 2.5%
     per annum, which is subject to adjustment after March 2001, effective
     interest rate of 6.03% at December 31, 2000, principal is due over six
     years in quarterly installments beginning on March 31, 2004;

(7)  Revolving Facility of CHF 1,400.00 million ($864.1 million), of which CHF
     520.0 million ($320.9 million) was outstanding at December 31, 2000,
     interest payable at least every six months at Swiss LIBOR plus a margin
     rate of 2.5% per annum, which is subject to adjustment after March 2001,
     effective interest rate of 6.02% at December 31, 2000, 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 over six years in quarterly installments
     beginning on March 31, 2004;

NTL Communications:

(8)  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;

(9)  11-1/2% Senior Deferred Coupon Notes due February 1, 2006, principal amount
     at maturity of $1,050.0 million, interest payable semiannually beginning on
     August 1, 2001, redeemable at the Company's option on or after February 1,
     2001;

(10) 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;

(11) 9-1/2% Senior Sterling Notes due April 1, 2008, principal amount at
     maturity of (pound sterling) 125.0 million ($186.9 million), interest
     payable semiannually from October 1, 1998, redeemable at the Company's
     option on or after April 1, 2003;

(12) 10-3/4% Senior Deferred Coupon Sterling Notes due April 1, 2008, principal
     amount at maturity of (pound sterling) 300.0 million ($448.7 million),
     interest payable semiannually beginning on October 1, 2003, redeemable at
     the Company's option on or after April 1, 2003;

(13) 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


                                      -39-
<PAGE>   42

     Company's option on or after April 1, 2003;

(14) 9-3/4% Senior Deferred Coupon Sterling Notes due April 15, 2009, principal
     amount at maturity of (pound Sterling) 330.0 million ($493.5 million),
     interest payable semiannually beginning on October 15, 2004, redeemable at
     the Company's option on or after April 15, 2004;

(15) 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;

(16) 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;

(17) 7% Convertible Subordinated Notes due December 15, 2008, principal amount
     at maturity of $599.3 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;

(18) 9-1/4% Senior Euro Notes due November 15, 2006, principal amount at
     maturity of euro 250.0 million ($234.7 million), interest payable
     semiannually from May 15, 2000;

(19) 9-7/8% Senior Euro Notes due November 15, 2009, principal amount at
     maturity of euro 350.0 million ($328.6 million), interest payable
     semiannually from May 15, 2000, redeemable at the Company's option on or
     after November 15, 2004;

(20) 11-1/2% Senior Deferred Coupon Euro Notes due November 15, 2009, principal
     amount at maturity of euro 210.0 million ($197.1 million), interest payable
     semiannually beginning on May 15, 2005, redeemable at the Company's option
     on or after November 15, 2004;

(21) 11-7/8% Senior Notes due October 1, 2010, principal amount at maturity of
     $500.0 million, interest payable semiannually beginning on April 1, 2001,
     redeemable at the Company's option on or after October 1, 2005;

(22) 12-3/8% Senior Euro Notes due February 1, 2008, principal amount at
     maturity euro 300.0 million, interest payable semiannually beginning on
     August 1, 2001;

NTL Triangle:

(23) 11.2% Senior Euro Discount Debentures due November 15, 2007, principal
     amount at maturity of $517.3 million, interest payable semiannually
     beginning on May 15, 2001, redeemable at NTL Triangle's option after
     November 15, 2000;

Diamond:

(24) 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;

(25) 11-3/4% Senior Discount Notes due December 15, 2005, principal amount at
     maturity of $531.0 million, interest payable semiannually beginning on June
     15, 2001, redeemable at Diamond's option on or after December 15, 2000;

(26) 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;

(27) 10% Senior Sterling Notes due February 1, 2008, issued by Diamond Holdings
     plc, a wholly-owned subsidiary of Diamond, principal amount at maturity of
     (pound sterling) 135.0 million ($201.9 million), interest payable
     semiannually from August 1, 1998, redeemable at Diamond's option on or
     after February 1, 2003; and

(28) 9-1/8% Senior Notes due February 1, 2008, issued by Diamond Holdings plc,
     principal amount at maturity


                                      -40-
<PAGE>   43

     of $110.0 million, interest payable semiannually from August 1, 1998,
     redeemable at Diamond's option on or after February 1, 2003.

Management does not anticipate that the Company and its subsidiaries will
generate sufficient cash flow from operations to repay at maturity the entire
principal amount of the outstanding indebtedness of the Company and its
subsidiaries. Accordingly, the Company may be required to consider a number of
measures, including: (a) refinancing all or a portion of such indebtedness, (b)
seeking modifications to the terms of such indebtedness, (c) seeking additional
debt financing, which may be subject to obtaining necessary lender consents, (d)
seeking additional equity financing, or (e) a combination of the foregoing.

The Company's operations are conducted through its direct and indirect
wholly-owned subsidiaries. As a holding company, the Company holds no
significant assets other than cash, securities and its investments in and
advances to its subsidiaries. The Company's ability to pay cash dividends to its
stockholders may be dependent upon the receipt of sufficient funds from its
subsidiaries. In addition, NTL Delaware and NTL Communications are also holding
companies that conduct their operations through their respective subsidiaries.
Accordingly, the ability of NTL Delaware or NTL Communications to make scheduled
interest and principal payments when due to holders of their indebtedness may be
dependent upon the receipt of sufficient funds from their subsidiaries.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash (used in) provided by operating activities was $(301.9) million and $53.6
million in the years ended December 31, 2000 and 1999, respectively. Cash paid
during the year for interest exclusive of amounts capitalized was $495.0 million
and $180.3 million in 2000 and 1999, respectively. The remainder of this change
is primarily due to the increase in the net loss and changes in working capital
as a result of the timing of receipts and disbursements.

Purchases of fixed assets were $2,257.0 million in 2000 and $1,211.3 million in
1999 as a result of the continuing fixed asset purchases and construction,
including purchases and construction by acquired companies.

Acquisitions, net of cash acquired of $10,940.0 million, proceeds from
borrowings, net of financing costs of $6,870.1 million, proceeds from issuance
of preferred stock of $1,862.0 million, proceeds from issuance of redeemable
preferred stock of $1,850.0 million and proceeds from issuance of common stock
of $2,327.6 million in 2000 were primarily for the acquisitions of Cablecom and
ConsumerCo including the term loan facility and the credit agreement entered
into with groups of banks, the common and preferred shares issued to France
Telecom and the preferred stock issued to France Telecom and certain commercial
banks. Included in proceeds from borrowings, net of financing costs, is $1,353.0
million of borrowings under credit facilities that was not related to
acquisitions. Included in principal payments are $1,197.5 million of repayments
of amounts borrowed under credit agreements.

The cash used for other assets of $510.8 million in 2000 was primarily for
investments in and loans to unconsolidated entities.

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 interest rates related to
certain of its floating interest rate debt. The counterparties are major
financial institutions.

FOREIGN EXCHANGE CONTRACTS

To the extent that the Company obtains financing in U.S. dollars and incurs
construction and operating costs in various other currencies, it will encounter
currency exchange rate risks. At December 31, 2000, the Company had
approximately $341.2 million in cash and cash equivalents denominated in foreign
currencies to reduce this risk. In addition, the Company's pound sterling and
Euro denominated Notes also reduce this risk. Furthermore, the Company's
revenues are generated in foreign currencies while its interest and principal
obligations with respect to most of the Company's existing indebtedness are
payable in U.S. dollars.


                                      -41-
<PAGE>   44
 In October 2000, the Company entered into cross currency swaps to hedge
exposure to movements in the British pound to U.S. dollar exchange rate. The
notional amount of the cross currency swaps was (pound sterling) 135.0 million
at December 31, 2000.

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.

In September 2000, the Company 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, 2000.


                                      -42-
<PAGE>   45

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.

<TABLE>
<CAPTION>
                                    Year Ending    Year Ending   Year Ending   Year Ending    Year Ending
                                     12/31/01       12/31/02      12/31/03      12/31/04       12/31/05      Thereafter
                                     --------       --------      --------      --------       --------      ----------
                                                                    (in millions)
<S>                                <C>           <C>            <C>           <C>            <C>             <C>
Long-term Debt Including Current
  Portion:

U.S. dollars
  Fixed Rate                                -              -              -         $285.1         $808.8        $7,172.1
  Average Interest Rate                                                              13.25%         12.09%           9.74%

U.K. pound
  Fixed Rate                                -              -              -              -              -         pound
                                                                                                                 sterling
                                                                                                                     890.0
  Average Interest Rate                                                                                               10.09%
  Average Forward Exchange Rate                                                                                      1.5097

Euro
  Fixed Rate                                -              -              -                -              -          euro
                                                                                                                     810.0
  Average Interest Rate                                                                                               10.10%
  Average Forward Exchange Rate                                                                                       .9717

U.K. pound
  Floating Rate                        pound         pound          pound           pound          pound
                                   sterling 4.8  sterling L4.8  sterling 4.8  sterling 90.0  sterling 2,187.2          -
  Average Interest Rate               LIBOR          LIBOR          LIBOR         LIBOR          LIBOR
                                    plus 2.04%     plus 2.04%     plus 2.04%    plus 2.25%     plus 2.25%

  Average Forward Exchange Rate        1.4988         1.4995         1.5001           1.5009       1.5014

CHF
  Floating Rate                             -              -              -         CHF128.8     CHF225.4      CHF2,865.8

  Average Interest Rate                                                          Swiss LIBOR    Swiss LIBOR     Swiss LIBOR
                                                                                    plus 2.5%      plus 2.5%       plus 2.5%
  Average Forward Exchange Rate                                                        .6509          .6588           .6961

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             -                -
  Average Floor Strike Rate                      3.27%          3.27%          3.27%            3.27%
  Average Cap Strike Rate                        5.15%          5.15%          5.15%            5.15%

Currency Swap Agreements Related
  to Long-term Debt:

Receipt of U.S. Dollars
  Notional U.K. Pound Amount       pound sterling 135.0              -              -                -             -              -
  Average Contract Rate                          1.4765
</TABLE>

<TABLE>
<CAPTION>
                                                                                 Fair Value
                                                     Total                        12/31/00
                                                     -----                       --------
<S>                                                 <C>                          <C>
Long-term Debt Including Current Portion:

U.S. dollars
  Fixed Rate                                                     $8,266.0                     $6,087.1
  Average Interest Rate

U.K. pound
  Fixed Rate                                       pound sterling   890.0        pound sterling  516.7
  Average Interest Rate
  Average Forward Exchange Rate

Euro
  Fixed Rate                                                 euro   810.0                  euro  614.4
  Average Interest Rate
  Average Forward Exchange Rate

U.K. pound
  Floating Rate                                    pound sterling 2,291.6        pound sterling 2,291.6
  Average Interest Rate

  Average Forward Exchange Rate

CHF
  Floating Rate                                                CHF3,220.0                    CHF3,220.0

  Average Interest Rate

  Average Forward Exchange Rate

Interest Rate Derivative Financial  Instruments Related to Long-term Debt:

Interest Rate Swaps
  Notional CHF Amount                                          CHF1,200.0                      CHF(11.0)
  Average Floor Strike Rate
  Average Cap Strike Rate

Currency Swap Agreements Related to Long-term Debt:

Receipt of U.S. Dollars
  Notional U.K. Pound Amount                       pound sterling   135.0         pound sterling   (1.5)
  Average Contract Rate
</TABLE>


                                      -43-
<PAGE>   46

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, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                 (IN MILLIONS, EXCEPT PER SHARE DATA)
                                                                                   2000
                                             ---------------------------------------------------------------------
                                                                            THREE MONTHS ENDED
                                              MARCH 31         JUNE 30           SEPTEMBER 30          DECEMBER 31
                                              --------         -------           ------------          -----------
<S>                                           <C>              <C>               <C>                   <C>
              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)
</TABLE>

<TABLE>
<CAPTION>
                                                                         1999
                                             --------------------------------------------------------------------
                                                                    THREE MONTHS ENDED
                                             --------------------------------------------------------------------
                                             MARCH 31          JUNE 30          SEPTEMBER 30          DECEMBER 31
                                             --------          -------          ------------          -----------
                                                                                                          (1)
<S>                                          <C>               <C>              <C>                   <C>
              Revenues                        $313.4           $360.2              $417.1               $493.4
              Operating (loss)                (121.2)          (168.9)             (151.6)              (200.8)
              (Loss) income before
                 extraordinary item           (230.4)          (348.5)             (278.1)               124.3
              Net (loss) income               (230.4)          (348.5)             (278.1)               121.3
              Basic net (loss) income per
                 common share before
                 extraordinary item            (2.44)           (3.13)              (2.31)                 .75
              Basic net (loss) income per
                 common share                  (2.44)           (3.13)              (2.31)                 .73
              Diluted net (loss) income
              per common share before          (2.44)           (3.13)              (2.31)                 .62
                 extraordinary item
              Diluted net (loss) income
              per common share                 (2.44)           (3.13)              (2.31)                 .60
</TABLE>

(1)  In November 1999, the Company sold its investment in Cable London for cash
     of approximately $692.5 million and recognized a gain of $493.1 million.


                                      -44-
<PAGE>   47

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 46.

         (b) During the fourth quarter of 2000, the Company filed the following
Current Reports on Form 8-K: Form 8-K/A-4 dated May 17, 2000 (filed October 10,
2000) under item 2. reporting the amendment to NTL Incorporated's Current Report
on Form 8-K, dated May 30, 2000 by filing financial statements of CWC ConsumerCo
as of March 31, 1999 and 2000 and for the three years ended March 31, 2000; Form
8-K dated October 18, 2000 (filed October 20, 2000) under item 5. reporting the
cessation of negotiations with the Football Association Premier League and the
intention to list NTL Incorporated's shares on the New York Stock Exchange and
concurrently withdraw NTL Incorporated's listing on the Nasdaq Stock Market;
Form 8-K dated October 24, 2000 (filed October 24, 2000) under item 9. reporting
the operating statistics for NTL Incorporated's residential services for the
quarter ended September 30, 2000; Form 8-K dated October 27, 2000 (filed October
27, 2000) under item 5. reporting the trading of NTL Incorporated's shares on
the New York Stock Exchange and the withdrawal of NTL Incorporated's listing on
the Nasdaq Stock Market; Form 8-K dated November 1, 2000 (filed November 1,
2000) under item 9. reporting the planned disclosure of information at a
conference on November 1, 2000; Form 8-K dated November 2, 2000 (filed November
3, 2000) under item 5. reporting the completion of a comprehensive business
review; Form 8-K dated November 9, 2000 (filed November 9, 2000) under item 9.
reporting NTL Incorporated's financial results for the quarter ended September
30, 2000.


         (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.


                                      -45-
<PAGE>   48

                                  EXHIBIT INDEX

Exhibit No.


2.1      Agreement and Plan of Merger, dated as of February 9, 2000, among NTL
         Incorporated, NTL (Delaware), Inc. and Holdings Merger Sub Inc.
         (Incorporated by reference to the Registration Statement on Form S-3/A
         Exhibit 2.1, File No. 333-36434)

2.2      Agreement and Plan of Merger, dated as of March 26, 1999, among NTL
         Incorporated, NTL Communications and NTL Merger Inc. (Incorporated by
         reference to the Registration Statement on Form S-3, File No.
         333-72335)

2.3      Agreement and Plan of Amalgamation, dated as of February 4, 1998, as
         amended, among NTL Incorporated, NTL (Bermuda) Limited, and Comcast
         U.K. Cable Partners Limited (Incorporated by reference to the
         Registration Statement on Form S-4, File No. 333-64727)

2.4      Amendment No. 1 to Agreement and Plan of Amalgamation, dated as of May
         28, 1998, among NTL Incorporated, NTL (Bermuda) Limited and Comcast
         U.K. Cable Partners Limited (Incorporated by reference to the
         Registration Statement on Form S-4, File No. 333-64727)

2.5      Share Exchange Agreement, dated as of June 16, 1998, as amended, among
         NTL Incorporated and the shareholders of Diamond Cable Communications
         plc (Incorporated by reference to the Proxy Statement, filed by NTL
         Communications (File No. 0-22616) on January 29, 1999)

2.6      Amendment No. 1 to Share Exchange Agreement, dated as of December 21,
         1998, among NTL Incorporated and the shareholders of Diamond Cable,
         Communications plc (Incorporated by reference to the Form 8-K filed by
         NTL Communications (File No. 0-22616) on December 23, 1998)

2.7      Transaction Agreement, dated as of July 26, 1999, by and between, Bell
         Atlantic Corporation, Cable & Wireless plc, Cable & Wireless
         Communications plc and NTL Incorporated (Incorporated by reference to
         the Proxy Statement (File No. 000-25691), filed on February 11, 2000)

2.8      Investment Agreement, dated as of July 26, 1999, by and between, NTL
         Incorporated and France Telecom S.A. (Incorporated by reference to the
         Proxy Statement (File No. 000-25691), filed on February 11, 2000)

2.9(a)   Amendment No. 1 to the Investment Agreement, dated as of August 6, 1999
         (Incorporated by reference to the Proxy Statement, filed on February
         11, 2000)

2.9(b)   Amendment No. 2 to the Investment Agreement, dated as of October 8,
         1999 (Incorporated by reference to the Proxy Statement filed on
         February 11, 2000)

2.10     Purchase Agreement, dated as of February 17, 2000, by and between
         France Telecom, S.A. and NTL Incorporated (Incorporated by reference to
         the Form 8-K, filed on February 22, 2000)

2.11     Transaction Agreement dated as of December 12, 1999 among Cablecom
         Holding AG and NTL Incorporated and certain other parties thereto
         (Incorporated by reference to the 1999 Form 10-K (File No. 000-25691),
         filed on March 17, 2000)

3.1      Restated Certificate of Incorporation of NTL Incorporated*

3.2      By-Laws of NTL Incorporated (Incorporated by reference to
         Exhibit 3.2 to the Registration Statement on Form S-3, File No.
         333-72335)

4.1      Specimen of Common Stock Certificate (Incorporated by reference to
         Exhibit 4.1 to the Registration Statement on Form S-1, File No.
         33-63570)


                                      -46-
<PAGE>   49

4.2      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 the Registration
         Statement on Form S-4, File No. 33-92794)

4.3      Indenture, dated as of January 30, 1996, by and between NTL
         Communications Corp. and Chemical Bank as Trustee, with respect to the
         11-1/2% Senior Notes (Incorporated by reference to the Registration
         Statement on Form S-4, File No. 333-00118)

4.4      First Supplemental Indenture, dated as of January 22, 1996, by and
         among NTL Communications Corp. and Chemical Bank, as Trustee, with
         respect to the 12-3/4% Senior Notes (Incorporated by reference to the
         Registration Statement on Form S-4, File No. 333-00118)

4.5      Indenture, dated 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 the 1996
         Form 10-K, filed by NTL Communications (File No. 0-22616) on March 28,
         1997)

4.6      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 the
         1997 Form 10-K filed by NTL Communications (File No. 0-22616) on March
         30, 1998)

4.7      Indenture, dated as of March 13, 1998, by and between NTL
         Communications Corp. and The Chase Manhattan Bank, as Trustee, with
         respect to the 9-3/4% Senior Deferred Coupon Notes (Incorporated by
         reference to the 1997 Form 10-K filed by NTL Communications (File No.
         0-22616) on March 30, 1998)

4.8      Indenture, dated 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 the 1997 Form 10-K filed by NTL Communications (File No.
         0-22616) on March 30, 1998)

4.9      Indenture, dated as of November 2, 1998, by and among 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 the 1998 Form 10-K filed by NTL Communications (File No. 0-22616) on
         March 30, 1999)

4.10     Indenture, dated as of November 6, 1998, by and among 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 the 1998 Form 10-K filed by NTL
         Communications (File No. 0-22616) on March 30, 1999)

4.11     Indenture, dated as of December 16, 1998, by and among NTL
         Communications Corp. and The Chase Manhattan Bank, as Trustee, with
         respect to the 7% Convertible Subordinated Notes due 2008 (Incorporated
         by reference to the 1998 Form 10-K filed by NTL Communications (File
         No. 0-22616) on March 30,1999)

4.12     First Supplemental Indenture, dated as of March 31, 1999, between NTL
         Incorporated, NTL Communications Corp. and The Chase Manhattan Bank
         (Trustee), with respect to the 7% Convertible Subordinated Notes due
         2008 ($600,000,000 principal amount) (Incorporated by reference to the
         Registration Statement on Form S-4, File No. 333-72335)

4.13     Second Supplemental Indenture, dated as of March 16, 2000, between NTL
         Incorporated, NTL Communications Corp. (formerly NTL Incorporated) and
         The Chase Manhattan Bank (Trustee), with


                                      -47-
<PAGE>   50

         respect to the 7% Convertible Subordinated Notes due 2008 (Incorporated
         by reference to the Registration Statement on Form S-3/A (File No.
         333-42792), filed on August 30, 2000)

4.14     Third Supplemental Indenture, dated as of May 17, 2000, between NTL
         Incorporated, NTL Communications Corp. (formerly NTL Incorporated) and
         The Chase Manhattan Bank (Trustee), with respect to the 7% Convertible
         Subordinated Notes due 2008 (Incorporated by reference to the
         Registration Statement on Form S-3/A (File No. 333-42792), filed on
         August 30, 2000)

4.15     Indenture, dated as of April 14, 1999, between NTL Communications Corp.
         (Issuer) and The Chase Manhattan Bank (Trustee), with respect to the
         9-3/4% Senior Deferred Coupon Notes due 2009 ((pound sterling)
         330,000,000 principal amount) (Incorporated by reference to the
         Registration Statement on Form S-4, File No. 333-78405)

4.16     Indenture, dated as of February 6, 1998, between Diamond Holdings plc
         (Issuer), Diamond Cable Communications plc (Guarantor), and The Bank of
         New York (Trustee), with respect to the 10% Senior Notes due February
         1, 2008 ((pound sterling)135,000,000 principal amount) and 9-1/8%
         Senior Notes due February 1, 2008 ((pound sterling)110,000,000
         principal amount) (Incorporated by reference to Diamond Cable
         Communications plc's Registration Statement on Form S-4, File No.
         333-48413)

4.17     Indenture, dated as of February 27, 1997, between Diamond Cable
         Communications plc (Issuer) and The Bank of New York (Trustee), with
         respect to the 10-3/4% Senior Discount Notes due February 15, 2007
         ($420,500,000 principal amount) (Incorporated by reference to Diamond
         Cable Communications plc's Registration Statement on Form S-4, File No.
         333-25193)

4.18     Indenture, dated as of December 15, 1995, between Diamond Cable
         Communications plc (Issuer) and The Bank of New York (Trustee), with
         respect to the 11-3/4% Senior Discount Notes due December 15, 2005
         (Incorporated by reference to Diamond Cable Communications plc's
         Registration Statement on Form S-1, File No. 33-98374)

4.19     Indenture, dated as of November 11, 1995, between Comcast UK Cable
         Partners Limited and Bank of Montreal Trust Company with respect to the
         11.20% Senior Discount Debentures due 2007 (Incorporated by reference
         to the Registration Statement on Form S-1 of NTL Triangle LLC (File No.
         33-96932) declared effective November 9, 1995)

4.20     Indenture, dated as of September 28, 1994, between Diamond Cable
         Communications plc (Issuer) and The Bank of New York (Trustee), with
         respect to the 13-1/4% Senior Discount Notes due September 30, 2004
         (Incorporated by reference to Diamond Cable Communications plc's
         Registration Statement on Form S-1, File No. 33-83740)

4.21     First Supplemental Indenture, dated as of March 31, 1996, between
         Diamond Cable Communications plc (Issuer) and The Bank of New York
         (Trustee) (Incorporated by reference to Diamond Cable Communications
         plc's Registration Statement on Form S-1, File No. 33-83740)

4.22     Indenture, dated as of November 24, 1999, between NTL Communications
         Corp. (Issuer) and The Chase Manhattan Bank (Trustee), with respect to
         the 9-1/4% Senior Notes due 2006 ((euro) 250,000,000 principal amount)
         (Incorporated by reference to the Registration Statement on Form S-4,
         File No. 333-95267)

4.23     Indenture, dated as of November 24, 1999, between NTL Communications
         Corp. (Issuer) and The Chase Manhattan Bank (Trustee), with respect to
         the 9-7/8% Senior Notes Due 2009 ((euro)350,000,000 principal amount)
         (Incorporated by reference to the Registration Statement on Form S-4,
         File No. 333-95267)

4.24     Indenture, dated as of November 24, 1999, between NTL Communications
         Corp. (Issuer) and The Chase Manhattan Bank (Trustee), with respect to
         the 11-1/2% Senior Deferred Coupon Notes due 2009 ((euro) 175,000,000
         principal amount) (Incorporated by reference to the Registration
         Statement on Form S-4, File No. 333-95267)

4.25     Indenture, dated as of December 22, 1999, between NTL Incorporated
         (Issuer) and The Chase Manhattan Bank (Trustee), with respect to the
         5-3/4% Convertible Subordinated Notes Due 2009


                                      -48-
<PAGE>   51

         ($1,200,000,000 principal amount) (Incorporated by reference to the
         1999 Form 10-K filed by NTL Incorporated (File No. 000-25691) on March
         17, 2000)

4.26     First Supplemental Indenture, dated as of May 17, 2000, between NTL
         Incorporated and The Chase Manhattan Bank (Trustee) (Incorporated by
         reference to the Registration Statement on Form S-3/A (File No.
         333-36434), filed on July 14, 2000)

4.27     Indenture, dated as of October 2, 2000, between NTL Communications
         Corp. (Issuer) and The Chase Manhattan Bank (Trustee), with respect to
         the 11-7/8% Senior Notes due 2010 (Incorporated by reference to the
         Registration Statement on Form S-4 (File No. 333-48648), filed on
         October 26, 2000)

4.28     Indenture, dated as of January 24, 2001, between NTL Communications
         Corp. (Issuer) and The Chase Manhattan Bank (Trustee), with respect to
         the 12-3/8% Senior Notes due 2008 (Incorporated by reference to the
         Registration Statement on Form S-4 (File No. 333-55288), filed on
         February 9, 2001)

4.29     Indenture, dated as of April 14, 1999, between NTL Communications Corp.
         (Issuer) and The Chase Manhattan Bank (Trustee), with respect to the
         9-3/4% Senior Notes due 2009 (Incorporated by reference to the
         Registration Statement on Form S-4 (File No. 333-78405), filed on April
         13, 1999)

4.30     Registration Rights Agreement, dated as of February 2, 2000, by and
         between NTL Incorporated and Bell Atlantic Corporation (Incorporated by
         reference to the Proxy Statement (File No. 000-25691), filed on
         February 11, 2000)

4.31     Registration Rights Agreement, dated as of February 2, 2000, by and
         between NTL Incorporated and Cable & Wireless plc (Incorporated by
         reference to the Proxy Statement (File No. 000-25691), filed on
         February 11, 2000)

4.32     Registration Rights Agreement, dated as of December 16, 1998 by and
         among NTL Communications Corp. and Donaldson, Lufkin & Jenrette
         Securities Corporation, Morgan Stanley & Co. Incorporated, Goldman,
         Sachs & Co., Chase Securities Inc., Salomon Smith Barney Inc, BT Alex.
         Brown Incorporated and Warburg Dillon Read LLC with respect to the 7%
         Convertible Subordinated Notes due 2008. (Incorporated by reference to
         the 1998 Form 10-K filed by NTL Communications (File No. 0-22616) on
         March 30, 1999)

4.33     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*

4.34     Registration Rights Agreement, dated as of March 5, 1999, between NTL
         Communications Corp. and the Shareholders of Diamond Cable
         Communications plc (Incorporated by reference to the Registration
         Statement on Form S-2, File No. 333-81395)

4.35     Registration Rights Agreement, dated as of October 29, 1998, between
         NTL Incorporated, NTL (Bermuda) Limited and Comcast Corporation and
         Warburg, Pincus Investors, L.P. (Incorporated by reference to the
         Registration Statement on Form S-2, File No. 333-81395)

4.36     Form of Preferred Stock (Incorporated by reference to the 1996 Form
         10-K filed by NTL Communications (File No. 0-22616) on March 28, 1997)

4.37     Registration Rights Agreement, dated as of January 24, 2001, by and
         among NTL Communications Corp. and Morgan Stanley & Co. International
         Limited, J.P. Morgan Securities Ltd., Goldman Sachs International, Bank
         of America International Limited, BNP Paribas Securities Corp., CIBC
         World Markets plc and the Royal Bank of Scotland plc (Incorporated by
         reference to NTL Communication Corp.'s Registration Statement on Form
         S-4 (File No. 333-55288), filed on February 9, 2001)

4.38     Registration Rights Agreement, dated as of February 8, 2001, by and
         among NTL Communications Corp. and Morgan Stanley & Co. International
         Limited, J.P. Morgan Securities Ltd., Goldman Sachs International, Bank
         of America International Limited, BNP Paribas Securities Corp., CIBC
         World Markets plc and the Royal Bank of Scotland plc (Incorporated by
         reference to NTL Communication Corp.'s Registration Statement on Form
         S-4 (File No. 333-55288), filed on February 9, 2001)


                                      -49-
<PAGE>   52

4.39     Rights Agreement entered into by NTL Incorporated and Continental Stock
         Transfer & Trust Company (Incorporated by reference to Exhibit 4.2, to
         the Registration Statement on Form S-1, File No. 33-63570)

4.39(a)  Amendment No. 1 to the Rights Agreement, dated as of March 31, 1999,
         between NTL Incorporated and Continental Stock Transfer & Trust
         Company, as Rights Agent. (Incorporated by reference to the
         Registration Statement on Form S-8, File No. 333-76601)

4.39(b)  Amendment No. 2 to the Rights Agreement, dated as of October 23, 1999,
         between NTL Incorporated and Continental Stock Transfer & Trust
         Company, as Rights Agent (Incorporated by reference to the 1999 Form
         10-K Incorporated (File No. 000-25691), filed on March 17, 2000)

4.39(c)  Amendment No. 3 to the Rights Agreement, dated as of March 28, 2000,
         between NTL Incorporated and Continental Stock Transfer & Trust
         Company, as Rights Agent*

4.39(d)  Amendment No. 4 to the Rights Agreement, dated as of May 17, 2000,
         between NTL Incorporated and Continental Stock Transfer & Trust
         Company, as Rights Agent*

4.39(e)  Amendment No. 5 to the Rights Agreement, dated as of May 25, 2000,
         between Incorporated and Continental Stock Transfer & Trust Company, as
         Rights Agent*

10.1     Compensation Plan and Agreements, as amended and restated effective
         June 3, 1997 (Incorporated by reference to the 1997 Form 10-K filed by
         NTL Communications (File No. 0-22616) on March 30, 1998)

10.2     Rules of the NTL Sharesave Plan, adopted by NTL Incorporated on October
         28, 1997 (Incorporated by reference to the 1998 Form 10-K filed by NTL
         Communications (File No. 0-22616) on March 30, 1999)

10.3     Form of Director and Officer Indemnity Agreement (together with a
         schedule of executed Indemnity Agreements) (Incorporated by reference
         to the 1999 Form 10-K (File No. 000-25691), filed on March 17, 2000)

10.4     1998 Non-Qualified Stock Option Plan, as Amended and Restated October
         1998 (Incorporated by reference to the 1998 Form 10-K filed by NTL
         Communications (File No. 0-22616) on March 30, 1999)

10.5     Bridge Loan Agreement, dated as of March 17, 1999, among NTL
         Incorporated the Lenders named therein and Goldman Sachs Credit
         Partners L.P. (Incorporated by reference to the 1998 Form 10-K filed by
         NTL Communications (File No. 0-22616) on March 30, 1999)

10.6     Agreement, dated August 14, 1998, among TeleWest Communications PLC,
         TeleWest Communications Holdings Limited, NTL (Bermuda) Limited, and
         NTL Incorporated (Incorporated by reference to the Form 8-K, filed by
         NTL Communications (File No. 0-22616) on August 18, 1998)

10.7     Note Purchase Agreement, dated as of February 4, 2000, between NTL
         Incorporated and Morgan Stanley and Co. Incorporated re: Senior
         Increasing Rate Notes due 2001 ((pound sterling) 2,376,000,000
         principal amount) (Incorporated by reference to the Proxy Statement,
         filed February 11, 2000)

10.8     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*

10.9     Credit Agreement relating to the acquisition of Cable & Wireless
         Communications (Holdings) PLC, dated as of May 30, 2000, between NTL
         Communications Limited, NTL Business Limited, NTL Communications Corp.,
         Chase Manhattan PLC and Morgan Stanley Dean Witter Limited, Chase
         Manhattan International Limited*


                                      -50-
<PAGE>   53

11       Calculation of net loss per share*

21       Subsidiaries of the Registrant*

23       Consent of Ernst & Young LLP*

------------

* Filed herewith.


                                      -51-
<PAGE>   54

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: March 30, 2001

NTL INCORPORATED

By: /s/ BARCLAY KNAPP
Barclay Knapp
President and Chief Executive Officer
(Principal Executive Officer)


                                      -52-
<PAGE>   55

    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 KNAPP                 President and Chief           March 30, 2001
Barclay Knapp                     Executive Officer
                                  (Principal Executive
                                  Officer)

/s/ GEORGE S. BLUMENTHAL          Chairman of the Board         March 30, 2001
George S. Blumenthal              and Treasurer

/s/ JOHN F. GREGG                 Chief Financial Officer       March 30, 2001
John F. Gregg                     (Chief Financial Officer)

/s/ GREGG N. GORELICK             Vice President-Controller     March 30, 2001
Gregg N. Gorelick                 (Principal Accounting
                                  Officer)

/s/ SIDNEY R. KNAFEL              Director                      March 30, 2001
Sidney R. Knafel

/s/ TED H. MCCOURTNEY             Director                      March 30, 2001
Ted H. McCourtney

/s/ DEL MINTZ                     Director                      March 30, 2001
Del Mintz

/s/ ALAN J. PATRICOF              Director                      March 30, 2001
Alan J. Patricof

/s/ WARREN POTASH                 Director                      March 30, 2001
Warren Potash

/s/ MICHAEL S. WILLNER            Director                      March 30, 2001
Michael S. Willner

/s/ ROBERT T. GOAD                Director                      March 30, 2001
Robert T. Goad

/s/ JEAN-LOUIS VINCIGUERRA        Director                      March 30, 2001
Jean-Louis Vinciguerra

/s/ MICHEL BERTINETTO             Director                      March 30, 2001
Michel Bertinetto

/s/ BERNARD IZERABLE              Director                      March 30, 2001
Bernard Izerable


                                      -53-
<PAGE>   56

                       Form 10-K -- Item 14(a)(1) and (2)

                        NTL Incorporated and Subsidiaries

                   Index to Consolidated Financial Statements
                        and Financial Statement Schedules


The following consolidated financial statements of NTL Incorporated and
subsidiaries are included in item 8:


<TABLE>
<S>                                                                                                         <C>
Report of Independent Auditors ...........................................................................   F-2
Consolidated Balance Sheets - December 31, 2000 and 1999 .................................................   F-3
Consolidated Statements of Operations  -
   Years ended December 31, 2000, 1999 and 1998 ..........................................................   F-5
Consolidated Statement of Shareholders' Equity  -
   Years ended December 31, 2000, 1999 and 1998 ..........................................................   F-6
Consolidated Statements of Cash Flows  -
   Years ended December 31, 2000, 1999 and 1998 ..........................................................   F-8
Notes to Consolidated Financial Statements ..............................................................   F-10
</TABLE>

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

<TABLE>
<S>                                                                                                         <C>
Schedule I - Condensed Financial Information of Registrant ..............................................   F-40
Schedule II - Valuation and Qualifying Accounts .........................................................   F-45
</TABLE>

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
<PAGE>   57

                         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, 2000 and 1999, and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 2000. 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, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, 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.



                                                              ERNST & YOUNG LLP



New York, New York
March 2, 2001


                                      F-2
<PAGE>   58

                        NTL Incorporated and Subsidiaries
                           Consolidated Balance Sheets
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                                  2000           1999
                                                                                  ----           ----
<S>                                                                          <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                 $   579.4      $ 2,597.2
   Marketable securities                                                          60.0          344.5
   Accounts receivable - trade, less allowance for doubtful accounts of
     $141.4 (2000) and $85.6 (1999)                                              729.1          294.2
   Other                                                                         432.0           82.7
                                                                             ---------      ---------
Total current assets                                                           1,800.5        3,318.6

Fixed assets, net                                                             12,693.0        5,597.7
Intangible assets, net                                                        13,061.0        2,927.8
Other assets, net of accumulated amortization
   of $91.9 (2000) and $49.4 (1999)                                              829.2          367.5
                                                                             ---------      ---------
Total assets                                                                 $28,383.7      $12,211.6
                                                                             =========      =========
</TABLE>


                                      F-3
<PAGE>   59

                        NTL Incorporated and Subsidiaries
                     Consolidated Balance Sheets (continued)
                                  (in millions)


<TABLE>
<CAPTION>
                                                                                          DECEMBER 31,
                                                                                       2000            1999
                                                                                       ----            ----
<S>                                                                               <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
   Current liabilities:
   Accounts payable                                                               $   506.3       $   224.7
   Accrued expenses and other                                                       1,280.6           438.2
   Accrued construction costs                                                         196.9            79.8
   Interest payable                                                                   151.3            71.1
   Deferred revenue                                                                   492.8           160.8
   Current portion of long-term debt                                                   12.6            82.6
                                                                                  ---------       ---------
Total current liabilities                                                           2,640.5         1,057.2

Long-term debt                                                                     15,044.1         8,798.0
Other                                                                                  43.1            --
Commitments and contingent liabilities
Deferred income taxes                                                                 205.4            77.7
Redeemable preferred stock - $.01 par value, plus accreted dividends;
   liquidation preference $2,085.7; less unamortized discount of $2.5 (2000)
   and $2.8 (1999); issued and outstanding 2.0 (2000) and 0.1 (1999) shares
                                                                                    2,083.2           141.8

Shareholders' equity:
   Series preferred stock - $.01 par value;
     authorized 10.0 shares; liquidation preference $2,858.1; issued and
     outstanding 2.9 (2000) and 1.3 (1999) shares                                      --              --
   Common stock - $.01 par value; authorized 800.0 shares; issued and
     outstanding 272.1 (2000) and 132.4 (1999) shares                                   2.7             1.3
   Additional paid-in capital                                                      13,764.7         4,125.1
   Accumulated other comprehensive (loss)                                            (448.9)           (2.1)
   (Deficit)                                                                       (4,951.1)       (1,987.4)
                                                                                  ---------       ---------
                                                                                    8,367.4         2,136.9
                                                                                  ---------       ---------
Total liabilities and shareholders' equity                                        $28,383.7       $12,211.6
                                                                                  =========       =========
</TABLE>

See accompanying notes.


                                      F-4
<PAGE>   60

                        NTL Incorporated and Subsidiaries
                      Consolidated Statements of Operations
                      (in millions, except per share data)


<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                            2000            1999            1998
<S>                                                    <C>             <C>             <C>
REVENUES
Consumer telecommunications and television             $ 1,819.8       $   834.3       $   355.6
Business telecommunications                                702.2           452.5           157.7
Broadcast transmission and other                           318.8           297.3           231.3
Other telecommunications                                    --              --               2.4
                                                       ---------       ---------       ---------
                                                         2,840.8         1,584.1           747.0

COSTS AND EXPENSES
Operating expenses                                       1,387.6           798.6           400.9
Selling, general and administrative expenses             1,109.1           574.6           270.7
Franchise fees                                              --              16.5            25.0
Other charges                                               92.7            16.2            (4.2)
Corporate expenses                                          47.5            29.4            17.1
Depreciation and amortization                            2,122.8           791.3           266.1
                                                       ---------       ---------       ---------
                                                         4,759.7         2,226.6           975.6
                                                       ---------       ---------       ---------
Operating (loss)                                        (1,918.9)         (642.5)         (228.6)

OTHER INCOME (EXPENSE)
Interest income and other, net                               1.6            49.4            46.0
Interest expense                                        (1,036.8)         (680.7)         (328.8)
Other gains                                                 --             493.1            --
Foreign currency transaction (losses) gains               (120.6)           12.7             4.2
                                                       ---------       ---------       ---------
(Loss) before income taxes and extraordinary item       (3,074.7)         (768.0)         (507.2)
Income tax benefit                                         111.0            35.3             3.3
                                                       ---------       ---------       ---------
(Loss) before extraordinary item                        (2,963.7)         (732.7)         (503.9)
Loss from early extinguishment of debt                      --              (3.0)          (30.7)
                                                       ---------       ---------       ---------
Net (loss)                                              (2,963.7)         (735.7)         (534.6)
Preferred stock dividends                                 (194.0)          (73.7)          (18.8)
                                                       ---------       ---------       ---------
Net (loss) available to common shareholders            $(3,157.7)      $  (809.4)      $  (553.4)
                                                       =========       =========       =========
Basic and diluted net (loss) per common share:
   (Loss) before extraordinary item                    $  (14.54)      $   (6.75)      $   (8.12)
   Extraordinary item                                       --              (.03)           (.48)
                                                       ---------       ---------       ---------
  Net (loss) per common share                          $  (14.54)      $   (6.78)      $   (8.60)
                                                       =========       =========       =========
  Weighted average shares                                  217.1           119.4            64.4
                                                       =========       =========       =========
</TABLE>

See accompanying notes.


                                      F-5
<PAGE>   61

                       NTL Incorporated and Subsidiaries

                 Consolidated Statement of Shareholders' Equity

                                 (in millions)

<TABLE>
<CAPTION>
                                                           SERIES PREFERRED STOCK        COMMON STOCK
                                                              $.01 PAR VALUE            $.01 PAR VALUE
                                                             SHARES        PAR        SHARES         Par
                                                             ------        ---        ------         ---
<S>                                                        <C>            <C>         <C>          <C>
Balance, December 31, 1997                                     --         $ --         32.2        $ 0.3
Exercise of stock options                                                               0.3           --
Exercise of warrants                                                                    0.1
Accreted dividends on preferred stock
Accretion of discount on preferred stock
Conversion of 7-1/4% Convertible Subordinated Notes                                     6.9          0.1
Conversion of series preferred stock                           --                       1.9          --
Preferred stock issued for an acquisition                     0.2           --
Common stock issued for an acquisition                                                 18.8          0.2
Warrants issued in connection with consent
   solicitations
Comprehensive income:
 Net loss for the year ended December 31, 1998
Currency translation adjustment
     Total
                                                            ---------------------------------------------
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 Subordinated 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 income:
 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
                                                            =============================================
</TABLE>


                                      F-6
<PAGE>   62

                        NTL Incorporated and Subsidiaries
           Consolidated Statement of Shareholders' Equity (continued)
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                             ACCUMULATED OTHER
                                                                                            COMPREHENSIVE LOSS
                                                                                         ---------------------------
                                                                                                          UNREALIZED
                                                          ADDITIONAL                      FOREIGN            NET
                                                           PAID-IN      COMPREHENSIVE     CURRENCY        LOSSES ON
                                                           CAPITAL          LOSS         TRANSLATION      INVESTMENTS      (DEFICIT)
                                                        ----------------------------------------------------------------------------
<S>                                                     <C>             <C>              <C>              <C>              <C>
  Balance, December 31, 1997                               $538.1                          $117.0                          $(717.1)
  Exercise of stock options                                   6.3
  Exercise of warrants                                        0.5
  Accreted dividends on preferred stock                     (18.8)
  Accretion of discount on preferred stock                   (0.3)
  Conversion of 7-1/4% Convertible Subordinated Notes       186.9
  Conversion of series preferred stock                         --
  Preferred stock issued for an acquisition                 178.5
  Common stock issued for an acquisition                    600.3
  Warrants issued in connection with consent                 10.1
     solicitations
  Comprehensive income:
  Net loss for the year ended December 31, 1998                           $(534.6)                                          (534.6)
  Currency translation adjustment                                           (12.3)          (12.3)
                                                                          -------
     Total                                                                $(546.9)
                                                        ----------------------------------------------------------------------------
  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 Subordinated Notes           269.2
  Common stock issued for an acquisition                    971.3
  Stock options issued in connection with an                  6.6
     acquisition
  Issuance of warrants                                        4.5
  Stock splits                                               (0.5)
  Comprehensive income:
  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 income:
  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)
                                                        ============================================================================
</TABLE>

See accompanying notes.


                                      F-7
<PAGE>   63

                        NTL Incorporated and Subsidiaries
                      Consolidated Statements of Cash Flows
                                  (in millions)

<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                                2000              1999             1998
                                                                ----              ----             ----
<S>                                                        <C>               <C>              <C>
OPERATING ACTIVITIES
Net loss                                                   $(2,963.7)        $  (735.7)       $  (534.6)
Adjustment to reconcile net loss to net cash
  (used in) provided by operating activities:
  Depreciation and amortization                              2,122.8             791.3            266.1
  Loss from early extinguishment of debt                        --                 3.0             30.7
  Gain on sale of investment in Cable London PLC                --              (493.1)            --
  Amortization of non competition agreements                    --                --                1.4
  Provision for losses on accounts receivable                   98.9              46.2             27.3
  Deferred income taxes                                       (112.1)            (37.3)            (3.3)
  Amortization of original issue discount                      473.4             451.4            232.7
  Other                                                        (10.3)            (10.6)           (30.9)
  Changes in operating assets and liabilities, net
    of effect from business acquisitions:
       Accounts receivable                                    (366.6)           (139.4)           (70.4)
       Other current assets                                    (69.5)            (38.9)            22.6
       Other assets                                             43.2             (25.2)            --
       Accounts payable                                        (83.7)             43.8             (2.6)
       Accrued expenses and other                              379.3             126.2             15.3
       Deferred revenue                                        186.4              71.9             26.8
                                                           ---------         ---------        ---------
Net cash (used in) provided by operating activities           (301.9)             53.6            (18.9)

INVESTING ACTIVITIES
Acquisitions, net of cash acquired                         (10,940.0)         (1,128.3)          (746.8)
Purchase of fixed assets                                    (2,257.0)         (1,211.3)          (772.2)
Payment of deferred purchase price                              (2.9)             --               --
Increase in other assets                                      (510.8)            (59.3)           (35.6)
Proceeds from sales of assets                                   --               692.5              1.3
Purchase of marketable securities                             (158.4)           (747.4)          (540.6)
Proceeds from sales of marketable securities                   452.6             676.6            291.3
                                                           ---------         ---------        ---------
Net cash (used in) investing activities                    (13,416.5)         (1,777.2)        (1,802.6)
</TABLE>


                                      F-8
<PAGE>   64

                        NTL Incorporated and Subsidiaries
                Consolidated Statements of Cash Flows (continued)
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                              YEAR ENDED DECEMBER 31,
                                                                                    2000              1999             1998
                                                                                    ----              ----             ----
<S>                                                                             <C>               <C>              <C>
FINANCING ACTIVITIES
Proceeds from borrowings, net of financing costs                                 6,870.1           3,019.4          3,525.6
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             --
Redemption of preferred stock                                                       --              (125.3)            --
Principal payments                                                              (1,303.0)           (758.2)          (845.0)
Cash released from (placed in) escrow for debt repayment                            77.5             (87.0)          (217.6)
Consent solicitation payments                                                       --                --              (11.3)
Proceeds from issuance of redeemable preferred stock                             1,850.0              --               --
Proceeds from exercise of stock options and warrants                                44.2              42.1              6.8
                                                                               ---------         ---------        ---------
Net cash provided by financing activities                                       11,728.4           3,591.0          2,458.5

Effect of exchange rate changes on cash                                            (27.8)             (6.5)             0.4
                                                                               ---------         ---------        ---------
(Decrease) increase in cash and cash equivalents                                (2,017.8)          1,860.9            637.4
Cash and cash equivalents at beginning of year                                   2,597.2             736.3             98.9
                                                                               ---------         ---------        ---------
Cash and cash equivalents at end of year                                       $   579.4         $ 2,597.2        $   736.3
                                                                               =========         =========        =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest exclusive of amounts capitalized
                                                                               $   495.0         $   180.3        $    90.5
Income taxes paid                                                                    6.7               2.4              0.3

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Accretion of dividends and discount on preferred stock                         $    98.1         $    44.4        $    19.1
Conversion of Convertible Notes, net of unamortized
   deferred financing costs                                                         --               269.3            187.0
Preferred stock issued for an acquisition                                           --                --              178.5
Common stock and stock options issued for acquisitions                           5,488.3             978.0            600.5
Warrants issued in connection with consent solicitations                            --                --               10.1
Conversion of series preferred stock                                                 7.6              --               --
</TABLE>


See accompanying notes.


                                      F-9
<PAGE>   65
                       NTL Incorporated and Subsidiaries

                   Notes to Consolidated Financial Statements

1.     CORPORATE RESTRUCTURING AND BUSINESS

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").

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

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. 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.


                                      F-10

<PAGE>   66
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

CASH EQUIVALENTS

Cash equivalents are short-term highly liquid investments purchased with a
maturity of three months or less. Cash equivalents were $256.2 million and
$2,101.8 million at December 31, 2000 and 1999, respectively, which consisted
primarily of U.S. Treasury bills (2000 only), bank time deposits and corporate
commercial paper. At December 31, 2000 and 1999, $68.5 million and $2,039.5
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 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 and 1999 consisted of corporate
commercial paper. During the years ended December 31, 2000, 1999 and 1998, there
were no realized gains or losses on sales of securities. All of the marketable
securities as of December 31, 2000 and 1999 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.

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.


                                      F-11
<PAGE>   67
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 services 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.

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. The investment in Cable London PLC was
accounted for under 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.

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 2000, 1999 and 1998, interest of $95.0 million, $41.8 million and $27.8
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.


                                      F-12
<PAGE>   68
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

2.     SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 $113.0 million, $35.9 million and $34.0 million in 2000, 1999 and
1998, 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" ("APB No. 25") 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 the British
pound/U.S. dollar exchange rate. 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.

3.     RECENT ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB
101 provides guidance on the recognition, presentation and disclosure of revenue
in financial statements. SAB 101 was required to be adopted retroactive to
January 1, 2000. The adoption of SAB 101 had no significant effect on revenues
or results of operations.

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 will be
recognized in the results of operations.

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.

4.     CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

NEED FOR ADDITIONAL FINANCING

The Company will require additional financing in the future. There can be no
assurance that the required financing will be obtainable on acceptable terms.

CONCENTRATIONS

The Company's broadcast transmission and related services business is
substantially dependent upon contracts with a small group of companies for the
right to broadcast their programming, and upon site sharing agreements for a
large number of its transmission sites. The loss of any one of these contracts
or agreements could have a material adverse effect on the business of the
Company.

                                      F-13
<PAGE>   69
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

CURRENCY RISK

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.

5. FIXED ASSETS

Fixed assets consist of:

<TABLE>
<CAPTION>
                                                         DECEMBER 31,
                                                    2000              1999
                                               ---------------------------
                                                        (in millions)
<S>                                            <C>               <C>
Operating equipment                            $11,753.2         $ 5,111.3
Other equipment                                  1,145.2             715.2
Construction-in-progress                         1,611.1             669.4
                                               ---------------------------
                                                14,509.5           6,495.9
Accumulated depreciation                        (1,816.5)           (898.2)
                                               ---------------------------
                                               $12,693.0         $ 5,597.7
                                               ===========================
</TABLE>

Depreciation expense for the years ended December 31, 2000, 1999, and 1998 was
$996.6 million, $490.3 million and $207.5 million, respectively.


                                      F-14
<PAGE>   70
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

6.     INTANGIBLE ASSETS

Intangible assets consist of:

<TABLE>
<CAPTION>
                                                                                           DECEMBER 31,
                                                                                       2000             1999
                                                                                       ----             ----
                                                                                          (in millions)
<S>                                                                               <C>              <C>
Goodwill, net of accumulated amortization of
   $1,103.6 (2000) and $193.8 (1999)                                              $12,523.0        $ 2,477.1
License acquisition costs, net of accumulated amortization of $215.8
   (2000) and $141.7 (1999)                                                           139.2            225.0
Customer lists, net of accumulated amortization of
   $110.7 (2000) and $30.9 (1999)                                                     318.2            159.3
Other intangibles, net of accumulated amortization
   of $13.8 (2000) and $3.2 (1999)                                                     80.6             66.4
                                                                                  --------------------------
                                                                                  $13,061.0        $ 2,927.8
                                                                                  ==========================
</TABLE>

The Company made the following acquisitions in 1999:

In March 1999, the Company acquired Diamond Cable Communications plc
("Diamond"). The Company issued an aggregate of 19.9 million shares of common
stock in exchange for each ordinary share and deferred share of Diamond. The
Company's common stock was valued at $971.4 million, the fair value at the time
of the announcement. In addition, the Company issued options to purchase 191,000
shares of the Company's common stock to holders of Diamond options, which were
valued at $6.6 million. The Company assumed Diamond's debt including five
different notes with an aggregate principal amount at maturity of $1,564.6
million. Diamond is a provider of telephone, cable television and Internet
services in England.

In April 1999, a subsidiary of the Company ("NTL Australia") purchased all of
the shares of the entity which owns the Australian National Transmission Network
for an aggregate purchase price of approximately $423.5 million. NTL Australia
provides exclusive television and radio transmission services to Australia's
national TV and radio broadcasters, serves regional and community TV and radio
broadcasters and provides equipment hosting services to telecom operators and
emergency service communications providers on its towers.

In July 1999, the Company acquired Cablelink Limited ("Cablelink") for IR pound
535.2 million ($692.5 million), of which IR pound 455.2 million ($589.0 million)
was paid in cash and IR pound 80.0 million ($103.5 million) was paid through the
issuance of Variable Rate Redeemable Guaranteed Loan Notes due 2002. Cablelink
provides multi-channel television and information services in Dublin, Galway and
Waterford, Ireland.


                                      F-15
<PAGE>   71
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

6.     INTANGIBLE ASSETS (CONTINUED)

The Company acquired the five franchise areas comprising the "1G Networks" of
France Telecom for approximately 373.2 million French francs ($60.1 million) in
two stages completed in August and December 1999. The 1G Networks hold exclusive
licenses to provide analog and digital television services in four franchise
areas in Ile-de-France (Greater Paris) and in the franchise area of Toulon and
LaValette.

In September 1999, the Company acquired the shares of Workplace Technologies
plc, one of the United Kingdom's leading data network service integrators, in
exchange) for (pound sterling) 105.2 million ($172.5 million), of which (pound
sterling) 100.7 million ($165.1 million) was paid in cash and (pound sterling)
4.5 million ($7.4 million) was paid through the issuance of demand notes.

These 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. The
aggregate purchase price of $2,347.8 million, including costs incurred of $21.2
million, plus the fair value of liabilities assumed net of tangible assets
acquired aggregated $2,454.8 million, which has been allocated as follows:
$143.5 million to license acquisition costs, $130.9 million to customer lists,
$69.4 million to other intangibles and $2,111.0 million to goodwill.

The Company made the following acquisitions in 2000:

On May 30, 2000, the Company acquired the consumer cable telephone, Internet and
television operations of CWC in the United Kingdom ("ConsumerCo"). The Company
paid cash of (pound sterling) 2,917.0 million ($4,364.7 million) and issued an
aggregate of 84.9 million shares of its common stock in exchange for all of the
shares of CWC. In addition, the Company paid (pound sterling) 2,155.3 million
($3,225.0 million) to repay a portion of ConsumerCo's debt. The Company's common
stock was valued at $5,488.3 million, the fair value at the time of the
announcement. This acquisition was funded by a new bank facility under which
(pound sterling) 2,376.0 million ($3,555.2 million) was borrowed and by an
additional investment by France Telecom in the Company, as described below.

On March 28, 2000, the Company acquired the cable assets of the Cablecom Group
("Cablecom") in Switzerland for cash of CHF 5,800.0 million ($3,510.2 million),
a substantial portion of which was funded by a new bank facility of CHF 2,700.0
million ($1,630.5 million) and the Company's issuance of $1,850.0 million of
preferred stock to France Telecom and a group of commercial banks.

These 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. The
aggregate purchase price of $16,639.7 million, including costs incurred of $51.5
million, exceeded the fair value of net tangible assets acquired by $11,161.1
million, which has been allocated as follows: $248.9 million to customer lists,
$37.4 million to other intangibles, $73.1 million to deferred tax liabilities
and $10,947.9 million to goodwill.


                                      F-16
<PAGE>   72
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

6.    INTANGIBLE ASSETS (CONTINUED)

The pro forma unaudited consolidated results of operations for the years ended
December 31, 2000 and 1999 assuming consummation of the above mentioned
transactions as of January 1, 1999 is as follows. 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.

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                                   2000              1999
                                                                   ----              ----
                                                           (in millions, except per share data)
<S>                                                           <C>               <C>
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 share:
(Loss) before extraordinary item                                 (14.53)           (12.46)
Net (loss)                                                       (14.53)           (12.47)
</TABLE>

Amortization of intangible and other assets charged to expense for the years
ended December 31, 2000, 1999 and 1998 was $1,126.2 million, $301.0 million and
$58.6 million, respectively.

7.   INVESTMENT IN CABLE LONDON PLC

NTL (Triangle) LLC ("NTL Triangle") (formerly known as NTL (Bermuda) Limited), a
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 (pound sterling) 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-17
<PAGE>   73
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

8.   LONG-TERM DEBT

Long-term debt consists of:

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,
                                                                               2000             1999
                                                                               ----             ----
                                                                                 (in millions)
<S>                                                                  <C>  <C>              <C>
NTL Delaware:
  5-3/4% Convertible Subordinated Notes                              (a)  $ 1,200.0        $ 1,200.0

 ConsumerCo:
  Term Loan Facility and other                                                 21.7             --

 NTL Business:
  Credit Agreement                                                   (w)    3,030.3             --

 Cablecom:
  Term Loan Facility                                                 (x)    1,666.4             --
  Revolving Facility                                                 (x)      320.9             --
  Other                                                                        15.3             --

NTL Communications:
  12-3/4% Senior Deferred Coupon Notes                               (b)      277.8            268.1
  11-1/2% Senior Deferred Coupon Notes                               (c)    1,040.5            930.4
  10% Senior Notes                                                   (d)      400.0            400.0
  9-1/2% Senior Sterling Notes, less unamortized discount            (e)      186.5            201.4
  10-3/4% Senior Deferred Coupon Sterling Notes                      (f)      353.6            343.7
  9-3/4% Senior Deferred Coupon Notes                                (g)    1,048.5            952.8
  9-3/4% Senior Deferred Coupon Sterling Notes                       (h)      360.8            354.4
  11-1/2% Senior Notes                                               (i)      625.0            625.0
  12-3/8% Senior Deferred Coupon Notes                               (j)      323.6            287.0
  7% Convertible Subordinated Notes                                  (k)      599.3            599.3
  Variable Rate Redeemable Guaranteed Loan Notes                     (l)       --               76.8
  9-1/4% Senior Euro Notes                                           (m)      234.7            252.3
  9-7/8% Senior Euro Notes                                           (n)      328.6            353.2
  11-1/2% Senior Deferred Coupon Euro Notes                          (o)      127.9            123.1
  11-7/8% Senior Notes, less unamortized discount                    (p)      489.6             --

 NTL Communications Limited:
  Credit Agreement                                                   (w)      375.3             --

 NTL Triangle:
  11.2% Senior Discount Debentures                                   (q)      517.3            467.3
  Other                                                                         5.2              8.0

Diamond:
  13-1/4% Senior Discount Notes                                      (r)      285.1            285.1
  11-3/4% Senior Discount Notes                                      (s)      531.0            476.2
  10-3/4% Senior Discount Notes                                      (t)      373.9            336.9
  10% Senior Sterling Notes                                          (u)      201.9            218.1
  9-1/8% Senior Notes                                                (v)      110.0            110.0
  Other                                                                         6.0             11.5
                                                                          --------------------------
                                                                           15,056.7          8,880.6
Less current portion                                                           12.6             82.6
                                                                          --------------------------
                                                                          $15,044.1        $ 8,798.0
                                                                          ==========================
</TABLE>


                                      F-18
<PAGE>   74
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

8.     LONG-TERM DEBT (CONTINUED)

(a)    5-3/4% Convertible Notes due December 15, 2009, principal amount at
       maturity of $1,200.0 million, interest payable semiannually beginning on
       June 15, 2000, redeemable at the Company's option, on or after December
       18, 2002, convertible into shares of common stock at a conversion price
       of $108.18 per share (there are approximately 11.1 million shares of
       common stock reserved for issuance upon conversion);

(b)    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;

(c)    11-1/2% Notes due February 1, 2006, principal amount at maturity of
       $1,050.0 million, interest payable semiannually beginning on August 1,
       2001, redeemable at the Company's option on or after February 1, 2001;

(d)    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;

(e)    9-1/2% Sterling Notes due April 1, 2008, principal amount at maturity of
       (pound sterling) 125.0 million ($186.9 million), interest payable
       semiannually from October 1, 1998, redeemable at the Company's option on
       or after April 1, 2003;

(f)    10-3/4% Sterling Notes due April 1, 2008, principal amount at maturity of
       (pound sterling) 300.0 million ($448.7 million), interest payable
       semiannually beginning on October 1, 2003, redeemable at the Company's
       option on or after April 1, 2003;

(g)    9-3/4% 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;

(h)    9-3/4% Sterling Notes due April 15, 2009, principal amount at maturity of
       (pound sterling) 330.0 million ($493.5 million), interest payable
       semiannually beginning on October 15, 2004, redeemable at the Company's
       option on or after April 15, 2004;

(i)    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;

(j)    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;

(k)    7% Convertible Notes due December 15, 2008, principal amount at maturity
       of $599.3 million, interest payable semiannually from June 15, 1999,
       convertible into shares of common stock at a conversion price of $39.20
       per share, redeemable at the Company's option on or after December 15,
       2001 (there are approximately 15.3 million shares of common stock
       reserved for issuance upon conversion);


                                      F-19
<PAGE>   75
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

8.     LONG-TERM DEBT (CONTINUED)

(l)    Variable Rate Redeemable Guaranteed Notes due January 5, 2002, principal
       amount at maturity of IR pound  60.0 million after redemption of IR pound
       20.0 million ($25.7 million) in 1999 using cash held in escrow, remainder
       redeemed in March 2000 ($73.7 million) using cash held in escrow;

(m)    9-1/4% Euro Notes due November 15, 2006, principal amount at maturity of
       euro 250.0 million ($234.7 million), interest payable semiannually from
       May 15, 2000;

(n)    9-7/8% Euro Notes due November 15, 2009, principal amount at maturity of
       euro 350.0 million ($328.6 million), interest payable semiannually from
       May 15, 2000, redeemable at the Company's option on or after November 15,
       2004;

(o)    11-1/2% Deferred Euro Notes due November 15, 2009, principal amount at
       maturity of euro 210.0 million ($197.1 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, issued in October 2000, principal
       amount at maturity of $500.0 million, interest payable semiannually
       beginning on April 1, 2001, redeemable at the Company's option on or
       after October 1, 2005;

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

(r)    13-1/4% Notes due September 30, 2004, principal amount at maturity of
       $285.1 million, interest payable semiannually from March 31, 2000,
       redeemable at Diamond's option after September 30, 1999;

(s)    11-3/4% Notes due December 15, 2005, principal amount at maturity of
       $531.0 million, interest payable semiannually beginning on June 15, 2001,
       redeemable at Diamond's option on or after December 15, 2000;

(t)    10-3/4% Notes due February 15, 2007, principal amount at maturity of
       $420.5 million, interest payable semiannually beginning on August 15,
       2002, redeemable at Diamond's option on or after December 15, 2002;

(u)    10% Sterling Notes due February 1, 2008, issued by Diamond Holdings plc,
       principal amount at maturity of (pound sterling) 135.0 million ($201.9
       million), interest payable semiannually from August 1, 1998, redeemable
       at Diamond's option on or after February 1, 2003; and

(v)    9-1/8% Notes due February 1, 2008, issued by Diamond Holdings plc,
       principal amount of $110.0 million, interest payable semiannually from
       August 1, 1998, redeemable at Diamond's option on or after February 1,
       2003.


                                      F-20
<PAGE>   76
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

8.     LONG-TERM DEBT (CONTINUED)


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

During 2000, 1999 and 1998, the Company recognized $473.4 million, $451.4
million and $232.7 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:

(w)    In May 2000, NTL Business Limited ("NTL Business") and NTL Communications
       Limited ("NTLCL"), wholly-owned indirect subsidiaries of the Company,
       entered into a (pound sterling)2,500.0 million ($3,738.8 million) credit
       agreement in connection with the ConsumerCo acquisition. As of December
       31, 2000, NTL Business had (pound sterling)2,026.3 million ($3,030.3
       million) and NTLCL had (pound sterling)250.9 million ($375.3 million)
       outstanding under the credit agreement. Interest is payable at least
       every six months at LIBOR plus a margin rate of 2.25% per annum, which is
       subject to adjustment based on the ratio of EBITDA to finance charges of
       the UK Group. The effective rate of interest at December 31, 2000 was
       8.283%. The unused portion of the commitment is available for refinancing
       ConsumerCo indebtedness and for working capital requirements of the UK
       Group. For purposes of this credit agreement, Diamond and subsidiaries
       and NTL Triangle 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.

       NTLCL entered into a (pound sterling)1,300.0 million ($1,944.2 million)
       credit agreement with a group of banks dated May 30, 2000. Pursuant to
       the credit agreement, in connection with the issuance in October 2000 of
       $500.0 million aggregate principal amount of NTL Communications Corp.
       ("NTL Communications") (a wholly-owned subsidiary of NTL Delaware)
       11-7/8% notes, the issuance in January 2001 of euro 200.0 million
       aggregate principal amount of NTL Communications 12-3/8% Euro notes and
       the issuance in February 2001 of euro 100.0 million aggregate principal
       amount of NTL Communications 12-3/8% Euro notes, the commitment was
       reduced by pound sterling255.1 million ($381.4 million). As of December
       31, 2000, there were no amounts borrowed under this agreement. NTLCL and
       other members of the UK Group (as defined above) may utilize the proceeds
       under this credit agreement to finance the working capital requirements
       of the UK Group, provided that in no event shall the proceeds be used for
       a purpose other than to finance the construction, capital expenditure and
       working capital needs of a cable television or telephone or
       telecommunications business, or a related business, in the United Kingdom
       or Ireland. Interest is payable at least every six months at LIBOR plus a
       margin rate of 4.5% per annum. The margin rate shall increase by 0.5% on
       the three month anniversary of the initial advance and by an additional
       0.5% on each subsequent three month anniversary, up to a maximum total
       interest rate of 16% 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.


                                      F-21
<PAGE>   77
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

8.     LONG-TERM DEBT (CONTINUED)

(x)    In March 2000, the Company borrowed CHF 2,700.0 million ($1,666.4
       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 2.5% 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, 2000 was 6.03%. Principal is
       due over six years in quarterly installments beginning on March 31, 2004.
       Cablecom has the option to draw on a revolving loan facility up to an
       additional CHF 1,400.0 million ($864.1 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, 2000, Cablecom had
       borrowed CHF 520.0 million ($320.9 million) under the revolving loan
       facility with an effective rate of interest of 6.02%. The revolving
       facility is available until May 2003. 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.

In September 1999, NTL Triangle repaid at maturity the $21.5 million due under
its notes payable to Comcast U.K. Holdings, Inc.

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

In connection with an acquisition, the Company borrowed an aggregate of (pound
sterling) 475.0 million under a bank credit facility. In November 1998, the
Company received net proceeds of $849.0 million from the issuance of the 11-1/2%
Notes and the 12-3/8% Notes, a substantial portion of which was used to repay
the $799.0 million outstanding under the bank loan. The Company recorded an
extraordinary loss from the early extinguishment of the bank loan of $18.6
million in 1998.

In October 1998, the Company redeemed its 10-7/8% Senior Deferred Coupon Notes
with an accreted value of $211.0 million for cash of $218.0 million. The Company
recorded an extraordinary loss from the early extinguishment of the 10-7/8%
Notes of $12.1 million in 1998, which included approximately $4.8 million of
unamortized deferred financing costs.

In 1998, the Company required consents from the holders of some of its notes to
modify certain indenture provisions in order to proceed with an acquisition. In
October 1998, the Company paid $11.3 million in consent payments and issued
warrants to purchase 1.2 million shares of common stock in lieu of additional
consent payments of $10.1 million.


                                      F-22
<PAGE>   78
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

8.  LONG-TERM DEBT (CONTINUED)

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. At December 31, 2000, restricted net assets were approximately $7,623.8
million.

Long-term debt repayments are due as follows (in millions):

<TABLE>
<CAPTION>
                 Year ending December 31:
<S>                                                       <C>
                    2001                                      $12.6
                    2002                                       10.8
                    2003                                        8.4
                    2004                                      500.3
                    2005                                    4,219.9
                    Thereafter                             11,046.8
                                                          ---------
                                                          $15,798.8
                                                          =========
</TABLE>

In January and February 2001, NTL Communications issued euro 300.0 million
($281.6 million) aggregate principal amount of 12-3/8% Senior Euro Notes due
February 1, 2008. NTL Communications received proceeds of approximately $275.3
million after underwriters' discount and commissions and other fees. Interest is
payable semiannually in cash at a rate of 12-3/8% per annum beginning on August
1, 2001. These notes may not be redeemed by NTL Communications except in limited
circumstances.

On February 21, 2001, as required by the NTL Business and NTLCL credit
agreement, NTL Communications completed a transaction whereby it acquired the
entire issued share capital of NTL (CWC Holdings) Limited (the entity that owns
ConsumerCo) from NTL Incorporated and the entire issued share capital of NTL
Business from NTL Delaware in exchange for shares of its common stock. As a
result of this transaction, ConsumerCo and NTL Business became subsidiaries of
NTL Communications.

9.    REDEEMABLE PREFERRED STOCK

In March 2000, the Company received $1,850.0 million in cash from France Telecom
and a group of commercial banks in exchange for 1.9 million shares of its
redeemable 5% Cumulative Preferred Stock (the "5% Redeemable Preferred Stock").
The holders of the 5% Redeemable Preferred Stock other than any commercial banks
or their affiliates (a "Qualified Holder") may at any time after September 2000
elect, subject to certain conditions, for the 5% Redeemable Preferred Stock to
be exchanged for up to a 50% interest in a new company which will own certain or
all of the Company's broadband communications, broadcast and cable television
interests in Continental Europe outside of France. Under certain circumstances,
at the Company's option, any portion of the Company's obligation that may not be
satisfied by the exchange may be satisfied in a security convertible into the
Company's common stock or cash. Dividends on the 5% Redeemable Preferred Stock
are cumulative on a quarterly basis and are payable in additional shares of 5%
Redeemable Preferred Stock in March 2002. As of December 31, 2000, the Company
has accrued $71.3 million for dividends. The 5% Redeemable Preferred Stock has a
liquidation right of $1,000 per share plus accrued and unpaid dividends. The 5%
Redeemable Preferred Stock may be redeemed for cash in March 2002 at the option
of a Qualified Holder.


                                      F-23
<PAGE>   79
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

9.  REDEEMABLE PREFERRED STOCK (CONTINUED)

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, 2000,
the Company has accrued $64.4 million for dividends and has issued approximately
62,000 shares for $61.7 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.

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

<TABLE>
<CAPTION>
                                                                        13%                 5%
                                                                      ----------------------------
<S>                                                                   <C>                <C>
Balance, December 31, 1997                                            110,000                    -
Issued for dividends                                                   15,000                    -
                                                                      ----------------------------
Balance, December 31, 1998                                            125,000                    -
Issued for dividends                                                   17,000                    -
                                                                      ----------------------------
Balance, December 31, 1999                                            142,000                    -
Issued for cash                                                             -            1,850,000
Issued for dividends                                                   20,000                    -
                                                                      ----------------------------
Balance, December 31, 2000                                            162,000            1,850,000
                                                                      ============================
</TABLE>


                                      F-24
<PAGE>   80
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

10.   OTHER CHARGES INCLUDING RESTRUCTURING CHARGES

Other charges of $92.7 million in 2000 include restructuring costs of $65.9
million and information technology integration costs of $26.8 million.
Restructuring costs relate to the Company's announcement in November 2000 of its
completion of a consolidation review. Based on a comprehensive review of the
combined company following the acquisition of ConsumerCo and the integration of
several other acquired businesses, the Company identified significant efficiency
improvements and cost savings. The restructuring provision includes employee
severance and related costs of $47.9 million for approximately 2,300 employees
to be terminated and lease exit costs of $18.0 million. As of December 31, 2000,
approximately 360 of the employees had been terminated. None of the provision
had been utilized through December 31, 2000. The information technology
integration costs of $26.8 million were incurred for the integration of acquired
companies' information technology.

Other charges of $16.2 million in 1999 were incurred for the cancellation of
certain contracts. Other charges of $4.2 million reversed in 1998 were the
result of changes to a restructuring reserve that was recorded in 1997.

11.   INCOME TAXES

The benefit for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                      2000            1999            1998
                                                   ---------        ---------     ---------
                                                                 (in millions)
<S>                                                <C>             <C>             <C>
Current:
   Federal                                         $  --           $   1.0         $  --
   State and local                                     0.2             1.0            --
   Foreign                                             0.9            --              --
                                                   ----------------------------------------
Total current                                          1.1             2.0            --
                                                   ----------------------------------------
Deferred:
   Federal                                            --              --              --
   State and local                                    --              --              --
   Foreign                                          (112.1)          (37.3)           (3.3)
                                                   ----------------------------------------
Total deferred                                      (112.1)          (37.3)           (3.3)
                                                   ----------------------------------------
                                                   $(111.0)        $ (35.3)        $  (3.3)
                                                   ========================================
</TABLE>


                                      F-25
<PAGE>   81
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

11. INCOME TAXES (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:

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                                2000             1999
                                                                ----             ----
                                                                   (in millions)
<S>                                                         <C>              <C>
Deferred tax liabilities:
   Fixed assets                                             $  100.3         $   66.5
   Intangibles                                                 113.3            107.0
   Depreciation and amortization                               288.8             --
                                                            -------------------------
Total deferred tax liabilities                                 502.4            173.5
Deferred tax assets:
   Net operating losses                                      1,582.4            417.2
   Net deferred interest expense                               198.5            150.1
   Depreciation and amortization                                --              269.9
   Inventory                                                    16.4             --
   Purchase accounting liabilities                             158.5             --
   Other                                                        34.0             15.9
                                                            -------------------------
Total deferred tax assets                                    1,989.8            853.1
Valuation allowance for deferred tax assets                 (1,692.8)          (757.3)
                                                            -------------------------
Net deferred tax assets                                        297.0             95.8
                                                            -------------------------
Net deferred tax liabilities                                $  205.4         $   77.7
                                                            =========================
</TABLE>

At December 31, 2000, 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, 2000, the valuation allowance
includes approximately $565.0 million, which, if realized, would be accounted
for as a reduction to goodwill or an increase in additional paid-in capital.

At December 31, 2000, the Company had net operating loss carryforwards of
approximately $700.0 million for U.S. federal income tax purposes that expire in
varying amounts commencing in 2009. This excludes net operating loss
carryforwards of companies that are resident in both the U.S. and the United
Kingdom. The Company also has United Kingdom net operating loss carryforwards of
approximately $4,000.0 million that have no expiration date. Pursuant to United
Kingdom law, these net operating losses are only available to offset income of
the separate entity that generated the loss. A portion of the United Kingdom net
operating loss carryforward relates to dual resident companies, of which the
U.S. net operating loss carryforward amount is approximately $1,000.0 million.

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 for
the years 1996 and 1997. 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.


                                      F-26
<PAGE>   82
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

11. INCOME TAXES (CONTINUED)

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

<TABLE>
<CAPTION>
                                                                                          YEAR ENDED DECEMBER 31,
                                                                                   2000             1999            1998
                                                                                   ----             ----            ----
                                                                                              (in millions)
<S>                                                                            <C>              <C>             <C>
(Benefit) at federal statutory rate (35%)                                      $(1,076.1)       $ (269.9)       $ (188.3)
Add:
   Foreign losses with no benefit                                                 815.7            110.2            87.9
   U.S. losses with no benefit                                                    149.3            123.7            97.1
   State and local income tax, net of federal benefit                               0.1              0.7            --
                                                                               ------------------------------------------
                                                                               $ (111.0)        $  (35.3)       $   (3.3)
                                                                               ==========================================
</TABLE>

12.    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
   Variable Rate Notes 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. The fair value of the 5%
   redeemable preferred stock is estimated using discounted cash flow analysis
   based on the company's current borrowing rate for similar types of
   arrangements.


                                      F-27
<PAGE>   83
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

12. FINANCIAL INSTRUMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
                                                             DECEMBER 31, 2000                     DECEMBER 31, 1999
                                                         ------------------------           ------------------------------
                                                          CARRYING                          CARRYING
                                                           AMOUNT      FAIR VALUE             AMOUNT           FAIR VALUE
                                                         ------------------------           ------------------------------
                                                                                 (in millions)
<S>                                                       <C>            <C>                <C>                 <C>
    Cash and cash equivalents                              $579.4         $579.4            $2,597.2            $2,597.2
    Long-term debt:
       5-3/4% Convertible Notes                           1,200.0          582.0             1,200.0             1,290.0
       Credit Agreement                                   3,405.6        3,405.6                 -                   -
       Term Loan and Revolving Facilities                 1,987.3        1,987.3                 -                   -
       12-3/4% Notes                                        277.8          255.6               268.1               278.5
       11-1/2% Notes                                      1,040.5          913.5               930.4               950.3
       10% Notes                                            400.0          348.0               400.0               414.0
       9-1/2% Sterling Senior Notes                         186.5          154.2               201.4               196.9
       10-3/4% Sterling Notes                               353.6          242.3               343.7               327.2
       9-3/4% Notes                                       1,048.5          715.0               952.8               913.3
       9-3/4% Sterling Notes                                360.8          214.7               354.4               313.3
       11-1/2% Notes                                        625.0          556.3               625.0               682.8
       12-3/8% Notes                                        323.6          252.0               287.0               319.5
       7% Convertible Notes                                 599.3          470.5               599.3             1,582.2
       Variable Rate Notes                                    -              -                  76.8                76.8
       9-1/4% Euro Notes                                    234.7          207.7               252.3               254.8
       9-7/8% Euro Notes                                    328.6          269.4               353.2               356.8
       11-1/2% Euro Deferred Notes                          127.9           99.6               123.1               125.0
       11-7/8% Senior Notes                                 489.6          445.0                 -                   -
       11.2% Debentures                                     517.3          439.7               467.3               486.3
       13-1/4% Notes                                        285.1          270.8               285.1               305.4
       11-3/4% Notes                                        531.0          467.3               476.2               499.1
       10-3/4% Notes                                        373.9          281.7               336.9               340.6
       10% Sterling Notes                                   201.9          161.5               218.1               218.1
       9-1/8% Notes                                         110.0           89.7               110.0               108.9
    Redeemable Preferred Stock:
        13% Redeemable Preferred Stock                      161.9          121.3               141.8               154.4
        5% Preferred Stock                                1,921.3        1,781.8                 -                   -
</TABLE>

The Company has derivative financial instruments for purposes other than trading
as follows. In 2000, the Company entered into 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 the floating interest rates on
the Cablecom bank credit facility. The notional amount of the cross currency
swaps was (pound sterling) 35.0 million at December 31, 2000. These swaps have
payment dates in 2001 that match interest payment dates for a portion of the NTL
Communications notes. The fair value of the swaps at December 31, 2000 was
$(2.2) million based on quoted market prices for comparable instruments. The
notional amount of the zero cost collars was CHF 1,200.0 million at December 31,
2000. These collars have semiannual payment dates and mature in September 2004.
The fair value of the collars at December 31, 2000 was $(6.8) million based on
quoted market prices for comparable instruments.


                                      F-28
<PAGE>   84
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

13.    RELATED PARTY TRANSACTIONS

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 1998, the Company charged CCPR, CCII and CoreComm Limited ("CoreComm") (which
was formed in 1998 and has certain common officers and directors with the
Company) $1.1 million, $1.0 million and $0.3 million, respectively, for direct
costs where identifiable and a fixed percentage of its corporate overhead. In
the fourth quarter of 1999, CoreComm began charging the Company a percentage of
its office rent and supplies expense. 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 a resulting termination of
services. In 2000, the Company charged CoreComm $0.9 million 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
2000, 1999 and 1998. 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 $5.9 million, $4.6 million and $2.9 million in 2000,
1999 and 1998, respectively, for these services. In addition, CoreComm billed
the Company $6.7 million in October 2000 for services to be rendered from
January to September 2001. 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. In November 2000, CoreComm billed the
Company $9.1 million primarily for usage of the network in 2001.

At December 31, 2000 and 1999, the Company had a payable to CoreComm of $17.1
million and a receivable from CoreComm of $0.5 million, respectively.

14.    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.


                                      F-29

<PAGE>   85
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

14.  SHAREHOLDERS' EQUITY (CONTINUED)

SALES OF PREFERRED STOCK, COMMON STOCK AND WARRANTS

In May 2000, in connection with the ConsumerCo acquisition, France Telecom paid
L1,555.6 million ($2,327.6 million) for 42.2 million shares of the Company's
common stock and L1,244.4 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. The Company issued 108,000 shares of 5% Preferred
Stock for dividend payments of $108.1 million through December 31, 2000.


                                      F-30
<PAGE>   86
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

14.  SHAREHOLDERS' EQUITY (CONTINUED)

At December 31, 2000, the Company's preferred stock would have been redeemable
or convertible into an aggregate of 35.7 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:

<TABLE>
<CAPTION>
                                     Convertible         9.9%              9.9%
                                       Series A        Series A          Series B            5.25%              5%
                                     --------------------------------------------------------------------------------
<S>                                  <C>               <C>               <C>               <C>              <C>
Balance, December 31, 1997                780              --                --                --                --
Conversion into common stock             (780)             --                --                --                --
Issued for acquisitions                  --             125,000            52,000              --                --
                                     --------------------------------------------------------------------------------
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
                                     ================================================================================
</TABLE>

WARRANTS

The Company has the following warrants outstanding as of December 31, 2000: (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.


                                      F-31
<PAGE>   87
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

14.  SHAREHOLDERS' EQUITY (CONTINUED)

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.

STOCK OPTIONS

There are 3,381,000 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 31,478,000 shares available for
issuance at December 31, 2000. The exercise price of a NQSO shall be determined
by the Compensation and Option Committee. Options are generally exercisable
ratably over five to ten years while the optionee remains an employee of the
Company. Options will expire ten years after the date of the grant.

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. This change did not affect the
exercise price of options granted to the Chairman of the Board, the Chief
Executive Officer and the Company's Directors. In accordance with APB No. 25 and
related interpretations, 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.

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 2000, 1999 and 1998: risk-free interest rates of 5.30%, 6.81%
and 5.02%, respectively, dividend yield of 0%, volatility factor of the expected
market price of the Company's common stock of .385, .336 and .331, 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


                                      F-32
<PAGE>   88
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

14.    SHAREHOLDERS' EQUITY (CONTINUED)

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. Following is the
Company's pro forma information:

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                                   2000             1999             1998
                                                                   ----             ----             ----
                                                                    (in millions, except per share data)
<S>                                                            <C>                 <C>                <C>
Pro forma net (loss)                                           $(3,220.3)          $(822.7)           $(580.7)
Basic and diluted pro forma net (loss) per share                 $(15.73)          $ (7.51)           $ (9.31)
</TABLE>

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


                                      F-33
<PAGE>   89
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

14.  SHAREHOLDERS' EQUITY (CONTINUED)

<TABLE>
<CAPTION>
                                              2000                            1999                            1998
                                   ------------------------------------------------------------------------------------------------


                                     NUMBER OF   WEIGHTED-AVERAGE    NUMBER OF   WEIGHTED-AVERAGE     NUMBER OF    WEIGHTED-AVERAGE
                                      OPTIONS    EXERCISE PRICE       OPTIONS    EXERCISE PRICE        OPTIONS     EXERCISE PRICE
                                   ------------------------------------------------------------------------------------------------
                                   (in millions)                   (in millions)                    (in millions)
<S>                                <C>            <C>              <C>            <C>               <C>            <C>
Outstanding-beginning of year          29.2           $24.60           25.7           $17.29           12.7            $10.23
Granted                                34.8            54.90            6.4            50.35           13.9             24.06
Exercised                              (2.1)           17.13           (2.6)           15.95           (0.5)            13.59
Forfeited                              (0.5)           83.31           (0.3)           24.22           (0.4)            29.74
                                      -----                           -----                           -----
Outstanding-end of year                61.4           $41.52           29.2           $24.60           25.7            $17.29
                                      =====                           =====                           =====
Exercisable at end of year             16.3           $21.82           12.2           $14.97           11.0            $10.59
                                      =====                           =====                           =====
</TABLE>

Weighted-average fair value of options, calculated using the Black-Scholes
option pricing model, granted during 2000, 1999 and 1998 is $32.19, $30.97 and
$13.13 respectively.

The following table summarizes the status of the stock options outstanding and
exercisable at December 31, 2000:


<TABLE>
<CAPTION>
                                            STOCK OPTIONS OUTSTANDING               STOCK OPTIONS EXERCISABLE
                                 --------------------------------------------------------------------------------
                                                  WEIGHTED-        WEIGHTED-                          WEIGHTED-
                                                  REMAINING         AVERAGE                            AVERAGE
        RANGE OF              NUMBER             CONTRACTUAL        EXERCISE         NUMBER            EXERCISE
     EXERCISE PRICES        OF OPTIONS              LIFE             PRICE         OF OPTIONS           PRICE
-----------------------------------------------------------------------------------------------------------------
                           (in millions)                                         (in millions)
<S>                         <C>                  <C>               <C>             <C>                <C>
     $0.12 to $9.36             4.8               2.2 Years        $   5.230          4.8               $   5.230
     $9.72 to $18.40            4.0               5.2 Years         $ 15.012          4.0                $ 15.007
    $19.86 to $27.84           11.9               7.0 Years         $ 23.354          3.7                $ 23.173
    $28.06 to $35.64            0.6               7.9 Years         $ 30.937          0.3                $ 30.946
    $36.12 to $40.19            0.8               9.8 Years         $ 38.756          0.2                $ 38.716
    $42.44 to $47.44           15.8               9.7 Years         $ 44.448          1.2                $ 44.391
    $48.38 to $53.76            5.2               8.2 Years         $ 50.364          1.6                $ 50.383
    $57.60 to $63.63           17.7               9.4 Years         $ 63.421          0.3                $ 59.485
    $68.20 to $75.56            0.2               9.0 Years         $ 75.413          0.1                $ 75.387
    $91.13 to $101.41           0.4               9.2 Years         $ 93.713          0.1                $ 93.713
------------------------------------------                        -----------------------------------------------
    Total                      61.4                                                  16.3
==========================================                        ===============================================
</TABLE>

As of December 31, 2000, the Company had 126.6 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.


                                      F-34
<PAGE>   90
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

15.  EMPLOYEE BENEFIT PLANS

Certain subsidiaries of the Company operate defined benefit pension plans in the
United Kingdom 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 United Kingdom and Switzerland.

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                                            2000            1999
                                                                            ----            ----
                                                                                (in millions)
<S>                                                                       <C>             <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year                                   $  197.1        $  213.4
Acquisition                                                                  116.9            10.7
Service cost                                                                  16.7            12.0
Interest cost                                                                 16.8            12.0
Actuarial gains                                                               (3.4)          (40.9)
Benefits paid                                                                 (8.3)           (5.2)
Foreign currency exchange rate changes                                       (11.7)           (4.9)
                                                                          ------------------------
Benefit obligation at end of year                                         $  324.1        $  197.1
                                                                          ========================
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year                            $  278.4        $  225.3
Acquisition                                                                  133.2            10.1
Actual return on plan assets                                                  15.8            43.1
Company contributions                                                         12.5             7.6
Plan participants' contributions                                               6.2             2.9
Benefits paid                                                                 (8.3)           (5.3)
Foreign currency exchange rate changes                                       (17.6)           (5.3)
                                                                          ------------------------
Fair value of plan assets at end of year                                  $  420.2        $  278.4
                                                                          ========================
Funded status of the plan                                                 $   96.1        $   81.3
Unrecognized net actuarial gains                                             (79.2)          (89.3)
Unrecognized transition obligation                                             6.2             8.1
                                                                          ------------------------
Prepaid benefit cost                                                      $   23.1        $    0.1
                                                                          ========================
Actuarial assumptions:
   Weighted average discount rate                                         4.50% - 6.00%       6.25%
   Weighted average rate of compensation increase                         2.00% - 4.25%       4.50%
   Expected long-term rate of return on plan assets                       5.50% - 7.75%       8.00%
</TABLE>


                                      F-35
<PAGE>   91
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

    15.  EMPLOYEE BENEFIT PLANS (CONTINUED)

 The components of net pension costs are as follows:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                               2000            1999            1998
                                                               ----            ----            ----
                                                                          (in millions)
<S>                                                         <C>             <C>             <C>
Service cost                                                $  16.7         $  12.0         $  13.4
Interest cost                                                  16.8            12.0            14.7
Actual return on plan assets                                  (15.7)          (43.1)          (24.2)
Net amortization and deferral                                 (19.4)           26.8             8.3
                                                            ---------------------------------------
                                                            $  (1.6)        $   7.7         $  12.2
                                                            =======================================
</TABLE>

16.  LEASES

Leases for buildings, office space and equipment extend through 2031. Total
rental expense for the years ended December 31, 2000, 1999 and 1998 under
operating leases was $56.2 million, $36.7 million and $29.4 million,
respectively.

Future minimum lease payments under noncancellable operating leases as of
December 31, 2000 are as follows (in millions):

<TABLE>
<CAPTION>
                 Year ending December 31:
<S>                                                      <C>
                    2001                                 $65.5
                    2002                                  61.1
                    2003                                  58.3
                    2004                                  52.0
                    2005                                  47.1
                    Thereafter                           225.2
                                                        ------
                                                        $509.2
                                                        ======
</TABLE>

17.    COMMITMENTS AND CONTINGENT LIABILITIES

At December 31, 2000, the Company was committed to pay approximately $1,340.0
million for equipment and services, which includes approximately $950.0 million
for certain operations and maintenance contracts through 2008.

The Company had certain exclusive local delivery operator licenses for Northern
Ireland and other franchise areas in the United Kingdom. Pursuant to these
licenses, various subsidiaries of the Company were required to make monthly cash
payments to the Independent Television Commission ("ITC") during the 15-year
license terms. Upon a request by the Company in 1999, the ITC converted all of
the Company's fee bearing exclusive licenses to non-exclusive licenses by the
end of 1999. In 1999 and 1998, the Company paid $30.1 million and $25.0 million,
respectively, 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.


                                      F-36
<PAGE>   92
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

17.  COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

A wholly-owned indirect subsidiary of the Company, Premium TV Limited, has
entered into media partnerships with various United Kingdom football clubs
whereby Premium TV Limited will receive certain marketing and sponsorship
rights. Premium TV Limited will provide loan facilities to the clubs, repayable
through the issue of shares in the football clubs, as well as provide funding to
joint ventures with the clubs. At December 31, 2000, the aggregate commitment
was (pound sterling) 56.8 million ($84.9 million). In addition, Premium TV
Limited expects to pay fees of up to (pound sterling) 59.0 million ($88.2
million) over five years for the right to enter into a joint venture with the
Football League to set-up an Internet portal for all 72 Football League clubs
who wish to participate.

In August 2000, the Company announced that it had signed an agreement in
partnership with Morgan Stanley Dean Witter Private Equity to buy France
Telecom's 49.9% stake in Noos, the leading broadband company in France offering
cable television, telephony and Internet services. Pursuant to the agreement,
the Company will acquire 27% of Noos for approximately $627.0 million. The
Company will issue 12-month redeemable preferred stock to France Telecom for 80%
of the $627.0 million consideration and 6-year redeemable preferred stock for
the remaining 20%.

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.

18.  INDUSTRY SEGMENTS

The Company has four reportable segments: Broadcast Services, Consumer Services,
Business Services, and Shared Services. The Broadcast Services segment operates
in the United Kingdom and 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 United Kingdom,
Ireland, France and Switzerland. The Business Services segment operates
primarily in the United Kingdom 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. In
1998, Shared Services included OCOM Corporation, a subsidiary that operated long
distance and microwave transmission businesses in the United States until June
1998.

In 2000, components of the National Telecoms segment became part of the
Broadcast Services segment, and the remainder of National Telecoms was renamed
Business Services. The rental of antenna space on the Company's owned and leased
towers and sites and associated services, and satellite and media services
became components of Broadcast Services. The 1999 and 1998 segment information
has been reclassified to conform to the 2000 segments. Also, certain goodwill
and related amortization was reclassified to Broadcast Services from Shared
Services in all of the periods presented.


                                      F-37
<PAGE>   93
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

18.  INDUSTRY SEGMENTS (CONTINUED)

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
results of operations data utilized in financial measurements are revenues and
EBITDA, which is earnings before interest, taxes, depreciation and amortization,
corporate expenses, franchise fees, other charges, other gains, foreign currency
transactions gains (losses) and extraordinary items. The Company's primary
measure of profit or loss is EBITDA. 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.

<TABLE>
<CAPTION>
                                                 BROADCAST       CONSUMER         BUSINESS          SHARED           TOTAL
                                                 ---------       --------         --------          ------           -----
                                                                                 (in millions)
<S>                                              <C>             <C>              <C>              <C>             <C>
YEAR ENDED DECEMBER 31, 2000
Revenues                                           $318.8        $1,819.8          $702.2          $    --         $2,840.8
Depreciation and amortization                        81.4         1,455.7           153.0            432.7          2,122.8
EBITDA (1)                                          151.9           447.6           226.2           (481.6)           344.1
Expenditures for long-lived assets                   91.5         1,469.4           637.8            732.3          2,931.0
Total assets (2)                                  1,051.1        22,339.8         1,525.5          3,467.3         28,383.7
YEAR ENDED DECEMBER 31, 1999
Revenues                                           $297.3          $834.3          $452.5             $-           $1,584.1
Depreciation and amortization                        69.8           528.3            58.8            134.4            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 (3)                                  1,127.6         6,106.5           805.9          4,171.6         12,211.6
YEAR ENDED DECEMBER 31, 1998
Revenues                                           $231.3          $355.6          $157.7             $2.4           $747.0
Depreciation and amortization                        41.7           143.5            17.8             63.1            266.1
EBITDA (1)                                          115.2            67.6            12.3           (119.7)            75.4
Expenditures for long-lived assets                  165.9           413.9           220.4             67.1            867.3
Total assets                                        645.8         3,100.5           406.1          2,041.7          6,194.1
</TABLE>

(1)  Represents earnings before interest, taxes, depreciation and amortization,
     franchise fees, other charges, corporate expenses, other gains, foreign
     currency transaction (losses) gains and extraordinary items.

(2)  At December 31, 2000, shared assets included $487.1 million of cash, cash
     equivalents and marketable securities, $1,815.4 million of goodwill and
     $1,164.8 million of other assets.

(3)  At December 31, 1999, shared assets included $2,669.4 million of cash, cash
     equivalents and marketable securities, $925.0 million of goodwill and
     $577.2 million in other assets.


                                      F-38
<PAGE>   94
                       NTL Incorporated and Subsidiaries
             Notes to Consolidated Financial Statements (continued)

    18.  INDUSTRY SEGMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
                                                                                   YEAR ENDED DECEMBER 31,
                                                                             2000             1999            1998
                                                                             ----             ----            ----
                                                                                          (in millions)
<S>                                                                       <C>              <C>             <C>
Segment Combined EBITDA                                                   $  344.1         $  210.9        $   75.4

(Add) Deduct:
 Franchise fees                                                               --               16.5            25.0
 Other charges                                                                92.7             16.2            (4.2)
 Corporate expenses                                                           47.5             29.4            17.1
 Depreciation and amortization                                             2,122.8            791.3           266.1
Interest income and other, net                                                (1.6)           (49.4)          (46.0)
Interest expense                                                           1,036.8            680.7           328.8
Other gains                                                                   --             (493.1)           --
Foreign currency transaction losses (gains)                                  120.6            (12.7)           (4.2)
                                                                         -------------------------------------------
                                                                           3,418.8            978.9           582.6
                                                                         ------------------------------------------
 Loss before income taxes and extraordinary item                         $(3,074.7)        $ (768.0)       $ (507.2)
                                                                         ===========================================
</TABLE>

19.  GEOGRAPHIC INFORMATION

<TABLE>
<CAPTION>
                        United States  United Kingdom   Switzerland         Other         Total
                        -------------  --------------   -----------         -----         -----
                                                                  (in millions)
<S>                     <C>            <C>              <C>              <C>            <C>
2000
Revenues                 $    --        $ 2,434.8        $   277.3       $   128.7      $ 2,840.8
Long-lived assets             26.7       21,751.7          3,839.8           965.0       26,583.2

1999
Revenues                 $    --        $ 1,508.2        $    --         $    75.9      $ 1,584.1
Long-lived assets              1.6        8,227.6             --             663.8        8,893.0

1998
Revenues                 $     2.4      $   744.6        $    --         $    --        $   747.0
Long-lived assets              1.2        4,988.4             --              --          4,989.6
</TABLE>


                                      F-39
<PAGE>   95

                                NTL Incorporated

          Schedule I -- Condensed Financial Information of Registrant

                            Condensed Balance Sheet

                               December 31, 2000
                                 (in millions)

<TABLE>
<S>                                                           <C>
ASSETS
Current assets:
   Cash and cash equivalents                                      $69.2
   Marketable securities                                           60.0
   Other                                                            0.9
                                                              ---------
Total current assets                                              130.1

Investments in and loans to subsidiaries                       10,326.9
                                                              ---------
Total assets                                                  $10,457.0
                                                              ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities                                                $6.4
Redeemable preferred stock                                      2,083.2

Shareholders' equity:
   Series preferred stock                                           -
   Common stock                                                     2.7
   Additional paid-in capital                                  13,764.7
   Accumulated other comprehensive (loss)                        (448.9)
   (Deficit)                                                   (4,951.1)
                                                              ---------
                                                                8,367.4
                                                              ---------
Total liabilities and shareholders' equity                    $10,457.0
                                                              =========
</TABLE>

See accompanying notes.


                                      F-40
<PAGE>   96

                                NTL Incorporated


    Schedule I -- Condensed Financial Information of Registrant (continued)

                       Condensed Statement of Operations

             For the Period from May 18, 2000 to December 31, 2000
                                 (in millions)


<TABLE>
<S>                                                                             <C>
COSTS AND EXPENSES
Corporate expenses                                                                   $9.4
                                                                                ---------
Operating (loss)                                                                     (9.4)

OTHER INCOME (EXPENSE)
Interest income and other, net                                                       10.9
Foreign currency transaction gains                                                    1.9
                                                                                ---------
Income before income taxes and equity in net (loss) of subsidiaries                   3.4
Income tax expense                                                                   (0.2)
                                                                                ---------
Income before equity in net (loss) of subsidiaries                                    3.2
Equity in net (loss) of subsidiaries                                             (2,966.9)
                                                                                ---------
Net (loss)                                                                       (2,963.7)
Preferred stock dividend                                                           (194.0)
                                                                                ---------
Net (loss) available to common shareholders                                     $(3,157.7)
                                                                                =========
</TABLE>

See accompanying notes.


                                      F-41
<PAGE>   97

                                NTL Incorporated

    Schedule I -- Condensed Financial Information of Registrant (continued)

                       Condensed Statement of Cash Flows

             For the Period from May 18, 2000 to December 31, 2000
                                 (in millions)

<TABLE>
<S>                                                                                     <C>
Net cash provided by operating activities                                                   $0.7

INVESTING ACTIVITIES
Purchase of marketable securities                                                          (96.9)
Proceeds from sales of marketable securities                                               202.6
Contribution to subsidiary                                                                  (4.3)
Increase in investments in and loans to subsidiaries                                    (4,229.3)
                                                                                        --------
Net cash (used in) investing activities                                                 (4,127.9)

FINANCING ACTIVITIES
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                                                   2,327.6
                                                                                        --------
Net cash provided by financing activities                                                4,196.4
Increase in cash and cash equivalents                                                       69.2
Cash and cash equivalents at beginning of period                                              --
                                                                                        --------
Cash and cash equivalents at end of period                                                 $69.2
                                                                                        ========
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Accretion of dividends and discount on preferred stock                                     $78.1
</TABLE>


See accompanying notes.


                                      F-42
<PAGE>   98
                                NTL Incorporated

            Schedule I-Condensed Financial Information of 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 5% Redeemable Preferred Stock (the "5% Redeemable Preferred
Stock") are cumulative on a quarterly basis and are payable in additional shares
of 5% Redeemable Preferred Stock in March 2002. The holders of the 5% Redeemable
Preferred Stock other than any commercial banks or affiliates (a "Qualified
Holder") may at any time after September 2000 elect, subject to certain
conditions, for the 5% Redeemable Preferred Stock to be exchanged for up to a
50% interest in a new company which will own certain or all of the Company's
broadband communications, broadcast and cable television interests in
Continental Europe outside of France. Under certain circumstances, at the
Company's option, any portion of the Company's obligation that may not be
satisfied by the exchange may be satisfied in a security convertible into the
Company's common stock or cash. The 5% Redeemable Preferred Stock has a
liquidation right of $1,000 per share plus accrued and unpaid dividends. The 5%
Redeemable Preferred Stock may be redeemed for cash in March 2002 at the option
of a Qualified Holder.

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.


                                      F-43
<PAGE>   99
                                NTL Incorporated

            Schedule I-Condensed Financial Information of Registrant
               Notes to Condensed Financial Statements(continued)


4.     LEASES

Leases for office space extend through 2003. Total rental expense for the period
from May 18, 2000 to December 31, 2000 under operating leases was $0.1 million.

Future minimum lease payments under noncancellable operating leases as of
December 31, 2000 are $0.1 million, $0.1 million and $0.1 million for the years
ending December 31, 2001, 2002 and 2003, respectively.

5.  OTHER

No cash dividends were paid to the registrant by subsidiaries in 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.


                                      F-44
<PAGE>   100

                        NTL Incorporated and Subsidiaries

                Schedule II -- Valuation and Qualifying Accounts


<TABLE>
<CAPTION>
                 COL. A                         COL. B                    COL. C                     COL. D              COL. E
---------------------------------------------------------------------------------------------------------------------------------
                                                                        ADDITIONS
                                                                    (1)             (2)
                                              BALANCE AT        CHARGED TO      CHARGED TO        (DEDUCTIONS)/          BALANCE
                                             BEGINNING OF          COSTS           OTHER            ADDITIONS            AT END
               DESCRIPTION                      PERIOD              AND         ACCOUNTS --         DESCRIBE            OF PERIOD
                                                                 EXPENSES        DESCRIBE
<S>                                          <C>                <C>             <C>               <C>                   <C>
Year ended December 31, 2000
   Allowance for doubtful accounts              $85.6             $98.9           $  -             $(43.1)(a)            $141.4
                                             ====================================================================================
Year ended December 31, 1999
   Allowance for doubtful accounts              $38.5             $46.2           $  -               $0.9 (b)             $85.6
                                             ====================================================================================
Year ended December 31, 1998
   Allowance for doubtful accounts               $8.1             $27.3           $  -               $3.1 (c)             $38.5
                                             ====================================================================================
</TABLE>


(a)   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.

(b)   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.

(c)   Uncollectible accounts written-off, net of recoveries of $9.2 million,
      offset by $12.2 million allowance for doubtful accounts as of acquisition
      dates of purchased subsidiaries and $0.1 million foreign currency
      translation adjustments.


                                       F-45