##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002

Commission file number 0-30673

NTL EUROPE, INC.

(On January 10, 2003, the name of the Registrant was changed from NTL Incorporated to NTL Europe, Inc.)
(Exact name of Registrant as specified in its charter)


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

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

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
10% Fixed Redeemable Preferred Stock, Series A, par value $.01 per share
Stockholder Rights accompanying each share of Common Stock

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES
þ NOo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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. o

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

On January 10, 2003, the Company consummated a plan of reorganization, pursuant
to which the Company, then known as NTL Incorporated (Old NTL), was separated
into two independent companies. Until then, Old NTL was one company with
common stock that traded on the New York Stock Exchange until March 28, 2002,
and then on the OTC Bulletin Board. Upon consummation of the plan of
reorganization, Old NTLs securities, including its common stock, were
cancelled and the Company issued new common stock and preferred stock. The
Companys new common stock and preferred stock initially traded on the OTC Bulletin
Board under the symbols NTEU.OB and
NTEP.OB, respectively, but, due to the late filing of
this Form 10-K, have been changed to NTEUE.PK and NTEPE.OB, respectively. The aggregate
market value of the voting and non-voting common equity of Old NTL held by
non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
June 28, 2002, was $3,630,377. Pursuant to the reorganization plan, all of the
common equity of Old NTL was cancelled and, therefore, this amount is not
indicative of the current value of the Companys common stock.

Number of shares outstanding at May 21, 2003:



| |                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | 19,657,433 shares of Common Stock, par value $.01 per share
6,862,193 shares of 10% Fixed Redeemable Preferred Stock, Series A, par value
$.01 per share

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
by a court.
YES o NOþ

Documents Incorporated by Reference: None





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TABLE OF CONTENTS



|                                                 |                                                                                                         |  |  |  |  |  |  | 
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                          
|                                                 | Item 1. Business                                                                                       
|                                                 | Item 2. Properties                                                                                     
|                                                 | Item 3. Legal Proceedings                                                                              
|                                                 | Item 4. Submission of Matters to a Vote of Security Holders                                            
|PART II                                         
|                                                 | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                          
|                                                 | Item 6. Selected Financial Data                                                                        
|                                                 | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations          
|                                                 | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                    
|                                                 | Item 8. Financial Statements and Supplementary Data                                                    
|                                                 | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           
|PART III                                        
|                                                 | Item 10.Directors and Executive Officers of the Registrant                                             
|                                                 | Item 11. Executive Compensation                                                                        
|                                                 | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|                                                 | Item. 13. Certain Relationships and Related Transactions                                               
|                                                 | Item 14. Controls and Procedures                                                                       
|PART IV                                         
|                                                 | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                               
|SIGNATURES                                      
|EXHIBIT INDEX                                   
|AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT
|ENGAGEMENT LETTER                               
|SUBSIDIARIES                                    
|CERTIFICATE OF CHIEF EXECUTIVE OFFICER          
|CERTIFICATE OF CHIEF FINANCIAL OFFICER          
|CORPORATE GOVERNANCE GUIDELINES                 
|CODE OF BUSINESS CONDUCT AND ETHICS             
|CODE OF ETHICS                                  
|COMPENSATION COMMITTEE CHARTER                  
|AUDIT COMMITTEE CHARTER                         
|DISCLOSURE COMMITTEE CHARTER                    



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##### Table of Contents



NTL EUROPE, INC.
FORM 10-K
December 31, 2002
TABLE OF CONTENTS

|         |  |                                                                                                |  |      |    | 
|-------- |  | ---------------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                                |  | Page
|         |  |                                                                                                |  |     
|PART I   |  |                                                                                                |  |      | 3  | 
|Item 1.  |  | Business                                                                                       |  |      | 3  | 
|Item 2.  |  | Properties                                                                                     |  |      | 22 | 
|Item 3.  |  | Legal Proceedings                                                                              |  |      | 22 | 
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                            |  |      | 24 | 
|PART II  |  |                                                                                                |  |      | 24 | 
|Item 5.  |  | Market for Registrants Common Equity and Related Stockholder Matters                          |  |      | 24 | 
|Item 6.  |  | Selected Financial Data                                                                        |  |      | 25 | 
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  |      | 28 | 
|Item 7A  |  | Quantitative and Qualitative Disclosures About Market Risk                                     |  |      | 38 | 
|Item 8.  |  | Financial Statements and Supplementary Data                                                    |  |      | 39 | 
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           |  |      | 39 | 
|PART III |  |                                                                                                |  |      | 39 | 
|Item 10. |  | Directors and Executive Officers of the Registrant                                             |  |      | 39 | 
|Item 11. |  | Executive Compensation                                                                         |  |      | 41 | 
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  |      | 45 | 
|Item 13. |  | Certain Relationships and Related Transactions                                                 |  |      | 47 | 
|Item 14. |  | Controls and Procedures                                                                        |  |      | 50 | 
|PART IV  |  |                                                                                                |  |      | 50 | 
|Item 15. |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                                |  |      | 50 | 

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PART I

In this Form 10-K, references to £, (pound 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 CHF or Swiss Franc 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. As of December 31, 2002, the noon
buying rate in New York for cable transfers in the following foreign currencies
as certified for customs purposes by the Federal Reserve Bank of New York were
$1.6095 per UK (pound) 1.00, $1.0485 per (euro) 1.00 and $0.7229 per Swiss
Franc 1.00. You should not construe these exchange rates 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.




Item 1. Business

Overview

On May 8, 2002, the entity then known as NTL Incorporated (referred to
herein as Old NTL) and certain of its subsidiaries at that time, namely, NTL
(Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
Limited, Diamond Holdings Limited and Communications Cable Funding Corp., each
filed a voluntary petition for a prearranged joint plan of reorganization
under Chapter 11 of the United States Bankruptcy Code to convert approximately
$10.6 billion of debt into equity of two separate companies.

The filings were made on May 8, 2002 in the United States Bankruptcy Court
for the Southern District of New York located in New York, New York. On May
24, 2002, the debtors filed a disclosure statement and an amended joint
reorganization plan with the bankruptcy court. On July 15, 2002, the debtors
filed an amended disclosure statement and a second amended joint reorganization
plan with the bankruptcy court. On September 5, 2002, the bankruptcy court
entered an order confirming the Second Amended Joint Reorganization Plan of Old
NTL and certain subsidiaries, filed on July 15, 2002 (as modified and confirmed
on September 5, 2002).

The reorganization plan became effective on January 10, 2003, at which
time, pursuant to the reorganization plan, Old NTL was reorganized into two
separate companiesthe corporation previously named NTL Incorporated and the
corporation previously known as NTL Communications Corp. We are the entity
formerly known as NTL Incorporated having been renamed NTL Europe, Inc.
Following the consummation of the reorganization plan, we became the holding
company for substantially all of Old NTLs businesses and investments in
Europe, as well as certain other investments and interests. NTL Communications
Corp. was renamed NTL Incorporated and is the holding company for
substantially all of Old NTLs businesses and operations in the United Kingdom
and Ireland (referred to herein as New NTL). New NTL is an independent
entity which is no longer owned by or affiliated with us. However, because the
reorganization was consummated after the end of the fiscal year ended December
31, 2002 at which time NTL Communications Corp. was a subsidiary of Old NTL,
under applicable reporting requirements, certain information concerning Old NTL
and NTL Communications Corp. and its subsidiaries are required to be included
in this Form 10-K and the financial statements which are a part hereof.

We are incorporated under the laws of the State of Delaware. We were
originally incorporated on December 31, 1999. Through February 1999, NTL
Communications Corp., then known as NTL
-3-Table of Contents

Incorporated, was the holding company for all of Old NTLs businesses. At
that time, a new holding company was created and assumed the name NTL
Incorporated and the former holding company was renamed NTL Communications
Corp. In May 2000, a new holding company structure was implemented in
connection with the acquisition of Cable & Wireless Communications plc. The
new holding company assumed the name NTL Incorporated and the former holding
company was renamed NTL (Delaware), Inc., its current name. On the effective
date of the reorganization plan, we filed an amended charter which authorized,
among other things, the change of our name to NTL Europe, Inc. In addition, on
the effective date of and pursuant to the reorganization plan, all previously
outstanding public debt, equity securities and stock options of Old NTL were
cancelled and we authorized the issuance of 19,668,777 shares of common stock,
par value $0.01 per share, (19,657,433 of which were outstanding as of May 21,
2003) together with associated preferred stock purchase rights, and 7,364,000
shares of 10% Fixed Coupon Redeemable Preferred Stock, Series A, par value
$0.01 per share (with a $50.00 liquidation preference per share) (the
Preferred Stock) (6,862,193 of which were outstanding as of May 21, 2003).
In accordance with the reorganization plan, our board of directors has reserved
2,000,000 shares of our common stock for issuance upon exercise of the
management incentive options authorized for grant under our management
incentive plan. However, we have not issued, and we currently have no plans to
issue, any options under our 2003 Stock Option Plan.

The reorganization plan provided that each holder of an allowed NTL
Communications Corp. senior notes claim should receive, among other
consideration, its pro rata share of the Class 7 Euroco Value, which was
defined in the reorganization plan as the value of 331,222 shares of our common
stock. On November 20, 2002, the bankruptcy court entered an order authorizing
an amendment to the reorganization plan to make the definition of Class 7
Euroco Value more precise by including the timing of its distribution and the
method of calculating its value. As a result, the Class 7 Euroco Value was
defined to be the value of 331,222 shares of common stock calculated based on
the volume-weighted average closing prices of the shares of common stock during
the period of 60 trading days immediately following the effective date. A
trading day includes any day a trade of our common stock took place on the OTC
Bulletin Board. The expiration of the 60 trading day period occurred on April
21, 2003 and the Class 7 Euroco Value paid to holders of allowed NTL
Communications senior notes claims was in the aggregate amount of $47,216.

The order confirming the reorganization plan authorized and approved, as
of the effective date, the redemption for cash of $25 million of the Preferred
Stock. This redemption occurred on the effective date of the reorganization
plan. Following such redemption, an aggregate of 6,864,000 shares of Preferred
Stock were authorized for issuance (6,862,193 of which were outstanding as of
May 21, 2003), having a liquidation preference of approximately $343 million.
Further, upon the consummation of the reorganization plan (after taking into
account the redemption for cash of $25 million of our Preferred stock), we had
approximately $63 million in cash and our subsidiaries had an additional amount
of approximately $11 million in cash.

Our Business



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



| |  |  | NTL Premium TV Holdings Corp., our sports TV and internet content business                                                                        
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Cablecom GmbH, our cable business in Switzerland, ownership
of most of which we are unlikely to retain (See Recent Developments
 Cablecom GmbH)
|
| |  |  | NTL Lanbase, SL, our LAN/WAN installation business located in
Madrid, Spain                                                                       

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| |  |  | NTL Broadcast (Thailand) Ltd. and NTL Broadcast Sdn Ltd., our
Asian broadcast infrastructure, services and consulting business
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  | We currently have minority interests in the following operating entities:
| |  | -------------------------------------------------------------------------



| |  |  | Two Way TV Limited, an interactive television service provider                                                                                                                                                                                                                    
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Global Radio Participations SA, a European digital radio license holder                                                                                                                                                                                                           
|
| |  |  | ITV News Channel Limited, a 24-hour news channel located in the U.K.                                                                                                                                                                                                              
|
| |  |  | B2 (Bredband) AG, a Swedish broadband communications company,
but, as described more fully in this Form 10-K, NTL Delaware entered
into a settlement agreement on April 30, 2003, pursuant to which,
among other things, our interest in B2 will be transferred in the
near future

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

Recent Developments

Cablecom GmbH

Cablecom is our largest subsidiary which, during 2002 and 2001, accounted
for 92% and 84%, respectively, of our consolidated revenue. Cablecom is the
principal borrower under an amended and restated credit agreement, dated as of
April 30, 2002 and effective as of May 2, 2002. See Cablecom GmbH  Cablecom
credit facility and Cablecom credit facility amendment below. Under the
credit agreement, Cablecom and one of its subsidiaries are indebted in an
amount of approximately CHF 3,792 million (which includes recently accrued
interest payments), none of which is recourse to us. Although the credit
facility was originally scheduled to mature on April 30, 2003, upon the request
of Cablecom, the maturity date has been extended to the business day following
May 31, 2003, with an additional automatic extension to June 30, 2003 under
certain circumstances. In addition, Cablecom has been notified by the lenders
that it is in default under the credit agreement. Accordingly, the lenders
could seek to accelerate the maturity of the credit facility at any time.

Cablecom does not have the resources to repay the bank debt when it comes
due, whether on the extended maturity date or upon the acceleration thereof.
Further, as security for its guaranty of Cablecoms obligations under the
credit agreement, NTL Cablecom Holding GmbH, the parent entity of Cablecom, has
pledged to the lenders all of the shares of Cablecom. Accordingly, upon the
maturity of
-5-Table of Contents

the credit facility, whether upon acceleration or otherwise, the lenders
could seek to exercise their rights under the pledge. In such an event,
although we would not be liable for any of Cablecoms obligations, we would be
deprived of all of our ownership interest in Cablecom.

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

In order to seek to address the foregoing issues, Cablecom has been
actively engaged in negotiations with its lenders regarding an overall
financial restructuring of Cablecom. If consummated, such restructuring is
expected to include a reduction in the amount of debt outstanding, an extension
of maturity date of such debt and control of Cablecom being assumed by the
lenders. As part of such negotiations, we are seeking to retain a small
minority interest in Cablecom in consideration for our cooperation in
permitting Cablecom to reach a consensual restructuring plan with its lenders.
There is, however, no assurance that such negotiations will be successful.
Further, whether or not such negotiations are successful, we expect to be
deprived of our controlling interest in Cablecom in the near future. After
such occurrence, the results of Cablecom will not be reported as part of our
consolidated results of operations.

B2 Bredband AB

On April 30, 2003, NTL Delaware, together with its subsidiaries NTL Sweden
SPV Inc. and Nogenta Swedish Acquisition Holding B.V., entered into an
agreement with B2 and the other principal shareholders of B2 relating to, among
other things, the transfer of our securities in B2. Under the agreement, the
NTL Europe parties have agreed to transfer their interest in B2 to certain
other shareholders of B2 in exchange for approximately $375,000 in cash or
certain securities of a B2 affiliate and mutual releases among the parties
relating to a dispute stemming from an April 15, 2002 funding request for
approximately $20 million. In connection with the mutual releases, the
agreement provides that B2 and the other principal shareholders will withdraw,
or otherwise assist NTL Delaware in obtaining bankruptcy court denial of, the
proofs of claim filed by B2 and the other principal shareholders in the
bankruptcy court. The closing of this transaction is subject to customary
closing conditions, but the NTL Europe releases are effective unless the NTL
Europe parties breach their respective obligations under the agreement.

iesy Hessen GmbH

On November 3, 2002, Old NTL, NTL Delaware, and Brigadoon Ventures, Inc.,
a wholly-owned subsidiary of NTL Delaware, entered into an agreement, pursuant
to which (1) Old NTL was entitled to receive a cash facilitation fee for our
cooperation in the restructuring of iesy Hessen GmbH and its subsidiaries (but
not in consideration of the Old NTL entities indirect equity stake in iesy
Hessen) of approximately $1.3 million, less the Old NTL entities pro rata
share of expenses (approximately $250,000) and (2) the Old NTL entities were
entitled to receive a release of possible liabilities and claims arising out of
their indirect equity stake in iesy Hessen, including claims alleged by certain
holders of
-6-Table of Contents

notes of iesy Hessen in the bankruptcy. The transactions contemplated by
the iesy Hessen agreement closed in January 2003.

Cablecom GmbH

Introduction

As described above in Recent Developments  Cablecom GmbH, Cablecom has
approximately CHF 3,792 million in bank debt (which includes recently accrued
interest payments) maturing on the business day following May 31, 2003 (with an
additional automatic extension to June 30, 2003 under certain circumstances),
and insufficient resources to satisfy such obligation. In addition, Cablecom
and two of its subsidiaries are overindebted under Swiss law and,
accordingly, may be required to file for insolvency proceedings in Switzerland.
Cablecom and its lenders have been involved in ongoing discussions regarding a
complete financial restructuring of Cablecom which will, among other things,
reduce the amount of bank debt outstanding, extend the maturity date thereof
and resolve the Swiss overindebtedness issue. In the event that such
negotiations are unsuccessful, we expect to be deprived of all of our ownership
interest in Cablecom in the near future. Further, even if such negotiations
are successful, we expect to be left with no more than a small minority
interest in Cablecom. Accordingly, we anticipate that, in the near future, the
results of Cablecom will no longer be reported as part of our consolidated
results of operations. In that regard, it should also be noted that, in
accordance with the terms of the existing Cablecom credit agreement, no
dividends, distributions or other payments have ever been or will be made by
Cablecom to us. Notwithstanding these facts, because Cablecom was our
wholly-owned subsidiary on December 31, 2002 and remains so as of the date
hereof, we have included the following business description of Cablecom.

Cablecom Business Overview

Cablecom is Switzerlands largest cable operator with approximately 54% of
the Swiss cable television market as of December 31, 2002. Cablecom currently
operates in the following three business areas:
(1) Cable Networks. Residential cable television is Cablecoms largest
business and comprises 28 different cable networks of which six are
wholly-owned by Cablecom. This accounts for approximately 91% of total
subscribers. As of December 31, 2002, Cablecom had a penetration rate of over
91% of homes passed, 82% of the network is upgraded and over 1.1 million homes
are bi-directional. Approximately 72,000 digital television customers and
135,000 broadband internet subscribers were connected as of December 31, 2002.
Furthermore, Cablecom had approximately 100,000 dial up internet subscribers at
that time. 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 and Romansch speaking regions.

(2)  Cablecom Business. Cablecom Business AG, a wholly-owned subsidiary of
Cablecom, offers advanced data services to the Swiss business market. With one
of two national fiber backbones, Cablecom Business provides voice and data
services to the small, medium and multi-site national business. Current
products include leased lines, virtual private networks, connectivity and
carriers carrier services.

(3) Engineering Services. Cablecom, through Cablecom Business, also
provides cable television engineering services to third parties. In this
business segment, Cablecom is the leader in Swiss cable television engineering
with a market share of 75%. Services include third-party cable television
systems and network infrastructure planning and design, project management, and
network measurement and maintenance.

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##### Table of Contents



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



| | (1) |  | Fiber optic backbone;                     
| | --- |  | ------------------------------------------
|
| | (2) |  | Hybrid-fiber coaxial or HFC network; and
|
| | (3) |  | In-house installations.                   

Cablecoms network upgrade program comprises installing new fiber optic
backbone connections, installing new HFC nodes and connecting them to the fiber
optic backbone, installing a return path in the HFC amplifiers and replacing
the in-house wiring or installing filters. Over 82% of the HFC network was
upgraded at the end of 2002. Moreover, as HFC networks in each area are
upgraded, Cablecom upgrades in-house installations at the request of
subscribers wishing to subscribe to new services, including digital cable
television, high-speed internet and telephony services.

Cable Television Services. In November 1999, Cablecom launched digital
services under the SwissFun brand name in German-speaking regions of
Switzerland. SwissFun is currently referred to as Cablecom Digital TV. As
of December 31, 2002, Cablecom had approximately 72,000 digital television
subscribers. Using a purchased or leased set-top-box, Cablecom subscribers can
access an additional 30 digital channels and 25 radio channels for free, as
part of their basic television subscription offering. The subscribers can then
subscribe to over 25 additional channels in pay packages.

In addition to increasing the number of channels that can be broadcast,
the introduction of digital broadcasting allows Cablecom to address each
set-top-box individually, providing Cablecom with the necessary flexibility to
bundle expanded basic and pay channels into more attractive pay packages.

Since September 2002, Cablecom has been offering additional pay-per-view
services over its network. Customers have the opportunity to individually
purchase up to 20 popular movies each month on a pay-per-view basis.

Internet Services. Cablecom intends to continue to roll out high-speed
internet access services throughout its service areas as its networks are
upgraded to bi-directionality. To maximize the return on capital expenditure,
Cablecom is first upgrading subscriber areas where demand is the highest. As
of December 31, 2002, Cablecom provided cable modem services to approximately
135,000 subscribers.

Cablecom also offers dial-up internet services to both residential
customers and businesses via its SwissOnline portal. SwissOnline is a
wholly-owned subsidiary of Cablecom and is one of Switzerlands largest
internet service providers and one of the leading portals in Switzerland.

Telecommunication Services. Apart from Swisscom, Cablecom is the only
company with a nationwide footprint and a local loop infrastructure in
Switzerland. When it has completed its network upgrade, Cablecom expects to
provide broadband local loop infrastructure access to nearly 50% of Swiss
households. Cablecoms local loop networks cover all major Swiss cities,
except Lausanne and Geneva. In Geneva, Cablecom has a 12.2% stake in 022
Telegeneve, a company which provides such coverage.

In December 2001, lab testing and field trials of the Cablecom VoIP
telephony product proved successful. In November 2002, an employee test was
launched which has been followed by a consumer test launch in the first quarter
of 2003. Cablecom plans the commercial launch of its telephony product in
2003.

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##### Table of Contents



Competition for Cablecom in Switzerland

(1)  Cable Television. Cablecom is Switzerlands largest cable operator
with approximately 54% of the Swiss cable television market as of December 31,
2002. Despite consolidation in the industry, which was led by Cablecom, the
cable services industry remains highly fragmented. Cablecom offers value added
services, including digital television, pay-television, interactive-television,
near-video-on-demand, high speed internet, and in the future
voice-over-internet Protocol-telephony. These services compete with third
parties such as pay television offerings from satellite operators.

(2)  Internet. In the provision of internet services, Cablecom primarily
competes with blu win (formerly Blue Window) which is owned by Swisscom, and
the internet services offered by Sunrise (TDC Switzerland).

(3)  Fixed Line Telephony. The principal competitor in both residential and
business telephony will be Swisscom, the incumbent provider of telephony
services in Switzerland. A number of alternative carriers are building a
network backbone infrastructure, including Sunrise, which is majority owned by
TDC A/S (Tele Danmark), d holding (Swiss utilities), UBS AG and the Swiss
Railways.

Cablecom credit facility and Cablecom credit facility amendment

Introduction

As described above in Recent Developments  Cablecom GmbH, Cablecom has
approximately CHF 3,792 million in bank debt (which includes recently accrued
interest payments) maturing on the business day following May 31, 2003 (with an
additional automatic extension to June 30, 2003 under certain circumstances),
and insufficient resources to satisfy such obligation. In addition, Cablecom
and two of its subsidiaries are overindebted under Swiss law and,
accordingly, may be required to file for insolvency proceedings in Switzerland.
Cablecom and its lenders have been involved in ongoing discussions regarding a
complete financial restructuring of Cablecom which will, among other things,
reduce the amount of bank debt outstanding, extend the maturity date thereof
and resolve the Swiss overindebtedness issue. In the event that such
negotiations are unsuccessful, we expect to be deprived of all of our ownership
interest in Cablecom in the near future. Further, even if such negotiations
are successful, we expect to be left with no more than a small minority
interest in Cablecom. Accordingly, we anticipate that, in the near future, the
results of Cablecom will no longer be reported as part of our consolidated
results of operations. In that regard, it should also be noted that, in
accordance with the terms of the existing Cablecom credit agreement, no
dividends, distributions or other payments have ever been or will be made by
Cablecom to us.

The debts outstanding under the credit agreement, dated March 28, 2000, as
amended on May 16, 2000 and as amended and restated as of April 30, 2002,
between, among others, NTL Delaware as indirect parent, NTL Cablecom Holding
GmbH as shareholder, Cablecom as principal borrower, J.P. Morgan plc and Morgan
Stanley Senior Funding, Inc. as arrangers and joint book managers, J.P. Morgan
Europe Limited as agent, and the lenders party thereto, as may be further
amended and/or restated from time to time described below and incorporated by
reference to Exhibit 10.2 hereof is an obligation solely of the Cablecom group
(which does not include NTL Delaware) and is non-recourse to us. If no further
investment is made into Cablecom and/or the Cablecom credit facility is not
restructured and/or further borrowing is not permitted, Cablecom will be unable
to repay the Cablecom credit facility, which is payable on the first business
day following May 31, 2003 or, under certain circumstances which would provide
an automatic extension, June 30, 2003. The terms of the existing credit
agreement (and the anticipated terms of any modification to the credit
agreement) restrict the payment of any dividends, distributions or other
payments from Cablecom to its shareholders. Accordingly, we have not received
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and do not expect to receive any liquid assets or other contribution to
the funding of our operating expenses or the operating expenses of our
subsidiaries through our current or, if any, future ownership in Cablecom. See
Risk Factors Relating to Cablecom and Risk Factors Relating to our Company and
our Securities.

Swiss Regulation Affecting Cablecom

A comprehensive new regulatory framework governing telecommunications
services in Switzerland was established with the entry into effect on January
1, 1998 of the Telecommunications Act and a concurrent restatement of the Radio
and Television Act. The new regulatory regime opened both the
telecommunications and cable television markets to enhanced competition.



| | (1) |  | Telecommunications Act.
| | --- |  | -----------------------

The Telecommunications Act sets forth the general framework for the
transmission of voice and data information through telecommunications devices.
The provisions of the Telecommunications Act apply by default to the
transmission and retransmission of radio and television signals, unless the
Radio and Television Act stipulates different rules.

According to the Telecommunications Act, any operator which provides
telecommunications services and independently operates a significant portion of
a network must obtain a license. If certain technical and organizational
criteria are met, the operator is entitled to obtain such license. Special
rules apply to the use of the radio frequency spectrum and the provision of
universal service. Fixed line carriers and cable television operators have a
legal right to lay cables on public property in order to build their networks.

Under the Telecommunications Act, responsibility for regulation of the
telecommunications sector and the promotion of fair and open competition has
been allocated among several regulatory bodies, including the independent
Commission for Communication (ComCom), the administrative Office for
Communication (OfCom), and the Federal Department of Environment, Transport,
Energy and Communication (UVEK/DETEC) as well as the Competition Commission.
Whereas ComCom is acting as the exclusive licensing authority, OfCom is
responsible for the day-to-day oversight of the telecommunications sector.

The Telecommunications Act requires that a telecommunications service
provider that has a dominant position in a relevant market must provide
interconnection to other providers on a non-discriminatory basis and in
accordance with a transparent and cost-oriented pricing policy, stating the
conditions and prices separately for each interconnection service. The
Telecommunications Act authorized the Swiss federal government to produce
secondary legislation governing interconnection known as the Telecommunications
Ordinance. Under the Ordinance, non-dominant operators providing universal
service are also subject to certain interconnection duties. Market dominance is
determined on the grounds of the Swiss Competition Act.

The Ordinance specifies that a market-dominant provider must grant access
to the necessary equipment, services, and information on a transparent and
non-discriminatory basis, in no worse a manner than the market-dominant
provider does so internally to its divisions, subsidiaries, and partners. The
Ordinance requires that prices charged for interconnection services be
cost-oriented (LRIC standard). To date only Swisscom, the former telecom PTT,
has been designated as market dominant.

In 2001, the Swiss Supreme Court ruled that, despite Swisscoms market
power, there are no legal grounds to require Swisscom to grant interconnection
for rented lines and transmission media,
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thereby partly reversing a prior decision by ComCom. The Swiss Supreme
Court further ruled that the current law provides no basis for the
unbundling. No explanation was given as to whether this term was meant to
include the full unbundling of the local loop, the shared use of the copper
wire, or the provision of fast bitstream access by the incumbent at
non-discriminatory terms. Following this ruling, the Federal Council has
amended, effective January 4, 2003, the Telecommunications Ordinance and
thereby has forced the unbundling of the local loop and the inclusion of rented
lines in the interconnection regime. Swisscom has announced that it will
challenge the new ordinance in court. Both the recent move by the Federal
Council and the attitude of Swisscom are likely to increase pressure on market
dominant cable television operators to grant interconnection and eventually
unbundled access to their local loop in one way or another.



| | (2) |  | Radio and Television Act.
| | --- |  | -------------------------

The Radio and Television Act regulates the operation, transmission,
retransmission, and receipt of radio and television programs, including related
information. It distinguishes between the provision of content (programs in
the terminology of the Act) on the one hand and retransmission on the other
hand. A cable television operator must obtain a blanket retransmission license
before it can transmit content. The must carry rules of the Act require any
licensee to retransmit uncoded television programs which are broadcast by
terrestrial signals as well as the channels of the Swiss Broadcasting
Corporation (SRG).

The Act furthermore states that a licensee may neither force nor refuse to
provide the access of customers to its network. Landlords of properties must
also grant access if a lessee so requests and if it covers any related costs.
If access is granted, a licensee may still be barred from collecting
subscribers fees if the lessees are unwilling to use the cable facilities or
if a customer no longer wishes to avail itself of the services of the licensee.
In this event, however, the licensee may seal the unused facilities. The Radio
and Television Act is currently undergoing a comprehensive restatement.

Cablecom Regulatory Matters and Litigation

Cablecom is subject to the regulations of the Swiss Price Regulation Act
and the Swiss Competition Act. Parties found to hold and abuse a dominant
market position in a given market may be subject to remedies under the
provisions of these Acts; such remedies may include the regulation of prices by
the Swiss Price Regulator. Cablecom was involved in proceedings before the
Swiss Price Regulator, and reached an agreement late last year relating to the
prices charged for basic television service it provides. Cablecom is currently
also involved in proceedings before the Swiss Competition Commission where an
order is being sought forcing Cablecom to distribute Teleclubs programs over a
set-top box of Teleclubs own choosing. Details of both of these proceedings
are described below.

Agreement with the Swiss Price Regulator

Pursuant to the agreement reached with the Price Regulator late last year,
Cablecom must not charge more than CHF 19.50 per month per subscriber for basic
television service for the period 2003-2004. The result of the settlement is
that Cablecoms price structure has been set back to approximately 2001 levels.

Litigation With Teleclub

At present, Cablecom is involved in proceedings before the Swiss
Competition Commission where an order is being sought forcing Cablecom to
distribute Teleclubs digital programs over a set-top box of Teleclubs own
choosing. A preliminary order was granted against Cablecom, requiring certain
interim measures, including, among other things, that Cablecom transmit the
digital television signals of

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Teleclub on the Cablecom network, and stating that any appeal of the
preliminary order would not have the effect of suspending the interim orders
contained therein. The Appeals Commission in Competition Matters has confirmed
such interim measures. Cablecom has chosen not to pursue a further appeal
against the part of the order granting immediate effect to the interim
measures. As a result, on December 16, 2002, Cablecom commenced distribution
of Teleclubs digital signal over Cablecoms network. Cablecom has, however,
challenged the interim measures and the appeal is currently pending before the
Swiss Federal Supreme Court. In the main proceeding, Teleclub is asking the
Competition Commission to issue a permanent order pursuant to which Cablecom
should be forced to distribute its programs in the manner described above. In
addition, Teleclub is also asking the Competition Commission to set conditions,
including prices, that Cablecom should be permitted to impose on Teleclub in
connection with the distribution of its programs.

NTL Premium TV Holdings Corp.

Overview

NTL Premium TV Holdings Corp., our indirect wholly-owned subsidiary,
exploits UK sports rights across the internet and broadcast media. Its lines
of business include the operation of UK football-related web sites, the
distribution and marketing of British Eurosport, a basic pay television sports
channel, and the exploitation of other UK sports and sponsorship rights.

Premium TV has entered into a number of joint venture agreements and other
contracts with the Football League, a UK football association which represents
a group of approximately 75 teams, and other individual teams, including
Glasgow Rangers, Newcastle United, Aston Villa, Middlesborough and Leicester
City to operate web sites with exclusive internet rights to video, audio and
other information (including mobile telephone rights). Premium TV also has a
contract with Eurosport to distribute British Eurosport; contracts with the
British Broadcasting Corporation, or BBC, giving Premium TV the right to
exploit the BBC sports archive and the right to launch a channel with that
content; a contract with the FA Premier League for the pay per view rights to
certain UK football matches; and a contract with the European Rugby Cup to
broadcast its tournament. In addition, Premium TV has entered into a number of
agreements with New NTL, pursuant to which Premium TV receives certain
operational services covering premises, connectivity, hosting, technology and
other corporate volume purchasing benefits. Premium TV, through its joint
venture with the Football League, also has a co-marketing agreement linked with
New NTL to its broadband product and Premium TV has an agreement with New NTL
pursuant to which New NTL is able to exploit Premium TVs FA Premier League pay
per view rights.

Premium TVs internet sites provide team fans with up-to-date statistics,
exclusive pre-game and post-game interviews with players and coaches, an
archive of video clips of game highlights and best plays, access to club
internet merchandise shops and opportunities to exchange views with other fans.
Premium TV operates a customized internet platform and billing system on
behalf of its joint venture and other contractual partners. Premium TV
provides all of the funding for its joint ventures except the Newcastle joint
venture which is jointly funded by Premium TV and Newcastle. The joint
ventures share the cost of the platform and other operating costs incurred by
Premium TV. Premium TV is also entitled to distributions from the joint
ventures in accordance with the terms of each of the joint venture
arrangements. Premium TVs revenue streams related to its internet business
are comprised of subscription revenue for its broadband service, advertising
and sponsorship revenue, e-commerce revenue, betting revenue and other revenue.

The demand for Premium TVs internet services has been growing since its
inception in 1999. Demand is driven by the popularity of football in the
United Kingdom, the growth of broadband internet services in the UK, and
improvements in internet services and features, particularly the advances in
video
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streaming technology. As of December 31, 2002, Premium TV had over one
million registered users for its internet sites and approximately 24,000
subscribers for its broadband premium services. Premium TVs revenue for 2002
and 2001 was $28.4 million and $40.6 million, respectively.

During 2002, Premium TV implemented a technical upgrade of its internet
platform to allow automated software authoring which enables Premium TV to
introduce new features and designs to its audience with considerably shorter
lead times than has been possible in the past. Premium TV believes that its
platform has reached operational stability and that it is now in a position to
scale back development expenditure and focus its efforts on exploiting revenue
from its internet product.

Competition

Premium TV competes with other providers of UK football content including
television stations, radio stations, newspapers, unofficial websites, UK
football teams who host their own web-sites and other companies that have
similar arrangements with other UK football teams. British Eurosport competes
with premium sports services and free television broadcasters who air sporting
events.

Modification with the Football League

On September 24, 2002, Premium TV, NTL Delaware and Old NTL agreed to vary
the terms of the joint venture arrangements with the Football League. Under
the terms of the variation, upon the payment of arrears of rights fees by
Premium TV, the Football League and the joint venture company, FLPTV, agreed to
release Premium TV from its obligation to fund the payment of any further
rights fees to the Football Leagues member teams and its obligation to provide
working capital funding to the joint venture. The Football League also agreed
to release NTL Delaware from its guarantee of Premium TVs obligations and to
release Old NTL from the related undertaking. In return, Premium TV agreed to
waive repayment of loan capital by the joint venture and to provide certain
ongoing services to the joint venture free of charge for an initial period.
NTL Delaware agreed to deposit £10.33 million into a designated single purpose
account for use by Premium TV to finance the provision of such services.
Premium TV and the Football League also agreed to new terms relating to the
distribution of revenue generated by the joint venture.

Settlement with NTL Broadcast

Prior to our emergence from bankruptcy, Classic Sport Limited, an indirect
wholly-owned subsidiary of Premium TV, settled a dispute with National
Transcommunications Limited, referred to as NTL Broadcast, the broadcast and
transmission division of New NTL, relating to approximately £13 million that
NTL Broadcast claimed it was owed in relation to the termination of a contract
between the parties. Classic Sport, Premium TV Limited (which entered into the
contract as agent for Classic Sport) and NTL Broadcast have agreed to a
settlement of this matter, whereby the disputed contract was terminated,
Classic Sport and Premium TV Limited settled all outstanding invoices owed to
New NTL (in the amount of approximately £5 million), and NTL Broadcast received
£700,000 in full and final settlement of all outstanding and future claims
between the parties relating to the contract.

NTL Lanbase, SL

NTL Lanbase, based in Madrid, Spain, installs and maintains local and wide
area networks, primarily using components manufactured by leading telecom
manufacturers, for a number of businesses in Spain. In 2002 and 2001, NTL
Lanbases revenue was $3.6 million and $3.8 million, respectively.

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NTL Asia

In 1999 and 2001, NTL Broadcast established two subsidiaries, located in
Thailand and Malaysia, respectively. Following consummation of the
reorganization plan, we maintained ownership of the operations in Malaysia and
Thailand through two companies, NTL Broadcast Sdn and NTL Broadcast (Thailand)
Ltd, which we refer to together as NTL Asia. The two subsidiaries are
managed as one business. Separately, New NTL maintains a branch office in
Singapore. Our subsidiaries rely on New NTLs Singapore office for
administration and other support services. We have entered into an agreement
to jointly manage the business of NTL Asia with New NTL. NTL Asia together
with New NTLs branch office in Singapore offers design and build, consultancy
and system integration services to broadcasters in Malaysia and Thailand. In
2002 and 2001, NTL Asias revenue was $2.2 million and $6.7 million,
respectively.

Minority Interests

The following is a brief description of our minority holdings. We do not
believe that these holdings, alone or in the aggregate, represent material
assets to us.

Two Way TV Limited

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

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

Global Radio Participations SA

We have an equity interest of approximately 33% in Global Radio, a
Luxembourg based company formed in 1999 for the purpose of developing,
launching and operating a satellite based digital radio and two-way data
network designed to provide the European consumer and automotive industry with
a level of entertainment and data services not available by existing means.
The Global Radio business model is subscription based audio entertainment with
the added ability to offer a range of data services.

ITV News Channel Limited

We have an equity interest of approximately 35% in ITV News Channel
Limited, a 24 hour news channel aired in the United Kingdom. It competes with
the BBC, British Sky Broadcasting Group PLC and all other 24 hour news channels
in the United Kingdom. We are currently in negotiations to sell our minority
ownership of ITV.

B2 Bredband AB

B2 is a broadband communications company providing 10 Mb/s network access
and broadband services to residential and small-to-medium business customers in
Sweden. B2 provides always on, low-cost access to a high-capacity broadband
network that provides transmission both to and from the
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customer at the same speed and at the same time. B2s 10 Mb/s network
access speed is substantially faster than typical connections offered by
existing cable television and telecommunications operators and is upgradeable
to 100 Mb/s without significant expense. In addition to broadband access, B2
intends to provide telephony and video access to its customers through a
personalized, interactive interface. B2 has tested its VoIP telephony product.
As described under our Recent Developments-B2 and Litigation sections, we
have been involved in a funding dispute with the other holders of B2. In
connection with this dispute, we entered into a settlement agreement on April
30, 2003, pursuant to which, among other things, we have agreed to transfer all
of our interest in B2 in exchange for approximately $375,000 in cash or certain
securities of a B2 affiliate and mutual releases among the parties to the
dispute.

Employees

As of March 31, 2003, we had eight employees and consultants located in
Rye, New York, London, England and Paris, France. Cablecom had approximately
1,400 employees throughout Switzerland. Premium TV had approximately 100
employees in London, England. NTL Lanbase had approximately 20 employees in
Madrid, Spain. NTL Asia had a total of approximately 20 employees.

Management and Corporate Governance

The members of our board of directors are Jeffrey A. Brodsky, Michael J.
Cochran and H. Sean Mathis. Jeffrey A. Brodsky is the chairman of the board of
directors. Our officers are Jeffrey A. Brodsky, our president and chief
executive officer, John F. Gregg, our chief financial officer and treasurer,
Bruno Claude, our chief operating officer, Robert A. Schmitz, our vice
president and secretary, and Richard A. Spohn, our vice president and chief
accounting officer.

Pursuant to the bankruptcy plan, we entered into a Stockholder Rights
Agreement pursuant to which, under certain circumstances, each stockholder
would receive the right to purchase one one-thousandth of a share of our Series
A Junior Participating Preferred Stock for $0.01 per share. The price was
ratified by our board of directors on April 10, 2003.

Our board of directors has established a compensation committee, comprised
of two members, Michael J. Cochran and H. Sean Mathis, who qualify as
non-employee directors within the meaning of the Securities Exchange Act of
1934. The chairman of the compensation committee is Michael J. Cochran.

Our board of directors has established an audit committee, comprised of
two members, Michael J. Cochran and H. Sean Mathis, who meet the independence
test under Section 301 of the Sarbanes-Oxley Act of 2002. The chairman of the
audit committee is H. Sean Mathis.

Our audit committee has established a disclosure committee in connection
with our disclosure controls and procedures mandated by the Sarbanes Oxley Act
of 2002 and the Securities and Exchange Commission. Our disclosure committee
is comprised of our chief executive officer, chief financial officer, chief
accounting officer, chief operating officer and such other employees as
designated by the chief executive officer from time to time including the heads
of our various business segments.

We have entered into employment agreements with each of John F. Gregg and
Bruno J. Claude. In addition, Cablecom has entered into employment agreements
with each of John F. Gregg and Bruno J. Claude.

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We have engaged Quest Turnaround Advisors, L.L.C., a company whose
principals include Jeffrey A. Brodsky and Robert A. Schmitz, to provide
consulting services to us and our subsidiaries. The services of Messrs.
Brodsky and Schmitz are provided to us by Quest Turnaround Advisors.

We have entered into Director and Officer Indemnification Agreements with
Jeffrey A. Brodsky, H. Sean Mathis, Michael J. Cochran, Robert A. Schmitz,
Richard A. Spohn, John F. Gregg, Bruno Claude and Jeffrey G. Wyman, our general
counsel.

Additional Risk Factors

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

Risk Factors relating to our Company and our Securities

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

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

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

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

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

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

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

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

Our Preferred Stock has significant rights and preferences over our common
stock. Our charter which governs the common stock and the Preferred Stock
requires us to pay semi-annual dividends to holders of the Preferred Stock on a
cumulative basis, and imposes limitations on the payment of dividends on the
common stock. Furthermore, on the effective date and pursuant to the
reorganization plan, we redeemed $25 million in aggregate liquidation
preference of the Preferred Stock. Immediately following such redemption,
approximately $343 million of aggregate liquidation preference of Preferred
Stock remains outstanding. If we liquidate, holders of Preferred Stock would
be entitled to payment of the liquidation preference in full before any
distribution could be made to holders of common stock. If we liquidate, the
holders of Preferred Stock may not receive the full amount of their liquidation
preference, and it is likely that there would be no assets available for
distribution to holders of common stock who would receive no recovery. Our
Preferred Stock is also entitled to mandatory redemption out of the net
proceeds of any asset sale for cash that we or our subsidiaries complete,
subject to some limited exceptions set forth in the charter.

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

Our common stock reached a high closing sales price of $0.65 on January
14, 2003. As of April 30, 2003, the closing sales price of our common stock
was $0.055. Due to a number of factors including that our common stock is a
penny stock, our common stock trades on the OTC Bulletin Board and the Pink Sheets, most of our
holdings may be restructured and the liquidation preference of our Preferred
Stock, the value of our common stock may not increase in any significant
amount.

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

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

The historical financial statements contained in this Form 10-K may not be
indicative of our future results of operations or financial condition.

With the separation of Old NTL into two entities, New NTL retained the
assets with substantial value. Generally, other than Cablecom, (which itself
is being restructured, See Recent Developments  Cablevision GmBH) our assets
are not particularly material compared to those of New NTL. Further, as
discussed above, our board of directors and management will explore the
strategic and financial alternatives available to us. Accordingly, the
historical financial statements of Old NTL and New NTL for periods prior to
January 10, 2003, are not particularly meaningful to our current and
anticipated future business and should not be relied upon as indicative of our
future performance.

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

In connection with the bar date for filing of securities laws claims
against the debtors pursuant to an order of the bankruptcy court, proofs of
claim were filed against Old NTL, NTL Delaware and NTL

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Communications by Morgan Stanley Senior Funding Inc. for $11.4 million.
These claims were asserted by Morgan Stanley Senior Funding Inc. in respect of
alleged unpaid financing fees for commitments of capital made in 1999. While
we intend to vigorously defend against these claims, an adverse determination
of these claims could reduce our cash for operations or distribution to our
stakeholders.

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

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

Our guaranty obligations could reduce our cash position.

We have guaranteed the obligations of one of our subsidiaries, the
exposure of which is currently in the aggregate amount of up to approximately
£4.2 million. In addition, one of our wholly-owned subsidiaries, NTL Delaware,
has guaranteed the obligations of certain of its subsidiaries and affiliated
joint ventures, the exposure of which is currently in the aggregate amount of
up to approximately £26 million. These guarantees arise under the performance
of certain contracts by certain of our subsidiaries. As long as these
subsidiaries continue to perform the services under these contracts, our
financial obligations regarding these guarantees would be reduced. However,
any call on these guarantees could substantially reduce our cash position and
the cash position of our subsidiaries.

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

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

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

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

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

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

Risk Factors Relating to Cablecom

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

Cablecom is the principal borrower under an amended and restated credit
agreement dated as of April 30, 2002 and effective as of May 2, 2002. See
Cablecom GmbH  Cablecom credit facility and Cablecom credit facility
amendment above. Under the credit agreement, Cablecom and one of its
subsidiaries are indebted in an amount of approximately CHF 3,792 million
(which includes recently accrued interest payments). Although the credit
facility was originally scheduled to mature on April 30, 2003, upon the request
of Cablecom, the maturity date has been extended to the business day following
May 31, 2003, with an additional automatic extension to June 30, 2003 under
certain circumstances. In addition, Cablecom may currently be in default under
the credit agreement. Accordingly, the lenders could seek to accelerate the
maturity of the credit facility at any time.

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

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

In order to seek to address the foregoing issues, Cablecom is currently in
active negotiations with its lenders regarding an overall financial
restructuring of Cablecom. If consummated, such restructuring is expected to
include a reduction in the amount of debt outstanding, an extension of maturity
date of such debt and control of Cablecom being assumed by the lenders. As
part of such negotiations, we are seeking to retain a small minority interest
in Cablecom in consideration for our cooperation in permitting Cablecom to
reach a consensual restructuring plan with its lenders. There is, however, no
assurance that such negotiations will be successful. Further, whether or not
such negotiations are successful, in light of, among other things, the lenders
ability to exercise their rights under the pledge, as well as the possibility
of insolvency proceedings, we expect to be deprived of our controlling interest
in Cablecom in the near future. After such occurrence, the results of Cablecom
will not be reported as part of our consolidated results of operations.

-19-



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

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

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

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

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

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

Risk Factors Relating to Our Investment in Premium TV

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

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

-20-



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

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

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

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

Risk Factors Relating to NTL Asia

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

The market for broadcast services in Asia has been slow to evolve and, as
a result, demand for NTL Asias services has been lower than expected. If this
demand does not increase, then NTL Asias revenue without additional financing
may not be sufficient to cover its expenses.

The current social circumstances in the NTL Asia region will likely affect
the business of NTL Asia.

As a result of the war in Iraq, NTL Asias business is potentially
affected due to factors of discrimination through association with UK or US
ownership. In addition, the current health scare related to the potential SARS
epidemic is a risk to the effective operation of NTL Asias business.

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

Certain statements contained in this Form 10-K may constitute
forward-looking statements. When used in this Form 10-K, the words,
believe, anticipate, should, intend, plan, will, may, could,
expects, estimates, projects, positioned, strategy, and similar
expressions identify such forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of our company
and our subsidiaries and affiliated joint ventures, or industry results, to be
materially different from those contemplated or projected, forecasted,
estimated or budgeted, whether expressed or implied, by such forward-looking
statements.

Such factors include, among others, those set forth in this section under
the caption Risk Factors as well as: our ability and the ability of our
subsidiaries and affiliated joint ventures to continue as going concerns; the
ability to obtain trade credit and shipments and terms with vendors and service
providers for current orders; our ability to maintain contracts that are
critical to their respective
-21-Table of Contentsoperations; potential adverse developments with respect our liquidity,
operations or results of operations; the ability to fund and execute our
business plans; the ability to attract, retain and compensate our key
executives and associates; our ability to attract and retain customers; general
economic and business conditions; technological developments; our ability to
continue to design networks, install facilities, obtain and maintain any
required governmental licenses or approvals and finance construction and
development, all in a timely manner at reasonable costs and on satisfactory
terms and conditions; assumptions about customer acceptance, churn rates,
overall market penetration and competition from providers of alternative
services; the impact of restructuring and integration actions; the impact of
new business opportunities requiring significant up-front investment; and
interest rate and currency exchange rate fluctuations. We assume no obligation
to update the forward-looking statements contained or incorporated by reference
herein to reflect actual results, changes in assumptions or changes in factors
affecting such statements.Where You Can Find More InformationWe file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
internet at the SECs website at http://www.sec.gov. You may also read and
copy any document we file at the SECs public reference room in Washington,
D.C. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. In addition, our filings are available on our website
at http://www.ntleurope.com.Item 2. Properties

Our executive office is located in Rye, New York under a lease at a
current annual rental expense of $9,480. In addition, we use office space in
London, England leased by one of our subsidiaries.In Switzerland, Cablecom owns or leases a total of 32 office locations.
In addition, in Switzerland, Cablecom owns or leases approximately 450 network
sites and 21 warehouse locations and other nonoperational properties, as well
as various cable television, telephone and telecommunications equipment housed
on public and private sites.Premium TV has an agreement with New NTL to use facilities in Feltham,
England which house its internet platform equipment and administrative offices.
Pursuant to the agreement with New NTL, Premium TV does not pay for the use of
this space.We believe that our facilities are well maintained and adequate to meet
our needs in the foreseeable future.Item 3. Legal Proceedings

In connection with the bar date for filing of securities laws claims
against the debtors pursuant to an order of the bankruptcy court, proofs of
claim were filed against Old NTL, NTL Delaware and NTL Communications by Morgan
Stanley Senior Funding Inc. for $11.4 million. These claims were asserted by
Morgan Stanley Senior Funding Inc. in respect of alleged unpaid financing fees
for commitments of capital made in 1999. We believe we have meritorious
defenses to these claims and, on May 8, 2003, we filed an objection to these
claims. At this time, we cannot predict the outcome of these claims.At present, Cablecom is involved in proceedings before the Swiss
Competition Commission where an order is being sought forcing Cablecom to
distribute Teleclubs digital programs over a set-top box of Teleclubs own
choosing. A preliminary order was granted against Cablecom, requiring certain-22-Table of Contents

interim measures, including, among other things, that Cablecom transmit
the digital television signals of Teleclub on the Cablecom network, and stating
that any appeal of the preliminary order would not have the effect of
suspending the interim orders contained therein. The Appeals Commission in
Competition Matters has confirmed such interim measures. Cablecom has chosen
not to pursue a further appeal. As a result, on December 16, 2002, Cablecom
commenced distribution of Teleclubs digital signal over Cablecoms network.
In the main proceeding, Teleclub is asking the Competition Commission to issue
a permanent order pursuant to which Cablecom should be forced to distribute
its programs in the manner described above. In addition, Teleclub is also
asking the Competition Commission to set conditions, including prices, that
Cablecom should be permitted to impose on Teleclub in connection with the
distribution of its programs.

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

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

On April 30, 2003, NTL Delaware, together with its subsidiaries NTL Sweden
SPV Inc. and Nogenta Swedish Acquisition Holding B.V., entered into a
settlement agreement with B2 and the other principal shareholders relating to,
among other things, the transfer of certain securities in B2. Under this
settlement agreement, the NTL Europe parties have agreed to transfer their
interest in B2 to the other shareholders in exchange for approximately $375,000
in cash or certain securities of a B2 affiliate and mutual releases among the
parties to the dispute. In connection with the mutual releases, the settlement
agreement provides that B2 and the other principal shareholders will withdraw,
or otherwise assist NTL Delaware in obtaining bankruptcy court denial of, the
proofs of claim filed by B2 and the other principal shareholders in the
bankruptcy court. The closing of the transaction is subject to customary
closing conditions, but the NTL Europe releases are effective unless the NTL
Europe parties breach their respective obligations under the agreement.

On May 1, 2003, Owl Creek Asset Management, L.P., one of Old NTLs
creditors, filed an amended complaint against CRT Capital Group LLC, New NTL
and us in U.S. Bankruptcy Court for the Southern District of New York. The
amended complaint concerns certain when-issued trades of New NTLs common
stock made by Owl Creek with CRT prior to a subsequent modification of Old
NTLs plan of reorganization. Under the modified plan, Old NTLs creditors
were entitled to receive only one-fourth the number of shares of New NTL common
stock contemplated prior to the modification. Therefore, certain holders of
New NTL common stock sold more stock on the when-issued market than they
ultimately received under the amended plan. On January 16, 2003, the
bankruptcy court entered an order providing that sellers of New NTLs common
stock on the when-issued market may settle such trades by reducing the number
of shares traded in each such transaction by 25% and increasing the per share
purchase price for such shares by 400%. The order provided that buyers in such
trades were required to accept such a settlement, but the order was dissolved
on February 5, 2003. In addition to its
-23-Table of Contentsclaims against CRT, Owl Creek has asserted claims against New NTL and us
for breach of fiduciary duty, gross negligence, breach of contract, promissory
estoppel, contribution and indemnification, alleging that Old NTLs creditors
should have been better informed of the changes to New NTLs common stock under
the plan. Since the securities that are the subject of the complaint are those
of New NTL, we do not believe we have any material exposure with respect to
this claim.
Item 4. Submission of Matters to a Vote of Security HoldersNo matters were submitted to a vote of our security holders through the
solicitation of proxies or otherwise during the fourth quarter ended December
31, 2002.PART II



Item 5. Market for Registrants Common Equity and Related Stockholder Matters(a)
    
    Market InformationUntil the consummation of the reorganization plan on January 10, 2003, Old
NTLs common stock traded during 2001 and until March 26, 2002 on the New York
Stock Exchange and then on the OTC Bulletin Board. Following consummation of
the reorganization plan, Old NTLs securities, including its common stock, were
cancelled and we issued new common stock and Preferred Stock. Our common stock
and Preferred Stock, both of which were first issued on
January 10, 2003, initially traded
on the OTC Bulletin Board under the symbols NTEU.OB and
NTEP.OB, respectively, but, due to the late filing of
this Form 10-K, have been changed to NTEUE.PK and
NTEPE.OB, respectively.In accordance with applicable reporting requirements, the quotations below
reflect the high and low closing sales prices for the common stock of Old NTL
since January 1, 2001 as traded on the New York Stock Exchange and, as of March
26, 2002, on the OTC Bulletin Board. The OTC Bulletin Board quotations below
reflect inter-dealer prices, without retail mark-up, mark-down or commission
and may not necessarily represent actual transactions. Pursuant to the
reorganization plan, all of Old NTLs common stock was cancelled. As a result,
the following stock prices do not relate to the value of our common stock in
any way.

|            |  |                      |       |     |  |   |       | 
|----------- |  | -------------------- | ----- | --- |  | - | ----- | 
|            |  | Old NTL Common Stock
|            |  |                     
|            |  | High                 |       | Low
|2002:       |  |                      |       |     |  |   |       | 
|1st Quarter |  | $                    | 0.98  |     |  | $ | 0.17  | 
|2nd Quarter |  |                      | 0.29  |     |  |   | 0.03  | 
|3rd Quarter |  |                      | 0.05  |     |  |   | 0.01  | 
|4th Quarter |  |                      | 0.04  |     |  |   | 0.01  | 
|2001:       |  |                      |       |     |  |   |       | 
|1st Quarter |  |                      | 39.20 |     |  |   | 22.75 | 
|2nd Quarter |  |                      | 32.40 |     |  |   | 11.69 | 
|3rd Quarter |  |                      | 13.79 |     |  |   | 2.00  | 
|4th Quarter |  |                      | 4.55  |     |  |   | 0.62  | 

-24-



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|(b) |  | Holders
|--- |  | -------

Our transfer agent informed us that, as of May 15, 2003, there were 346
holders of record of our common stock. This number does not include beneficial
owners who may hold their shares in street name.



|(c) |  | Dividends
|--- |  | ---------

We have not paid any dividends on our common stock and we do not
anticipate paying any dividends in the foreseeable future. However, subject to
our having sufficient funds legally available, we do anticipate paying
dividends on the Preferred Stock.

The closing sales price for our common stock on April 30, 2003 was $0.055,
as reported by the OTC Bulletin Board.



|(d) |  | Securities authorized for issuance under equity compensation plans
|--- |  | ------------------------------------------------------------------

The reorganization plan provides that the compensation committee of our
board of directors is authorized to adopt a management incentive plan. We
adopted such a plan on January 10, 2003 and reserved 2,000,000 shares of our
common stock. However, we currently have no plans to issue any securities
under this plan. All options, warrants or other securities outstanding under
any of the Old NTL plans existing on or before January 10, 2003 were cancelled
in the bankruptcy proceedings.



|(e) |  | Sales of unregistered securities
|--- |  | --------------------------------

On January 10, 2003, the effective date of the reorganization plan, we
authorized the issuance of 19,668,777 shares of our common stock (19,657,433 of
which were outstanding as of May 21, 2003) and 6,864,000 of our Preferred Stock
(6,862,193 of which were outstanding as of May 21, 2003) to certain former
creditors and stockholders of Old NTL and its subsidiaries in reliance on the
exemption from registration afforded by section 1145 of the U.S. Bankruptcy
Code. These shares of common stock and Preferred Stock represent all of our
shares of capital stock. We received no proceeds from the issuance of such
shares.

All securities of Old NTL were cancelled in the reorganization plan as of
January 10, 2003.




Item 6. Selected Financial Data

Our selected consolidated financial information presented below, under the
captions Income Statement Data for the years ended December 31, 2002, 2001,
2000, 1999 and 1998, and Balance Sheet Data at December 31, 2002, 2001, 2000,
1999 and 1998, were derived from our consolidated financial statements audited
by Ernst & Young LLP. This information should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
annual report.

As discussed elsewhere in this Form 10-K, on May 8, 2002, Old NTL and
certain of its subsidiaries as of that time each filed a prearranged joint
reorganization plan under Chapter 11 of the U.S. Bankruptcy Code. Old NTLs
operating subsidiaries were not included in the Chapter 11 filing. The
reorganization plan became effective on January 10, 2003 at which time Old NTL
emerged from Chapter 11 reorganization.

On January 10, 2003, the company then known as NTL Incorporated emerged
from bankruptcy protection and consummated its reorganization plan. Through
this reorganization plan, Old NTL was
-25-Table of Contentsseparated into two independent companies, effective January 10, 2003. One
company, which assumed the name NTL Incorporated, holds substantially all of
Old NTLs assets in the United Kingdom and Ireland. Our company, which assumed
the name NTL Europe, Inc., is the other entity that was created and we hold
various assets in Europe and elsewhere. New NTL is an independent entity which
is no longer owned by or affiliated with us. New NTL has been accounted for as
a discontinued operation beginning with the quarter ended September 30, 2002
and, accordingly, it is excluded from assets and liabilities of continuing
operations and from results of continuing operations for the five years ended
December 31, 2002.Our financial statements include amounts prior to January 10, 2003 that
have been derived from the financial statements and accounting records of Old
NTL using the historical results of operations and historical basis of the
assets and liabilities of our businesses, including Cablecom. However, as
described elsewhere in this Form 10-K, we anticipate that, in the near future,
the results of Cablecom will no longer be reported as part of our consolidated
results of operations since we will hold little, if any, equity in Cablecom
after its restructuring or filing for insolvency proceedings. Therefore, the
historical financial statements of Old NTL for periods prior to January 10,
2003 are not particularly meaningful to our current and anticipated future
business and should not be relied upon as indicative of our future performance.

|                                            |                                     |          |          |          |   |          |                                              |          |   |          |          |        |   |   |        |       |   |   |        |       |  
|------------------------------------------- | ----------------------------------- | -------- | -------- | -------- | - | -------- | -------------------------------------------- | -------- | - | -------- | -------- | ------ | - | - | ------ | ----- | - | - | ------ | ----- | -
|                                            |                                     |          |          |          |   |          | Years ended December 31,                     |          |   |          |         
|                                            |                                     |          |         
|Income Statement Data                       |                                     | 2002 (1) |          | 2001 (2) |   | 2000 (3) |                                              | 1999 (4) |   | 1998 (5)
|                                            |                                     |          |          |          |   |          |                                              |          |   |         
|                                            |                                     |          |          |          |   |          | (dollars in millions, except per share data) |          |   |          |         
|Revenues                                    |                                     | $        | 435.9    |          |   | $        | 391.6                                        |          |   | $        | 226.8    |        |   | $ | 47.0   |       |   | $ |       |      
|Operating (loss)                            |                                     |          | (1,065.8 | )        |   |          | (1,511.4                                     | )        |   |          | (375.7   | )      |   |   | (31.5  | )     |   |   |       |      
|(Loss) from continuing operations           |                                     |          | (1,348.6 | )        |   |          | (2,368.4                                     | )        |   |          | (556.2   | )      |   |   | (19.2  | )     |   |   |       |      
|(Loss) from discontinued operations         |                                     |          | (2,106.3 | )        |   |          | (11,872.9                                    | )        |   |          | (2,407.5 | )      |   |   | (716.5 | )     |   |   | (534.6 | )    
|Net (loss)                                  |                                     |          | (3,454.9 | )        |   |          | (14,241.3                                    | )        |   |          | (2,963.7 | )      |   |   | (735.7 | )     |   |   | (534.6 | )    
|Preferred stock dividends                   |                                     |          | (145.1   | )        |   |          | (325.7                                       | )        |   |          | (194.0   | )      |   |   | (73.7  | )     |   |   | (18.8  | )    
|Net (loss) available to common shareholders |                                     |          | (3,600.0 | )        |   |          | (14,567.0                                    | )        |   |          | (3,157.7 | )      |   |   | (809.4 | )     |   |   | (553.4 | )    
|Basic and diluted net loss per share:       |                                     |          |          |          |   |          |                                              |          |   |          |          |        |   |   |        |       |   |   |        |      
|                                            | (Loss) from continuing operations   |          | $        | (5.40    | ) |          | $                                            | (9.76    | ) |          | $        | (3.46  | ) |   | $      | (0.78 | ) |   | $      | (0.30 | )
|                                            | (Loss) from discontinued operations |          |          | (7.62    | ) |          |                                              | (43.02   | ) |          |          | (11.08 | ) |   |        | (6.00 | ) |   |        | (8.30 | )
|                                            | Net (loss) per common share         |          | $        | (13.02   | ) |          | $                                            | (52.78   | ) |          | $        | (14.54 | ) |   | $      | (6.78 | ) |   | $      | (8.60 | )
|Weighted average shares                     |                                     |          | 276.6    |          |   |          | 276.0                                        |          |   |          | 217.1    |        |   |   | 119.4  |       |   |   | 64.4   |      

|                                  |  |                 |          |          |  |                       |          |          |  |          |          |  |  |   |          |  |  |   |         | 
|--------------------------------- |  | --------------- | -------- | -------- |  | --------------------- | -------- | -------- |  | -------- | -------- |  |  | - | -------- |  |  | - | ------- | 
|                                  |  | At December 31,
|                                  |  |                
|Balance Sheet Data                |  | 2002 (1)        |          | 2001 (2) |  | 2000 (3)              |          | 1999 (4) |  | 1998 (5)
|                                  |  |                 |          |          |  |                       |          |          |  |         
|                                  |  |                 |          |          |  | (dollars in millions) |          |          |  |          |          |  |  |  
|Working capital (deficiency)      |  | $               | (7,539.8 | )        |  | $                     | (6,485.0 | )        |  | $        | 9,611.3  |  |  | $ | 3,101.8  |  |  | $ |        | 
|Fixed assets, net                 |  |                 | 1,682.1  |          |  |                       | 1,494.0  |          |  |          | 1,568.5  |  |  |   | 8.9      |  |  |   |        | 
|Total assets                      |  |                 | 15,849.4 |          |  |                       | 16,858.9 |          |  |          | 28,779.8 |  |  |   | 12,445.3 |  |  |   | 6,194.1 | 
|Long-term debt                    |  |                 |         |          |  |                       |         |          |  |          | 3,200.8  |  |  |   | 1,200.0  |  |  |   |        | 
|Redeemable preferred stock        |  |                 |         |          |  |                       | 2,773.7  |          |  |          | 2,083.2  |  |  |   | 141.8    |  |  |   | 124.1   | 
|Shareholders equity (deficiency) |  |                 | (9,899.8 | )        |  |                       | (6,542.4 | )        |  |          | 8,367.4  |  |  |   | 2,136.9  |  |  |   | 355.2   | 



---

|(1) |  | Since May 8, 2002, the date that Old NTL and certain of Old NTLs
subsidiaries filed the reorganization plan under Chapter 11 of the U.S.
Bankruptcy Code, Old NTL has prepared its consolidated financial
statements in accordance with the American Institute of Certified Public
Accountants Statement of Position 90-7, Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code (referred to as SOP 90-7 in
this annual report). Pursuant to SOP 90-7, beginning on May 8, 2002, Old
NTL discontinued accruing interest expense on certain of its prepetition
obligations. Old NTLs reported interest expense in 2002 excludes $223.5
million of
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|    |  | contractual interest for the period from May 8, 2002 to December 31,
2002. Also in 2002, recapitalization items, net were $4.8 million.
Recapitalization items include all transactions incurred as a result of
our Chapter 11 reorganization. Recapitalization items, net include $0.1
million for employee retention and $6.9 million for financial advisory,
legal, accounting and consulting costs. These costs are net of $2.2
million of interest earned on accumulated cash since the Chapter 11
filing on May 8, 2002.                                                                                                                                                            
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | In addition, in 2002, Old NTL recorded asset impairment charges of $854.3
million consisting of non-cash charges to write-down goodwill.
Amortization expense in 2002 decreased from amounts in prior periods due
to the adoption of Statement of Financial Accounting Standards (referred
to as SFAS) No. 142 on January 1, 2002 which ended the amortization of
goodwill and other indefinite lived intangible assets.                                                                                                                                                                                                                                                                  
|   
|    |  | The working capital deficiency in 2002 is primarily the result of (a) the
liabilities for discontinued operations exceeding their related net
assets by $4,988.1 million and (b) the classification of
$2,719.3 million
outstanding debt as a component of current liabilities. Long-term debt
and redeemable preferred stock at December 31, 2002 exclude $1,300
million and $2,853 million, respectively, that is included in liabilities
subject to compromise.                                                                                                                                                                                                                        
|   
|(2) |  | Old NTLs operating loss in 2001 includes asset impairment charges of
$912.1 million for non-cash charges associated with the write-down of
Cablecom goodwill and various long-term assets at Premium TV. The loss
from discontinued operations, for the twelve months ended December 31,
2001, includes asset impairment charges of $8,160.6 million.                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | The working capital deficiency in 2001 is primary the result of (a) the
liabilities for discontinued operations exceeding their related net
assets by $3,095.2 million and (b) the reclassification of all
outstanding debt ($3,460.2 million) as a component of current
liabilities.                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(3) |  | The increase in revenues in 2000 over the prior year primarily reflects
the effects of the acquisition of the Cablecom group on March 28, 2000.
The increase in the operating loss and loss from continuing operations,
for 2000 over the prior year, was primarily the result of the Cablecom
acquisition and reflects the costs of the amortization of various
intangible assets, including customer lists and license acquisition costs,
as well as the effect of higher interest expense associated with the
acquisition.                                                                                                                                                             
|   
|    |  | The working capital position in 2000 is primarily the result of the net
assets for discontinued operations exceeding their related liabilities by
$9,128.3 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(4) |  | Revenues in 1999 reflect Old NTLs operations, primarily in the United
Kingdom and France, which began during that year. The positive working
capital position at December 31, 1999 is the result of (a) the net assets
for discontinued operations exceeding their related liabilities by
$1,155.0 million and (b) Old NTLs cash, cash equivalents and marketable
securities totaling $1,851.1 million, which was unusually high, a result,
in part, of the net proceeds from the issuance in December 1999 of an
aggregate of $1,200 million of 53/4% convertible notes in anticipation
of the pending acquisition of Cable & Wireless, an acquisition which was
completed in May 2000.
|   
|(5) |  | All of Old NTLs activity in 1998 related to its discontinued operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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

The following discussion of our financial condition and results of
operations should be read in conjunction with our financial statements and the
related notes in Item 8. This discussion contains forward-looking statements.
Please see Risk Factors  Actual results may turn out to be materially
different from any forward-looking statements included or incorporated by
reference in this annual report on Form 10-K.

Overview



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



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



| |  |  | We currently have minority interests in the following operating entities:
| |  |  | -------------------------------------------------------------------------

| 
|-
|
| 
|
| 
|
| 
|

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

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Separation from NTL Incorporated; Discontinued Operations

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

With the separation of Old NTL into two entities, the majority of the
significant assets and holdings of Old NTL were retained by New NTL.
Generally, other than Cablecom, (which itself is being restructuctured, See
Recent Developments  Cablevision GmBH) our assets are not particularly
material compared to those of New NTL. Further, as discussed above, our board
of directors and management will explore the strategic and financial
alternatives available to us. Accordingly, the historical financial statements
of Old NTL and New NTL for periods prior to January 10, 2003, are not
particularly meaningful to our current and anticipated future business and
should not be relied upon as indicative of our future performance.

As described in more detail in Recent Developments  Cablecom GmbH,
Cablecom has approximately CHF 3,792 million in bank debt (which includes
recently accrued interest payments) maturing on the business day following May
31, 2003 (with an additional automatic extension to June 30, 2003 under certain
circumstances), and insufficient resources to satisfy such obligation. In
addition, Cablecom and two of its subsidiaries are overindebted under Swiss
law and, accordingly, may be required to file for insolvency proceedings in
Switzerland. Cablecom and its lenders have been in discussions regarding a
complete financial restructuring of Cablecom which will, among other things,
reduce the amount of bank debt outstanding, extend the maturity date thereof
and resolve the Swiss overindebtedness issue. In the event that such
negotiations are unsuccessful, we expect to be deprived of all of our ownership
interest in Cablecom in the near future. Further, even if such negotiations
are successful, we expect to be left with no more than a small minority
interest in Cablecom. Accordingly, we anticipate that, in the near future, the
results of Cablecom will no longer be reported as part of our consolidated
results of operations. In that regard, it should also be noted that, in
accordance with the terms of the existing Cablecom credit agreement, no
dividends, distributions or other payments have ever been or will be made by
Cablecom to us. Further, the lenders under Cablecoms credit facility have no
legal recourse to any assets of the NTL Europe group, other than to the shares
of Cablecom, certain assets of the Cablecom group and certain assets of our
subsidiaries which hold, directly or indirectly, the shares of the Cablecom
group.

The businesses operated by Old NTL which have been retained by New NTL are
reported as discontinued operations in our financial statements. We believe
that, due to the change in business scope, the discontinued operations, the
anticipated loss of a controlling interest at Cablecom and the changing climate
for our other business units, period-to-period comparisons of our operations
are not meaningful and should, likewise, not be relied upon as indicative of
future performance. Our prospects must be considered in light of the risk,
expenses and difficulties of businesses of a scale substantially smaller than
those of Old NTL. We may not be successful in addressing such risks and
difficulties.

Our financial statements include amounts prior to January 10, 2003 that
have been derived from the financial statements and accounting records of Old
NTL using the historical results of operations and historical basis of the
assets and liabilities of our businesses. As a result, our financial
statements that were derived from Old NTLs financial records may not
necessarily reflect our results of operations, financial position and cash
flows in the future or what our results of operations, financial position and
cash flows would have been had we been a stand-alone company.

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Application of Critical Accounting Policies and Estimates

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



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

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Results of Operations

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

Years Ended December 31, 2002 and 2001

Revenue increased 11.3% to $435.9 million in 2002 from $391.6 million in
2001. The increase in revenue is primarily due to a rate increase by Cablecom
which was subsequently rolled back for 2003 and 2004, when Cablecom reached a
new pricing agreement with government regulators in Switzerland. Cablecom also
benefited from an increase in broadband and digital television subscribers and
business systems customers. The overall increase in revenue was achieved
despite a reduction in revenue at both Premium TV and NTL Asia. Premium TVs
revenues reflected the loss of ITV Digitals programming revenue for British
Eurosport when ITV Digital filed for bankruptcy, and reductions in revenue due
to a change in its agreement with the Football League (which altered various
terms of the financial aspects of the joint venture with the league). Revenue
in NTL Asia also decreased due to the worldwide contraction of
telecommunications infrastructure spending. During 2002 and 2001, Cablecom
accounted for 92% and 84%, respectively, of our consolidated revenue.

Operating expenses (excluding depreciation, which is discussed below)
increased by $5.0 million to $175.4 million in 2002 from $170.4 million in
2001. The increase in operating expenses is primarily due to the growth of
Cablecoms operating expenses as a result of efforts to expand premium
services, including digital television and broadband internet. Cablecoms
operating expenses as a percentage of its revenue decreased to 35.2% in 2002
from 37.1% in 2001 as a result of a basic cable television price increase
(which was rolled back at the end of the year) and a higher margin product mix
for the rest of its services. Premium TVs operating expenses decreased as a
result of staffing cutbacks and the reduction in media rights charges as rights
contracts expired. During 2002 and 2001, Cablecom accounted for 81% and 72%,
respectively, of our consolidated operating expenses.

Selling, general and administrative expenses decreased 20.9% to $138.8
million in 2002 from $178.0 million in 2001. The decrease in selling, general
and administrative expenses reflects Premium TVs cost reduction program during
2002 and the impact of the carrying value of its internet platform. Premium TV
amortizes its internet and development costs over a three-year period and
incurred large provisions in 2001 for the internet platform which was developed
and launched during late 1999 and early 2000. The charges incurred in respect
of these development costs decreased in 2002 from a peak in 2001. Cablecoms
selling, general and administrative expenses increased by approximately 11% (or
$10 million) due to the build up of staff to support its growth in digital
television and broadband internet services.

Asset impairments in both 2002 and 2001 relate to intangible and other
long-term assets. Asset impairments decreased in 2002 by 6.3% to $854.3
million from $912.1 million in 2001. Of the 2002 amount, impairment charges of
$838.8 million were associated with the goodwill impairment at Cablecom and
$15.5 million related to the write-down of various long-term assets at Premium
TV. Of the 2001 amount, impairment charges of $762.7 million were associated
with the goodwill impairment at Cablecom, and $149.4 million related to the
write-down of various long-term assets at Premium TV.

Other charges decreased 71.3% to $3.5 million in 2002 from $12.2 million
in 2001. The decrease in other charges reflects lower costs in 2002 related to
Old NTLs information technology integration project.

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Corporate expenses decreased 72.9% to $11.5 million in 2002 from $42.5
million in 2001. The decrease in corporate expenses reflects the significant
decrease in general corporate spending resulting from a reduction of staff and
a reduction of legal, accounting and other professional fees and the allocation
of expenses in connection with the reorganization.

Depreciation expense increased 44.2% to $222.7 in 2002 from $154.4 million
in 2001. Most of the increase was attributable to the increase in Cablecoms
fixed asset base of telecommunications and television equipment as it upgraded
consumer lines for digital television, broadband connectivity and telephone
service over Cablecoms platform.

Amortization expense decreased 78.0% to $95.5 million in 2002 from $433.4
million in 2001 due to the adoption of SFAS No. 142 on January 1, 2002 which
ended the amortization of goodwill and other indefinite lived intangible
assets.

Interest income and other income and expense, net was an expense of $11.0
million in 2002 compared to income of $20.4 million in 2001. The change is
primarily due to impairment losses recorded for investments carried on the cost
basis of accounting and an increase in expenses of a miscellaneous nature.

Interest expense decreased 20.0% to $156.1 million in 2002 from $195.1
million in 2001 as a result of the application of AICPA Statement of Position
90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code (SOP 90-7). Pursuant to SOP 90-7, interest expense is included in the
results of operations only to the extent that it will be paid during the
proceeding or that it is probable that it will be an allowed priority, secured
or unsecured claim. In accordance with the Plan, Old NTL did not make interest
payments on its outstanding publicly traded notes which were subsequently
cancelled upon the effective date of the Plan. The decrease also reflected
lower interest rates on the Cablecom credit facility.

Share of losses from equity investments decreased 61.9% to $251.3 million
in 2002 from $660.0 million in 2001. The decrease in share of losses from
equity investments resulted primarily due to the inclusion in 2001 of a $438.6
million asset impairment charge for equity investments.

Other gains (losses) was a gain of $3.0 million for 2002, from the sale of
excess fixed assets. The loss in the prior year of $58.9 million related to the
loss on the 1G transaction in France.

Foreign currency transaction gains (losses) was a gain of $9.3 million in
2002 compared to a loss of $14.3 million in 2001. The change is primarily due
to the effect of changes in exchange rates on receivables denominated in
non-U.S. dollar currencies held by subsidiaries whose functional currency is
the U.S. dollar.

Recapitalization items, net was $4.8 million in 2002 including $7.0
million for financial advisor, legal, accounting and consulting costs net of
$2.2 million of interest earned on accumulated cash since the bankruptcy filing
on May 8, 2002.

Income tax benefit increased 151.7% to $128.1 million in 2002 from $50.9
million in 2001, primarily due to the recognition of tax benefits for operating
losses, to the extent that the operating losses offset existing deferred tax
liabilities.

Loss from discontinued operations decreased to $2,106.3 million in 2002
from $11,872.9 million in 2001. Losses from discontinued operations includes
NTL Communications Corp. and subsidiaries, NTL Australia and Cablecoms
consumer electronics retail stores referred to as Rediffusion. Their combined
-32-Table of Contents

operations generated the net losses for both periods presented. Old NTL
reported a loss (net of tax) of $5.7 million, reflecting a gain of $7.5 million
on its sale of NTL Australia to the Macquarie Communications Infrastructure
Holding Pty Limited for the equivalent of US$434.9 million, in an all cash
transaction, and a loss on the sale of Rediffusion of $13.2 million. The net
losses on the discontinued operations of NTL Communications Corp. were $2,093.4
in 2002 and $11,850.9 in 2001. Reduction in the loss is primarily attributed to
the reduction in the asset impairment charges in 2002 as compared to 2001.

Years Ended December 31, 2001 and 2000

Revenue increased 72.7% to $391.6 million in 2001 from $226.8 million in
2000. The increase in revenue is primarily due to the full year effect of
Cablecom results in 2001, which was acquired on March 28, 2000, combined with
the improvements in Cablecoms product offerings, and increases in the number
of broadband, digital television and business customers. Revenues at Premium
TV more than tripled from a low base in 2000, the year in which Premium TV
launched its first internet websites for football clubs in the United Kingdom.
NTL Lanbase and NTL Asia also contributed to the large growth in revenues. NTL
Lanbase was acquired in 2000 and NTL Asia grew revenues significantly. During
2001 and 2000, Cablecom accounted for 84% and 89%, respectively, of our
consolidated revenue.

Operating expenses (excluding depreciation, which is discussed below)
increased 91.7% to $170.4 million in 2001 from $88.9 million in 2000. The
increase in operating expenses is primarily due to the impact of the full year
effect of Cablecoms operations for 2001. Cablecoms expenses, including
network expenses, increased approximately 24% as a result of the increases in
Cablecoms product offering and customers, including digital services and
broadband internet. Cablecoms operating expenses as a percentage of revenue
increased to 37.1% in 2001 from 29.5% in 2000. Premium TVs expenses increased
during 2001 as its operations expanded from a low base the year earlier.
During 2001 and 2000, Cablecom accounted for 72% and 67%, respectively, of our
consolidated operating expenses.

Selling, general and administrative expenses increased 72.6% to $178.0
million in 2001 from $103.1 million in 2000. Premium TVs selling, general and
administrative expenses accounted for a majority of the increase, reflecting
the expansion of its internet business and the establishment of its Classic
Sports Channel operation. The basic internet platform was developed initially
by outside consultants in 2000. Premium TV expanded its own technical staff
during 2001. As a result, combined consulting and staff expenses rose
significantly. Selling, general and administrative expenses rose modestly at
Cablecom in 2001 to support expanded operations, particularly for digital
television and broadband services.

Asset impairments in 2001 relate to intangible assets and investments in
affiliates. Asset impairment charges of $912.1 million in 2001 related to
goodwill charges at Cablecom in the amount of $762.7 million and the write-down
of various long-term assets at Premium TV in the amount of $149.4 million. No
asset impairments were required in 2000.

Other charges were $12.2 million in 2001 and related primarily to Old
NTLs costs associated to integrating information technology projects at
Cablecom during 2001. There were no other charges in 2000.

Corporate expenses increased 78.6% to $42.5 million in 2001 from $23.8
million in 2000. The increase in corporate expenses reflects an increase in
general corporate spending including an increase in staff and an increase in
legal, accounting and other professional fees, to manage the growing business
units within Old NTL.

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Depreciation expense increased 76.7 % to $154.4 million in 2001 from $87.4
million in 2000. Cablecoms depreciation charges increased reflecting heavy
investment in telecommunications and cable television equipment as well as the
inclusion of a full year of Cablecoms operations. Premium TVs depreciation
also increased reflecting the investment made in 2000 and 2001 to build out its
internet platform.

Amortization expense increased 44.8% to $433.4 million in 2001 from $299.3
million in 2000 primarily due to the full year effect of the amortization of
Cablecoms intangible assets.

Interest income and other income and expenses, net, decreased 55.2% to
$20.4 million in 2001 from $45.5 million in 2000, primarily due to the
reduction in interest income over the period.

Interest expense increased 39.7% to $195.1 million in 2001 from $139.7
million in 2000, reflecting the full year effect of the interest expense on
Cablecoms debt.

Share of losses from equity investments increased substantially to $660.0
million in 2001 from $46.7 million in 2000. The increase resulted primarily
from the assets impairment charge of $438.6 million, recorded in the fourth
quarter of 2001, for Old NTLs investments accounted for on the equity basis.

Other losses were $58.9 million in 2001, which related to the loss on the
1G transaction in France during 2001. There were no other losses in 2000.

Foreign currency transaction losses decreased 77.1% to $14.3 million in
2001 from $62.5 million in 2000. The change is primarily due to the effect of
changes in exchange rates on receivables denominated in non-U.S. dollar
currencies held by subsidiaries whose functional currency is the U.S. dollar.

Income tax benefit increased 122.3% to $50.9 million in 2001 from $22.9
million in 2000 primarily due to the recognition of tax benefits for additional
operating losses, to the extent that the operating losses offset existing
deferred tax liabilities.

Loss from discontinued operations increased to $11,872.9 million in 2001
from $2,407.5 million in 2000. Loss from discontinued operations includes NTL
Communications Corp. and subsidiaries, NTL Australia and Rediffusion. Losses
identified with NTL Communications Corp. were $11,850.9 million for 2001 and
$2,388.1 million for 2000. In 2001, this loss included an impairment charge of
$8.160.6 million.

Liquidity and Capital Resources

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

We are primarily a holding company for the stock of our subsidiaries, with
no material independent source of cash proceeds. During 2003, we do not
anticipate receiving any material cash proceeds from our subsidiaries.
Accordingly, we expect to fund our operations primarily out of our cash of
approximately $63 million and our subsidiaries cash of approximately $11
million remaining after the consummation of the reorganization plan. During
2003, we do not anticipate borrowing any material
-34-Table of Contents

amount of funds and we do not expect to issue any of our securities for
cash. Further, during 2003, we do not anticipate any material capital
expenditures.

As described in Notes 1, 2 and 22 to our consolidated financial
statements, we expect to either complete a restructuring of the debt and equity
of Cablecom, in the near future, which would result in a dilution of our
ownership interest to less then five percent or, if this restructuring is not
successful, to file for the insolvency of Cablecom in Switzerland, which would
result in our having no remaining ownership in Cablecom. In either of these
events, the lenders under Cablecoms credit facility would have no legal
recourse to any assets of the NTL Europe group, other than to the shares of
Cablecom, certain assets of the Cablecom group and certain assets of our
subsidiaries which hold, directly or indirectly, the shares of the Cablecom
group.

Our management and board will explore strategic and financial alternatives
available to us, including our possible liquidation, a going-private
transaction and the sale of our remaining assets. During 2003, our primary
expenses are expected to consist of operating expenses, including salaries,
professional fees, insurance and severance costs, as well as certain funding
obligations to certain of our subsidiaries of approximately $13 million. (See
Note 22  Commitments and Contingencies). Further, after reserving for
certain contingent liabilities, to the extent we have remaining funds legally
available, we intend to pay dividends on or redeem shares of our Preferred
Stock. The liquidation preference of Preferred Stock aggregates $343 million.
Accordingly, it is highly unlikely that common shareholders will ever receive
any distribution related to their shares.

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

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Contractual Obligations and Commercial Commitments

The following table includes aggregate information about our contractual
obligations as of December 31, 2002, as adjusted to give effect to our
emergence from Chapter 11 reorganization, and the periods in which payments are
due. The following table includes Cablecom which, as discussed elsewhere in
the Form 10-K, is not expected to be included in our consolidated results in
future periods. Cablecoms total long-term debt, operating lease commitments
and unconditional purchase obligations, included in the table below, were
$2,719.3 million, $30.8 million and $59.3 million, respectively.

|                                   |  |       |         |        |  |                       |         |       |  |         |      |       |  |   |      |  |  |   |      | 
|---------------------------------- |  | ----- | ------- | ------ |  | --------------------- | ------- | ----- |  | ------- | ---- | ----- |  | - | ---- |  |  | - | ---- | 
|                                   |  |       |         |        |  | Less than             |         | 1-3   |  | 4-5     |      | After
|Contractual Obligations            |  | Total |         | 1 Year |  | Years                 |         | Years |  | 5 Years
|                                   |  |       |         |        |  |                       |         |       |  |        
|                                   |  |       |         |        |  | (dollars in millions) |         |       |  |        
|Long-Term Debt                     |  | $     | 2,719.3 |        |  | $                     | 2,714.7 |       |  | $       | 1.0  |       |  | $ | 0.2  |  |  | $ | 3.4  | 
|Capital Lease Obligations          |  |       |        |        |  |                       |        |       |  |         |     |       |  |   |     |  |  |   |     | 
|Operating Leases                   |  |       | 32.7    |        |  |                       | 4.8     |       |  |         | 10.2 |       |  |   | 10.8 |  |  |   | 6.9  | 
|Unconditional Purchase Obligations |  |       | 121.8   |        |  |                       | 73.1    |       |  |         | 18.4 |       |  |   | 2.9  |  |  |   | 27.4 | 
|Other Long-Term Obligations        |  |       |        |        |  |                       |        |       |  |         |     |       |  |   |     |  |  |   |     | 
|                                   |  |       |         |        |  |                       |         |       |  |         |      |       |  |   |      |  |  |   |      | 
|Total Contractual Cash Obligations |  | $     | 2,873.8 |        |  | $                     | 2,792.6 |       |  | $       | 29.6 |       |  | $ | 13.9 |  |  | $ | 37.7 | 
|                                   |  |       |         |        |  |                       |         |       |  |         |      |       |  |   |      |  |  |   |      | 

The following table includes aggregate information about our commercial
commitments as of December 31, 2002. Commercial commitments are items that we
could be obligated to pay in the future. They are not required to be included
in the consolidated balance sheet. Cablecom had no other commercial
commitments outstanding at December 31, 2002.

|                               |  |           |      |           |  |                       |     |       |  |         |      |  |  |   |     |  |  |   |   | 
|------------------------------ |  | --------- | ---- | --------- |  | --------------------- | --- | ----- |  | ------- | ---- |  |  | - | --- |  |  | - | - | 
|                               |  | Total     |      |           |  |                       |     |       |  |         |      |  |  |   |     |  |  |  
|                               |  | Amounts   |      | Less than |  | 1-3                   |     | 4-5   |  | Over   
|Other Commercial Commitments   |  | Committed |      | 1 Year    |  | Years                 |     | Years |  | 5 Years
|                               |  |           |      |           |  |                       |     |       |  |        
|                               |  |           |      |           |  | (dollars in millions) |     |       |  |        
|Guarantees                     |  | $         |     |           |  | $                     |    |       |  | $       |     |  |  | $ |    |  |  | $ |  | 
|Lines of Credit                |  |           |     |           |  |                       |    |       |  |         |     |  |  |   |    |  |  |   |  | 
|Standby Letters of Credit      |  |           |     |           |  |                       |    |       |  |         |     |  |  |   |    |  |  |   |  | 
|Standby Repurchase Obligations |  |           |     |           |  |                       |    |       |  |         |     |  |  |   |    |  |  |   |  | 
|Other Commercial Commitments   |  |           | 27.3 |           |  |                       | 6.4 |       |  |         | 16.1 |  |  |   | 4.8 |  |  |   |  | 
|                               |  |           |      |           |  |                       |     |       |  |         |      |  |  |   |     |  |  |   |   | 
|Total Commercial Commitments   |  | $         | 27.3 |           |  | $                     | 6.4 |       |  | $       | 16.1 |  |  | $ | 4.8 |  |  | $ |  | 
|                               |  |           |      |           |  |                       |     |       |  |         |      |  |  |   |     |  |  |   |   | 

Recent Accounting Pronouncements

On December 31, 2002, we adopted the disclosure provisions of SFAS No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure.
SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition to SFAS No. 123s fair value method
of accounting for stock-based employee compensation. SFAS No. 148 also amends
the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, Interim
Financial Reporting.

In July, 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 replaces Emerging
Issues Task Force Issue No. 94-3 Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). SFAS No. 146 requires that a liability
for costs associated with an exit or disposal
-36-Table of Contents

activity is recognized when the liability is incurred. Under Issue No.
94-3, a liability for an exit cost as defined is recognized at the date of a
commitment to an exit or disposal plan. SFAS No. 146 is effective for exit or
disposal activities that are initiated after December 31, 2002. The adoption
of this standard is not expected to have a significant effect on our results of
operations, financial condition or cash flows.

In April 2002, the FASB issued SFAS No. 145, Recession of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections, which was effective for us on January 1, 2003. The adoption of
SFAS No. 145 will require any gain or loss recognized on the extinguishment of
debt to be classified as income or loss from continuing operations. Prior to
SFAS No. 145, gain or loss from the extinguishment of debt was classified as an
extraordinary item.

In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, effective for us on January 1,
2002. This Statement superceded SFAS No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and other
related accounting guidance. The adoption of this new standard had no effect
on the results of operations, financial condition or cash flows of Old NTL,
except that it required Old NTL to treat NTL Australia as a discontinued
operation beginning in the first quarter of 2002. We also accounted for NTL
Communications and Rediffusion as discontinued operations in the third and
fourth quarter of 2002, respectively.

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

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

Upon the adoption of SFAS No. 142, Old NTL performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separately from goodwill. Old
NTL determined that customer lists should continue to be classified separately
from goodwill and determined that no changes in the remaining useful lives of
the customer lists were required.

Old NTL also performed an evaluation for impairment of its goodwill and
license acquisition costs as of January 1, 2002 and determined that no
impairment charge was required, primarily due to the significant goodwill
impairment charge, recorded in the prior year.

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Estimated aggregate amortization expense for each of the five succeeding
fiscal years from December 31, 2001, as adjusted for our emergence from Chapter
11 reorganization, the adoption of fresh-start reporting and prior to the
anticipated deconsolidation of Cablecom, would be approximately $10 million for
each of the next five years.




Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

We are exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. We do not enter into derivative
financial instruments for trading or speculative purposes. In the past, Old
NTL entered into derivative financial instruments to hedge interest rates
related to certain of its floating interest rate debt. The counterparties were
major financial institutions.

Interest Rates

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

At December 31, 2002, Cablecom had zero cost collars, with a notional
amount of CHF 1,200.0 million, to hedge exposure to the floating interest rate
indebtedness incurred under the Cablecom term loan facility and revolving loan
facility.

The following table provides information about our floating interest rate
debt and derivative financial instruments that are sensitive to changes in
interest rates as of December 31, 2002, and as adjusted to give effect to our
emergence from Chapter 11 reorganization.

|                                                               |                           |                               |            |             |            |             |  |             |   |             |  |   |  |  |  |  |  | 
|-------------------------------------------------------------- | ------------------------- | ----------------------------- | ---------- | ----------- | ---------- | ----------- |  | ----------- | - | ----------- |  | - |  |  |  |  |  | 
|                                                               |                           |                               |            | Year Ending |            | Year Ending |  | Year Ending |   | Year Ending
|                                                               |                           |                               |            | 12/31/03    |            | 12/31/04    |  | 12/31/05    |   | 12/31/06   
|                                                               |                           |                               |            |             |            |             |  |             |   |            
|Long-term Debt Including Current Portion                       |                           |                               |            |             |            |             |  |             |   |             |  |   |  |  |  | 
|CHF                                                            |                           |                               |            |             |            |             |  |             |   |             |  |   |  |  |  | 
|                                                               |                           | Variable Rate                 |            | CHF3,755.0  |            |             |  |             |   |             |  |   |  |  |  | 
|                                                               |                           | Swiss LIBOR                   |            |             |            |             |  |             |   |             |  |   |  | 
|                                                               |                           | Average Interest Rate         |            | plus 2.5%   |            |             |  |             |   |             |  |   |  |  |  | 
|                                                               |                           | Average Forward Exchange Rate |            |             | .6227      |             |  |             |   |             |  |   |  |  |  |  |  | 
|Interest Rate Derivative Instruments Related to
Long-Term Debt |                           |                               |            |             |            |             |  |             |   |             |  |   |  |  |  | 
|Interest Rate Swaps                                            |                           |                               |            |             |            |             |  |             |   |             |  |   |  |  |  | 
|                                                               | Notional CHF Amount       |                               | CHF1,200.0 |             | CHF1,200.0 |             |  |            |   |             |  |  | 
|                                                               | Average Floor Strike Rate |                               |            | 3.27        | %          |             |  | 3.27        | % |             |  |   |  |  |  |  | 
|                                                               | Average Cap Strike Rate   |                               |            | 5.15        | %          |             |  | 5.15        | % |             |  |   |  |  |  |  | 

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|                                                               |                                                    |  |             |   |            |  |       |   |          |  |            |  |            |  |  |  | 
|-------------------------------------------------------------- | -------------------------------------------------- |  | ----------- | - | ---------- |  | ----- | - | -------- |  | ---------- |  | ---------- |  |  |  | 
|                                                               |                                                    |  | Year Ending |   |            |  |       |   |          |  |            |  | Fair Value
|                                                               |                                                    |  | 12/31/07    |   | Thereafter |  | Total |   | 12/31/02
|                                                               |                                                    |  |             |   |            |  |       |   |         
|Long-term Debt Including Current Portion                       |                                                    |  |             |   |            |  |       |   |          |  |            |  |            |  |  | 
|CHF                                                            |                                                    |  |             |   |            |  |       |   |          |  |            |  |            |  |  | 
|                                                               | Variable Rate                                      |  |             |   |            |  |       |   |          |  | CHF3,755.0 |  | CHF3,755.0
|                                                               | Average
Interest RateAverage Forward Exchange Rate |  |             |   |            |  |       |   |          |  |            |  |           
|Interest Rate Derivative Instruments Related to
Long-Term Debt |                                                    |  |             |   |            |  |       |   |          |  |            |  |            |  |  | 
|Interest Rate Swaps                                            |                                                    |  |             |   |            |  |       |   |          |  |            |  |            |  |  | 
|                                                               | Notional CHF Amount                                |  |             |  |            |  |       |  |          |  | CHF1,200.0 |  | CHF (41.6)
|                                                               | Average
Floor Strike RateAverage Cap Strike Rate   |  |             |   |            |  |       |   |          |  |            |  |            |  |  |  | 




Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data listed in Item 15(a)(1)
and (2) are included in this report beginning on page F-1.




Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.




PART III




Item 10. Directors and Executive Officers of the Registrant



| |                                                     
| | ----------------------------------------------------
| | Our directors and executive officers are as follows:

|                   |  |     |  |                                                
|------------------ |  | --- |  | -----------------------------------------------
|Name               |  | Age |  | Title                                          
|                   |  |     |  |                                                
|Jeffrey A. Brodsky |  | 44  |  | Chairman, President and Chief Executive Officer
|Michael J. Cochran |  | 39  |  | Director                                       
|H. Sean Mathis     |  | 56  |  | Director                                       
|John F. Gregg      |  | 39  |  | Chief Financial Officer and Treasurer          
|Bruno Claude       |  | 44  |  | Chief Operating Officer                        
|Robert A. Schmitz  |  | 62  |  | Vice President and Secretary                   
|Richard A. Spohn   |  | 54  |  | Vice President and Chief Accounting Officer    

Jeffrey A. Brodskyhas been our chairman, president and chief executive
officer since January 10, 2003. Since September 2000, Mr. Brodsky has been a
managing director of Quest Turnaround Advisors, L.L.C., providing turnaround
and crisis management services to senior management, boards of directors,
creditors and investors in need of solutions to complex business situations.
From March 1995 until September 2000, Mr. Brodsky was an independent crisis
management consultant and worked with Jay Alix & Associates and Alvarez &
Marsal, Inc. Representative assignments included (1) advising FINOVA Capital
Corporation in connection with its restructuring of $11.1 billion of debt, (2)
serving as interim management of Physician Computer Network, Inc. following the
discovery of accounting irregularities and (3) managing the shutdown of the
national operations of Viking Freight, Inc. on behalf of Caliber System, Inc.
Mr. Brodsky became a director of Comdisco Holdings, Inc., in August 2001.
Comdisco Holdings is a public company formed for the purpose of liquidating the
assets of Comdisco,

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Inc., a technology services company which, together with its fifty
affiliates, filed for bankruptcy in July 2001. He is also a director of TVMAX,
Inc., a private cable television operator.

Michael J. Cochranhas been one of our directors since January 10, 2003.
Since October 2002, Mr. Cochran has been a partner at White Oak Management
Partners, Inc., a private equity investment fund, at which he is involved in
all activities including deal origination, evaluation and execution and
portfolio management. From October 1997 until October 2002, Mr. Cochran was
the principal and managing director of Equity Capital Partners, Inc., an
Atlanta-based private equity fund primarily focused on acquiring, or making
substantial equity investments in, established middle-market operating
companies. From November 2001 until July 2002, he was also the crisis manager
and co-president of IMS Group, Inc. During his tenure at Equity Capital
Partners, Mr. Cochran was a member of the boards of directors of each of IMS
Group, Inc., First Call Wireless Services, Inc. and Lanscot Arlen Fabrics,
Inc., which were portfolio companies of Equity Capital Partners. Prior to
founding Equity Capital Partners in October 1997, Mr. Cochran was a corporate
attorney at Fried, Frank, Harris, Shriver & Jacobson in New York and London,
and at King & Spalding LLP in Atlanta.

H. Sean Mathishas been one of our directors since January 10, 2003.
Since March 2003, he has been a managing director at the investment-banking
firm of Morgan Joseph & Co. From September 2002 to March 2003, Mr. Mathis
served as a special advisor at the investment-banking firm of Financo, Inc.
Mr. Mathis is currently a director on the boards of Thousand Trails, Inc. and
Kasper A.S.L, Ltd. Previously, he was a director on the boards of ARCH
Wireless and Allied Digital Technologies, Corp. Until May 2002, Mr. Mathis was
the president of Litchfield Asset Holdings, an investment advisory company he
founded in 1983. From 1996 to 1999, Mr. Mathis was chairman of the board of
Allis Chalmers, Inc., an industrial manufacturer.

John F. Gregghas been our chief financial officer and treasurer since
January 10, 2003. Concurrently, Mr. Gregg has also served as the chief
financial officer of our subsidiary Cablecom. From June 1999 until January 10,
2003, Mr. Gregg was Old NTLs chief financial officer and senior vice
president. From June 1997 until June 1999, Mr. Gregg was Old NTLs vice
president of corporate development. He joined Old NTL in 1994 as managing
director of corporate development.

Bruno Claudehas been our chief operating officer since January 10, 2003.
From October 2000 until January 10, 2003, Mr. Claude was Old NTLs senior vice
president and chief operating officer. Since October 2000, he has also served
as chief operating officer of our subsidiary Cablecom. Prior to joining Old
NTL and Cablecom in October 2000, Mr. Claude was managing director of CEA
Capital Advisor, the affiliate of CEA responsible for the firms private equity
activities. CEA is an investment and merchant banking firm focused on the
media, new media, entertainment and communications industries. Prior to this,
Mr. Claude held various positions with Prime Cable, a company operating Cable
Television Systems across the United States.

Robert A. Schmitzhas been our vice president and secretary since January
10, 2003. Since September 2000, Mr. Schmitz has been a managing director at
Quest Turnaround Advisors and since March 1996, he has been the president of
Quest Capital, Ltd. Mr. Schmitz has over 30 years experience as a management
consultant, chief executive officer and private equity investor. From 1993 to
1997, Mr. Schmitz was a managing director of Trust Company of the West and a
senior partner of TCW Capital, the private equity group at TCW. Mr. Schmitz
joined TCW Capital with responsibility to turn around and sell troubled
investments in the portfolio.

Richard A. Spohnhas been our vice president and chief accounting officer
since January 10, 2003. From October 2002 until January 2003, Mr. Spohn was a
consultant engaged in the financial review of the Old NTL entities, which were
scheduled to become NTL Europe, Inc. From January 2001

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through October 2002, Mr. Spohn was an independent financial consultant. Prior
to 2001, Mr. Spohn spent 21 years with Ingersoll-Rand Company, an industrial
manufacturing company, where he had held the title of chief accounting officer
and was the companys controller of accounting and reporting from 1993 to 2000.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that our directors, executive officers and persons who own more than ten
percent (10%) of a registered class of our equity securities file with the
Securities Exchange Commission, and with each exchange on which the common
stock and preferred stock trades, initial reports of ownership and reports of
changes in ownership of common stock, preferred stock and other equity
securities of ours. Officers, directors and greater than ten percent (10%)
beneficial owners are required by the Securities Exchange Commissions
regulations to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representations that no other reports were required
during the fiscal year ended December 31, 2002, our officers, directors and
greater than ten percent (10%) beneficial owners complied with all Section
16(a) filing requirements applicable to them.




Item 11. Executive Compensation

As previously discussed in this Form 10-K, in connection with the
consummation of Old NTLs reorganization plan, substantially all of the assets
of Old NTL were separated into a separate company referred to as New NTL. We
continue to hold Old NTLs assets in Europe. Pursuant to SEC rules, we are
required to disclose certain information about the compensation of our
executive officers during the year ended December 31, 2002. During 2002, Old
NTL was a single company with a management that, with the exception of John F.
Gregg, did not continue with us following the reorganization. Therefore, the
following information is not indicative of our current management team and its
compensation structure.

The following table discloses compensation received by Old NTLs chief
executive officer, Old NTLs four most highly paid executive officers who were
serving as executive officers at the end of the fiscal year completed December
31, 2002 and another executive officer of Old NTL who would have been among
such executive officers had he been serving at the end of the fiscal year.

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Summary Compensation Table (1)

|                            |                           |                     |      |           |      |       |         |                     |         |                        |           |                 |         |            |        |              |   |       |   |            |   |            |   |              |           |  |   |           |   |  |         |        |        | 
|--------------------------- | ------------------------- | ------------------- | ---- | --------- | ---- | ----- | ------- | ------------------- | ------- | ---------------------- | --------- | --------------- | ------- | ---------- | ------ | ------------ | - | ----- | - | ---------- | - | ---------- | - | ------------ | --------- |  | - | --------- | - |  | ------- | ------ | ------ | 
|                            |                           |                     |      |           |      |       |         | Annual Compensation |         | Long-Term Compensation
|                            |                           |                     |      |           |      |       |         |                     |         |                       
|                            |                           |                     |      |           |      |       |         |                     |         |                        |           |                 |         |            |        |              |   |       |   | Awards(3)  |   | Payouts   
|                            |                           |                     |      |           |      |       |         |                     |         |                        |           |                 |         |            |        |              |   |       |   |            |   |           
|                            |                           |                     |      |           |      |       |         |                     |         |                        |           |                 |         |            |        |              |   |       |   | Restricted |   | Securities |   |              |           |  |   | All Other
|                            |                           |                     |      |           |      |       |         |                     |         |                        |           |                 |         |            |        | Other Annual |   | Stock |   | Underlying |   | LTIP       |   | Compensation
|Name and Principal Position |                           | Year                |      | Salary($) |      | Bonus |         | Compensation($)     |         | Awards(s)($)           |           | Options/SARs(#) |         | Payouts($) |        | ($)(4)      
|                            |                           |                     |      |           |      |       |         |                     |         |                        |           |                 |         |            |        |             
|Barclay Knapp (5)           |                           |                     | 2002 |           |      |       | 369,763 |                     |         |                        | 408,100   |                 |         |            |       |              |   |       |  |            |   |            |  |              |           |  |  |           |   |  | 7,334   |       
|                            |                           | President and Chief |      |           | 2001 |       |         |                     | 277,260 |                        |           |                 | 561,138 |            |        |              |  |       |   |            |  |            |   |              | 5,000,000 |  |   |           |  |  |         |        | 7,000  | 
|                            |                           | Executive Officer   |      |           | 2000 |       |         |                     | 243,833 |                        |           |                 | 249,813 |            |        |              |  |       |   |            |  |            |   |              | 7,250,000 |  |   |           |  |  |         |        | 17,200 | 
|George S. Blumenthal (5)    |                           |                     | 2002 |           |      |       | 369,763 |                     |         |                        | 408,100   |                 |         |            |       |              |   |       |  |            |   |            |  |              |           |  |  |           |   |  | 7,334   |       
|                            |                           | Chairman and        |      |           | 2001 |       |         |                     | 277,260 |                        |           |                 | 561,138 |            |        |              |  |       |   |            |  |            |   |              | 5,000,000 |  |   |           |  |  |         |        | 7,000  | 
|                            |                           | Treasurer           |      |           | 2000 |       |         |                     | 243,833 |                        |           |                 | 249,813 |            |        |              |  |       |   |            |  |            |   |              | 7,250,000 |  |   |           |  |  |         |        | 17,200 | 
|Richard J. Lubasch (5)      |                           |                     | 2002 |           |      |       | 467,290 |                     |         |                        | 470,000   |                 |         |            |       |              |   |       |  |            |   |            |  |              |           |  |  |           |   |  | 7,334   |       
|                            | Executive Vice            |                     |      | 2001      |      |       |         | 233,692             |         |                        |           | 384,875         |         |            |        |             |   |       |   |           |   |            |   |             |           |  |   |          |   |  |         | 7,000  |       
|                            | PresidentGeneral         |                     |      | 2000      |      |       |         | 205,517             |         |                        |           | 178,438         |         |            |        |             |   |       |   |           |   |            |   | 500,000      |           |  |   |          |   |  |         | 17,200 |       
|                            | Counsel and Secretary     |                    
|John F. Gregg               |                           |                     | 2002 |           |      |       | 499,500 |                     |         |                        | 450,000   |                 |         |            |       |              |   |       |  |            |   |            |  |              |           |  |  |           |   |  | 7,334   |       
|                            | Chief Financial           |                     |      | 2001      |      |       |         | 240,220             |         |                        |           | 591,250         |         |            |        |             |   |       |   |           |   |            |   |             |           |  |   |          |   |  |         | 7,000  |       
|                            | Officer and Senior        |                     |      | 2000      |      |       |         | 214,960             |         |                        |           | 228,125         |         |            |        |             |   |       |   |           |   |            |   | 1,000,000    |           |  |   |          |   |  |         | 17,200 |       
|                            | Vice President            |                    
|Stephen A. Carter (5)       |                           |                     | 2002 |           |      |       | 413,188 |                     |         |                        | 1,750,405 |                 |         |            | 18,723 | (2)          |   |       |  |            |   |            |  |              |           |  |  |           |   |  | 952,030 | (6)   
|                            | Senior Vice President and |                     |      | 2001      |      |       |         | 431,790             |         |                        |           | 278,112         |         |            |        |             |   |       |   |           |   |            |   |             |           |  |   |          |   |  |         | 6,738  |       
|                            | Chief Operating Officer   |                     |      | 2000      |      |       |         | 60,636              |         |                        |           |                |         |            |        |             |   |       |   |           |   |            |   | 400,000      |           |  |   |          |   |  |         | 38,384 |       
|Brett Richter (5)           |                           |                     | 2002 |           |      |       | 299,500 |                     |         |                        | 300,000   |                 |         |            |       |              |   |       |  |            |   |            |  |              |           |  |  |           |   |  | 7,334   |       
|                            | Senior Vice President    |                     |      | 2001      |      |       |         | 183,428             |         |                        |           | 319,750         |         |            |        |             |   |       |   |           |   |            |   |             |           |  |   |          |   |  |         | 7,000  |       
|                            | Finance                   |                     |      | 2000      |      |       |         | 138,884             |         |                        |           | 138,000         |         |            |        |             |   |       |   |           |   |            |   | 250,000      |           |  |   |          |   |  |         | 17,200 |       



---

|(1) |  | All amounts reflect the compensation paid to each listed employee in respect of such employees position with NTL Communications Corp. (now known as NTL
Incorporated), Old NTL and NTL Delaware, as the case may be.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Mr. Carters other annual compensation represents an automobile allowance he received from Old NTL.                                                                                                                  
|   
|(3) |  | Options granted were options to purchase shares of Old NTL. All such remaining options were cancelled upon the consummation of Old NTLs plan of reorganization on
January 10, 2003.                                 
|   
|(4) |  | All other compensation reflects Old NTLs match of employee contributions to a 401(k) plan or in the case of Stephen Carter, contributions to Mr. Carters UK
executive pension scheme.                              
|   
|(5) |  | Messrs. Knapp, Blumenthal, Lubasch and Richter terminated their employment with us effective January 10, 2003. Mr. Carter terminated his employment with Old NTL
effective November 30, 2002.                        
|   
|(6) |  | Includes severance payments in the amount of $901,500.                                                                                                                                                               

Equity Compensation Plan Information

All stock options to acquire Old NTLs equity securities are no longer
exercisable for, and no longer represent the right to purchase, Old NTLs
common stock because Old NTLs securities were cancelled pursuant to the
reorganization plan on January 10, 2003.

Management Incentive Plan

The reorganization plan provides that on or after the effective date, the
compensation committee of our board of directors is authorized to, and will,
adopt a management incentive plan. The purpose of

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the management incentive plan is to provide incentives to certain of our
employees and the employees of our subsidiaries, as well as to incentivize
their efforts in fostering and promoting our long term growth and performance
and to better align such employees interests with those of our stockholders.
Under the management incentive plan, options to purchase up to 10% of the
issued and outstanding shares of our common stock as of the effective date may
be granted from time to time to certain of our employees and the employees of
our subsidiaries. Accordingly, on the effective date pursuant to the
reorganization plan, we reserved two million shares of our common stock for
issuance under the management incentive plan. However, we have not issued, and
we currently have no plans to issue, any options under our 2003 stock option
plan.

Compensation of Directors

Standard Arrangements. Pursuant to the reorganization plan and as set
forth in our Corporate Governance Guidelines, our non-employee directors are
compensated $50,000 per year and $2,000 per meeting. The base fee is payable
quarterly in advance and meeting fees are paid following each meeting. In
February 2003, due to the significant number of meetings held by our board of
directors in connection with, among other things, the reorganization of
Cablecom, the outside directors were provided a one-time fee of $50,000 in lieu
of future payments for all board and committee meetings other than regularly
scheduled board meetings for the balance of 2003. Jeffrey A. Brodsky is not
compensated for his services as a director apart from the compensation of Quest
Turnaround Advisors pursuant to our engagement letter with Quest Turnaround
Advisors (as more fully described elsewhere in this Form 10-K), of which Mr.
Brodsky is a managing director.

Other Arrangements.We have no other arrangements for compensating our
directors.

Employment Agreements

Jeffrey A. Brodsky and Robert A. Schmitz.The services of Mr. Brodsky and Mr.
Schmitz are provided to us pursuant to an engagement letter agreement between
Quest Turnaround Advisors, L.L.C. and us. The following summarizes the terms
of this engagement letter:

Term: January 10, 2003 through July 10, 2003 and shall continue on a
month-to-month basis until terminated by either Quest Turnaround Advisors or us
on thirty days notice

Titles: Mr. Brodsky: chairman and chief executive officer; Mr. Schmitz:
vice president

Base Fee: $150,000 monthly fee payable to Quest Turnaround Advisors from
January 10, 2003 through July 10, 2003; after July 10, 2003, such fee shall be
reassessed by the compensation committee of our board of directors no less
frequently than quarterly; Mr. Brodsky and/or Mr. Schmitz shall each be
reimbursed by us at a rate of $400 per hour for certain additional obligations
of either of them to us

Additional Compensation: Quest Turnaround Advisors is entitled to incentive
compensation in an amount equal to ten percent (10%) of the aggregate gross
amounts distributed by us to holders of our Preferred Stock and common stock in
excess of $40 million dollars; we and Quest Turnaround Advisors will consider
alternative methods of paying such incentive compensation

John Gregg.

Employment agreement with us:
-43-Table of Contents

Term: January 10, 2003 through July 10, 2003, unless extended by the mutual
agreement of Mr. Gregg and us

Title: chief financial officer

Base Salary: $450,000 per annum plus an additional payment in the amount of
$450,000, payable in six monthly installments following the Effective Date of
the plan

Benefits: Expatriate benefits (including compensation for foreign tax
differentiation, healthcare, leave passage allowance, compassionate leave,
housing allowance in the amount of £8,190 plus utilities per month, income tax
preparation, company car allowance, cost of immigration and visas and moving
and relocation) to continue for 18 months after the expiration of the term

Termination without cause: Entitled to receive lump sum payment for remainder
of base salary and additional payment for the term then unpaid, if any;
expatriate benefits shall survive for 18 months

Non-competition: Non-competition provision shall coincide with the term

Employment agreement with Cablecom GmbH:

Term: Commenced on January 10, 2003 and may be terminated by either party by
not less than 30 days notice

Title: chief financial officer

Base Salary: $200,000 for each six-month period

Bruno Claude.

Employment agreement with us:

Term: January 10, 2003 through July 10, 2003, unless extended by the mutual
agreement of Mr. Claude and us

Title: chief operating officer

Base Salary: $400,000 per annum plus an additional payment in the amount of
$470,000, payable in six monthly installments following the Effective Date of
the Plan

Benefits: Expatriate benefits (including compensation for foreign tax
differentiation, healthcare, childrens school fees, leave passage allowance,
compassionate leave, housing allowance in the amount of £5,300 (US$8,281.50)
per month, income tax preparation, company car allowance, cost of immigration
and visas and moving and relocation) to coincide with the term; eligible to
participate at a level commensurate with his position in all employee benefit
welfare and retirement plans and programs, provided by Cablecom to its senior
executives in accordance with the terms as in effect from time to time
including, without limitation, group health coverage and participation in the
401(k) plan of Cablecom or its affiliated companies, if available, or
comparable benefits

Termination without cause: Entitled to receive lump sum payment for remainder
of base salary and additional payment for the term then unpaid, if any;
expatriate benefits shall survive for 18 months

Non-competition: Non-competition provision shall coincide with the term

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Employment agreement with Cablecom GmbH:

Term: Commenced on January 10, 2003 and may be terminated by either party by
not less than 90 days notice

Title: chief executive officer

Base Salary: 293,000 plus an annual guaranteed variable compensation payment
in the amount of 186,000; during 2002, Mr. Claude was paid an additional
100,000 in variable compensation

Bonus: Mr. Claude has an opportunity to earn up to an additional 187,000 in
annual variable compensation

Compensation Committee Interlocks and Insider Participation

As previously disclosed in this Form 10-K, none of our directors, including
members of our compensation committee, during 2002, continued to serve on our
board of directors upon consummation of the bankruptcy plan. The present
compensation committee, consisting of H. Sean Mathis and Michael J. Cochran, is
comprised of only independent directors.




Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table provides, as of March 31, 2003, information regarding
the beneficial ownership of our common stock by (a) each of our current
executive officers and directors, (b) all those directors and executive
officers as a group and (c) each person known by us to be the beneficial owner
of more than 5% of any class of our voting securities as calculated in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended,
referred to herein as the Exchange Act. As previously discussed in this Form
10-K, all of the securities of Old NTL, including its common stock, were
cancelled in connection with the consummation of the reorganization plan. In
addition, other than John F. Gregg, none of Old NTLs senior management team
continued with us. Therefore, we do not believe it is meaningful for us to
provide information regarding Old NTLs common stock or the named executive
officers in the Summary Compensation Table, other than Mr. Gregg.

|                                                                                          |  |                                           |           |                     |  |  |      |  
|----------------------------------------------------------------------------------------- |  | ----------------------------------------- | --------- | ------------------- |  |  | ---- | -
|                                                                                          |  | Amount and Nature of Beneficial Ownership
|                                                                                          |  |                                          
|Executive Officers, Directors and                                                         |  |                                           |           |                     |  |  |      |  
|Principal Stockholders (1)                                                                |  | Common Stock                              |           | Percentage of Class
|                                                                                          |  |                                           |           |                    
|Angelo, Gordon & Co., L.P.
245 Park Avenue
New York, New York 10167                       |  |                                           | 2,488,200 | (2)                 |  |  | 12.7 | %
|John M. Angelo
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue
New York, New York 10167    |  |                                           | 2,488,200 | (2)                 |  |  | 12.7 | %
|Michael L. Gordon
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue
New York, New York 10167 |  |                                           | 2,488,200 | (2)                 |  |  | 12.7 | %

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|                                                                                                                               |  |                                           |           |                     |  |  |      |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------- | --------- | ------------------- |  |  | ---- | -
|                                                                                                                               |  | Amount and Nature of Beneficial Ownership
|                                                                                                                               |  |                                          
|Executive Officers, Directors and                                                                                              |  |                                           |           |                     |  |  |      |  
|Principal Stockholders (1)                                                                                                     |  | Common Stock                              |           | Percentage of Class
|                                                                                                                               |  |                                           |           |                    
|Appaloosa
Investment Limited Partnership I
c/o Appaloosa Management L.P.
26 Main Street, First Floor
Chatham, New Jersey 07928 |  |                                           | 2,352,232 | (3)                 |  |  | 12.0 | %
|Palomino Fund Ltd.
c/o Trident Trust Company (Cayman) Ltd.
One Capital Place
P.O. Box 847
Grand Cayman, Cayman Islands         |  |                                           | 2,060,962 | (3)                 |  |  | 10.5 | %
|Appaloosa Management L.P.
26 Main Street, First Floor
Chatham, New Jersey 07928                                                |  |                                           | 4,413,194 | (3)                 |  |  | 22.4 | %
|Appaloosa Partners Inc.
c/o Appaloosa Management L.P.
26 Main Street, First Floor
Chatham, New Jersey 07928                    |  |                                           | 4,413,194 | (3)                 |  |  | 22.4 | %
|David A. Tepper
c/o Appaloosa Management L.P.
26 Main Street, First Floor
Chatham, New Jersey 07928                            |  |                                           | 4,413,194 | (3)                 |  |  | 22.4 | %
|Jeffrey A. Brodsky                                                                                                             |  |                                           |          |                     |  |  |     |  
|John F. Gregg                                                                                                                  |  |                                           |          |                     |  |  |     |  
|Bruno Claude                                                                                                                   |  |                                           |          |                     |  |  |     |  
|Robert A. Schmitz                                                                                                              |  |                                           |          |                     |  |  |     |  
|Richard A. Spohn                                                                                                               |  |                                           |          |                     |  |  |     |  
|Michael J. Cochran                                                                                                             |  |                                           |          |                     |  |  |     |  
|H. Sean Mathis                                                                                                                 |  |                                           |          |                     |  |  |     |  
|Our directors and officers
as a group (7 persons)                                                                              |  |                                           |          |                     |  |  |     |  



|(1) |  | Unless otherwise noted, the business address of each person is c/o NTL
Europe, Inc., 37 Purchase Street, Rye, New York 10580.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------

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|(2) |  | Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on April 22, 2003 relating to shares of
common stock held for the accounts of seventeen private investment funds
for which Angelo, Gordon acts as general partner and/or investment
adviser. John M. Angelo is the general partner of AG Partners, L.P.,
which is the sole general partner of Angelo, Gordon. Mr. Angelo is also
the chief executive officer Angelo, Gordon. Michael L. Gordon is the
other general partner of AG Partners, L.P. and the chief operating officer
of Angelo, Gordon.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | Based on information contained in a Schedule 13D filed with the
Securities and Exchange Commission on January 21, 2003 relating to shares
of common stock acquired by Appaloosa Investment Limited Partnership I and
Palomino Fund Ltd. Appaloosa Management L.P. is the sole general partner
of Appaloosa Investment Limited Partnership I and the investment advisor
to Palomino Fund Ltd. Appaloosa Partners Inc. is the sole general partner
of Appaloosa Management L.P. Mr. David A. Tepper is the sole stockholder
and sole director of Appaloosa Partners Inc.                                




Item. 13. Certain Relationships and Related Transactions

We have entered into several transactions with related parties as
described below.

Our Relationship with New NTL

In connection with the consummation of the reorganization plan, we have
entered into several agreements with New NTL including: (1) a Tax Sharing
Agreement, (2) a Transitional Services Agreement, (3) a De-Merger Agreement and
(4) a Novation Agreement regarding Cable and Wireless Communications plc.

The Tax Sharing Agreement recognizes that as a result of the bankruptcy
reorganization and exchange, New NTL and its subsidiaries were separated from
us and our subsidiaries, and thus ceased to be members of the consolidated tax
group of which we are the parent. The Tax Sharing Agreement sets forth the
agreement between New NTL (and its affiliated group) and us (and our affiliated
group) with respect to certain tax matters, including the rights and
obligations with respect to handling and allocating taxes for periods up to and
including the separation date, taxes for transactions effectuated in connection
with the separation and for resolving tax issues that may arise thereafter.
The Tax Sharing Agreement generally gives New NTL the right to make reasonable
determinations with respect to all such matters. The Tax Sharing Agreement
also provides for the surrender of tax losses between our United Kingdom tax
resident affiliates and United Kingdom tax resident affiliates of New NTL.

The Transitional Services Agreement recognizes that prior to the
bankruptcy reorganization, we and New NTL provided various services to one
another that each party will continue to require in order to carry on its
business. Accordingly, the Transitional Services Agreement sets forth the
agreement between us and our subsidiaries and New NTL to continue to provide
certain services to each other on a transitional basis, including but not
limited to financial services, accounting services, treasury services, investor
relations services and legal services. In addition, New NTL shall continue to
make available to us necessary personnel, office space and technical support on
a transitional basis. Upon the termination of the Transitional Services
Agreement, we may not be able to replicate the services provided thereunder and
we may not be able to find an alternative services provider on acceptable
terms.

Under the De-Merger Agreement, New NTL and we have agreed to provide one
another access to information and documentation following the effective date so
that we can comply with our respective

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filing and other obligations. The
De-Merger Agreement also provides that New NTL shall have the benefit of
appropriate rights and covenants received by Old NTL with respect to the assets
of New NTL.

The Novation Agreement relates to various agreements concerning the
acquisition in May 2000 by Old NTL of the residential business of Cable &
Wireless Communications plc, known as ConsumerCo. However, upon the
effective date, ConsumerCo ceased to be in the same group of companies as us
and, therefore, we, New NTL and various of our and their respective
subsidiaries entered into the novation agreement with respect to such
agreements. The parties to the novation agreement have agreed, as of the
effective date, to novate to New NTL certain of our rights and obligations
under and in connection with the transaction agreement dated July 26, 1999, and
to release one of our subsidiaries, NTL Delaware, from its obligations
thereunder. The parties also agreed, as of the effective date, to novate to
New NTL certain of our rights and obligations under a tax deed dated May 30,
2000 and all of our rights and obligations under a supplementary tax deed dated
May 30, 2000 and a settlement agreement dated October 5, 2001. The effect of
the various novations is, among other things, to ensure that we retain the
benefit of certain covenants in the original agreements which we may need to
rely upon while transferring to New NTL all other covenants and the liabilities
relating to actions of ConsumerCo after the effective date.

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

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

In connection with Old NTLs Chapter 11 reorganization filing, some
members of the unofficial creditors committee of bondholders entered into a
credit facility agreement (referred to as the DIP facility) committing to
provide Communications Cable Funding Corp. with up to $500.0 million in new
debt financing (NTL Delaware committed to provide up to an additional $130.0
million under the DIP facility). Pursuant to the DIP facility, all funding
needs of the debtors were funded through the proceeds of the DIP facility, in
accordance with a budget and the terms of the DIP facility agreement.
Communications Cable Funding Corp. had entered into intercompany note
agreements with Old NTL and NTL Delaware to evidence such transactions. The
notes earned interest on the unpaid principal amount for three months from July
15, 2002 at the rate of 11% per annum. With respect to each successive three
month period following that date, the rate per annum increased incrementally by
1% over the immediately preceding three month period, but did not exceed 18%
per annum for any three month period. Upon emergence from Chapter 11
reorganization and in accordance with the plan of reorganization, this debt in
the amount of $69.3 million was repaid.

Premium TV has entered into a number of agreements with New NTL, pursuant
to which Premium TV receives certain operational services covering premises,
connectivity, hosting, technology and other corporate volume purchasing
benefits. Premium TV, through its joint venture with the Football
League, has a co-marketing agreement linked with New NTLs broadband
product and Premium TV has

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an agreement with New NTL pursuant to which New NTL
is able to exploit Premium TVs FA Premier League pay per view rights.

In 1999, NTL Broadcast established two subsidiaries, located in Thailand
and Malaysia. Following consummation of the plan of reorganization, we
maintained ownership of the operations in Malaysia and Thailand through two
companies, NTL Broadcast Sdn and NTL Broadcast (Thailand) Ltd. The two
subsidiaries are managed as one business. Separately, New NTL maintains a
branch office in Singapore. Our subsidiaries rely on New NTLs Singapore
office for administration and other support services. We have entered into an
agreement with New NTL to jointly manage the businesses of NTL Broadcast Sdn
and NTL Broadcast (Thailand).

Old NTL's Relationship with ATX Communications, Inc.

New NTLs president and chief executive officer, Barclay Knapp, is also
the chairman of ATX Communications, Inc. (formerly known as CoreComm Holdco,
Inc. and referred to herein as ATX). Until January 2003, ATX shared resources
with Old NTL related specifically to corporate activity, including corporate
employees and a corporate office. In conjunction with these arrangements, Old NTL
provided ATX with management, financial, legal and administrative support
services through the use of employees, as well as access to office space and
equipment and use of supplies and related office services. The salaries of
employees providing services to ATX were charged to ATX by Old NTL based on the
allocations of their time spent providing services to ATX. We do not
share any resources with ATX.

Amounts
charged to ATX by Old NTL consisted of direct costs allocated to ATX
where identifiable and a percentage of the portion of Old NTL's corporate overhead
which could not be specifically allocated by Old NTL. Effective January 1, 2001, the
percentage used to allocate corporate overhead was reduced. Old NTL's charges to ATX
commenced in October 1998. It is not practicable to determine the amounts of
these expenses that would have been incurred had ATX operated as an
unaffiliated entity. In the opinion of Old NTL's management, this
allocation method was reasonable. For the years ended December 31, 2002, 2001 and 2000, Old NTL charged
ATX $385,000, $446,000 and $1,186,000, respectively, which reduced
Old NTL's
corporate expenses.

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

New NTL obtains billing and software development services from ATX. ATX
billed Old NTL $2.9 million, $3.4 million and $5.9 million in the years ended
December 31, 2002, 2001 and 2000, respectively, for these services. In 2001,
Old NTL entered into a license agreement with ATX whereby New NTL was granted an
exclusive, irrevocable, perpetual license to billing software developed by ATX
for telephony rating, digital television events rating, fraud management and
other tasks. The sales price was cash of $9.8 million for the development
costs expended by ATX plus a fixed amount of $3.0 million
representing the one-time perpetual license fee. The billing software was
being used by New NTL at the

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time of this agreement, and was being maintained
and modified by ATX under an ongoing software maintenance and development
outsourcing arrangement between the companies.

In March 2000, New NTL and ATX announced that they had entered into an
agreement to link their networks in order to create an international Internet
backbone that commenced operations in February 2001. New NTL incurred costs of
$0.3 million for network usage in the year ended December 31, 2001. We have
not incurred any additional costs subsequent to 2001.




Item 14. Controls and Procedures

Within 90 days of the filing of this Form 10-K, we carried out an
evaluation, under the supervision and with the participation of management,
including the Chief Executive Officer and Chief Financial Officer, of our
disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under
the Securities Exchange Act of 1934). Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information required to be included in periodic filings with the Securities and
Exchange Commission.

There were no significant changes in our internal controls or in other
factors that could significantly affect these internal controls subsequent to
the date of our most recent evaluation.




PART IV




Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K



| | (a) |  | The following are filed as a part of this report.
| | --- |  | -------------------------------------------------
|
| | (1) |  | Financial Statements                             



| |                                                                    
| | -------------------------------------------------------------------
| | Reference is made to the Index to Financial Statements on Page F-1.



| | (2) |  | Financial Statement Schedules
| | --- |  | -----------------------------

|   |  |   |  |                                               |  |                      
|-- |  | - |  | --------------------------------------------- |  | ---------------------
|I  |  |  |  | Condensed Financial Information of Registrant |  | F-58, F-112 and F-168
|II |  |  |  | Valuation and qualifying accounts             |  | F-64, F-117 and F-177

All other schedules are omitted since the required information is not
present or is not present in amounts sufficient to require submission of the
schedules, or because the information required is included in the financial
statements and notes thereto.



| | (3) |  | Exhibits
| | --- |  | --------

|        |  |                                                                                                                                                                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                          
|No.     |  | Description                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                          
|3.1     |  | Amended and Restated Certificate of Incorporation, dated as of January
10, 2003 [Incorporated by reference to Exhibit 1 to the Registrants
Registration Statement on Form 8-A/A (Commission File No. 0-30673) filed
on January 10, 2003]

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|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3.2     |  | Amended and Restated By-Laws [Incorporated by reference to Exhibit 2 to
the Registrants Registration Statement on Form 8-A/A (Commission File No.
0-30673) filed on January 10, 2003]                                                                                                                                                                                                                                                                                                                                                                      
|4.1     |  | Form of Common Stock Certificate [Incorporated by reference to Exhibit 4
to the Registrants Registration Statement on Form 8-A/A (Commission File
No. 0-30673) filed on January 10, 2003]                                                                                                                                                                                                                                                                                                                                                                  
|4.2     |  | Form of 10% Fixed Coupon Redeemable Preferred Stock [Incorporated by
reference to Exhibit 5 to the Registrants Registration Statement on Form
8-A/A (Commission File No. 0-30673) filed on January 10, 2003]                                                                                                                                                                                                                                                                                                                                               
|4.3     |  | Stockholder Rights Agreement, dated as of January 10, 2003, by and
between NTL Europe, Inc. and Continental Stock Transfer and Trust Company
[Incorporated by reference to Exhibit 3 to the Registrants Registration
Statement on Form 8-A/A (Commission File No. 0-30673) filed on January 10,
2003]                                                                                                                                                                                                                                                      
|4.4     |  | Registration Rights Agreement, dated as of January 10, 2003, by and among
NTL Europe, Inc. and the other parties listed on the signature pages
thereto [Incorporated by reference to Exhibit 4.2 to the Registrants
Current Report on Form 8-K (Commission File No. 0-30673) filed on January
27, 2003]                                                                                                                                                                                                                                                    
|4.5*    |  | Amendment No. 1 to Registration Rights Agreement, dated as of May 7,
2003, by and among NTL Europe, Appaloosa Management L.P. and Angelo Gordon
& Co., L.P.                                                                                                                                                                                                                                                                                                                                                                                                 
|10.1    |  | NTL Europe, Inc. 2003 Stock Option Plan adopted on January 10, 2003
[Incorporated by reference to Exhibit 10.1 to the Registrants Current
Report on Form 8-K (Commission File No. 0-30673) filed on January 10,
2003]                                                                                                                                                                                                                                                                                                                                      
|10.2    |  | Credit Agreement, dated March 28, 2000, as amended on May 16, 2000 and as
amended and restated as of April 30, 2002, by and among NTL Delaware as
parent, NTL Cablecom Holding GmbH as shareholder, Cablecom GmbH as
principal borrower, J.P. Morgan plc and Morgan Stanley Senior Funding,
Inc. as arrangers and joint book managers, J.P. Morgan Europe Limited as
agent, and the lenders party thereto [Incorporated by reference to Exhibit
10.2 to the Registrants Current Report on Form 8-K (Commission File No.
0-30673) filed on January 10, 2003]
|10.3    |  | Employment Agreement, dated October 15, 2002, by and between NTL Europe,
Inc. and John F. Gregg [Incorporated by reference to Exhibit 10.3 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                                                                                                                                                                                                                          
|10.4    |  | Employment Agreement, dated October 15, 2002, by and between NTL Europe,
Inc. and Bruno J. Claude [Incorporated by reference to Exhibit 10.4 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                                                                                                                                                                                                                        
|10.5    |  | Employment Agreement, dated October 15, 2002, by and between Cablecom
GmbH and John F. Gregg [Incorporated by reference to Exhibit 10.5 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                                                                                                                                                                                                                             

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|        |  |                                                                                                                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                
|10.6    |  | Employment Agreement, dated October 15, 2002, by and between Cablecom
GmbH and Bruno J. Claude [Incorporated by reference to Exhibit 10.6 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                              
|10.7    |  | Engagement Letter, dated August 30, 2002, by and among NTL Europe, Inc.,
the Creditors Committee and Quest Turnaround Advisors, L.L.C.
[Incorporated by reference to Exhibit 10.7 to the Registrants Current
Report on Form 8-K (Commission File No. 0-30673) filed on January 10,
2003]                                                                     
|10.8    |  | Form of NTL Europe, Inc. Director and Officer Indemnification Agreement
and a schedule of persons party thereto [Incorporated by reference to
Exhibit 10.8 to the Registrants Current Report on Form 8-K (Commission
File No. 0-30673) filed on January 10, 2003]                                                                                             
|10.9    |  | Tax Sharing Agreement, dated January 10, 2003, by and between NTL Europe,
Inc. and NTL Incorporated [Incorporated by reference to Exhibit 10.9 to
the Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                         
|10.10   |  | Transitional Services Agreement, dated January 10, 2003, by and between
NTL Europe, Inc. and NTL Incorporated [Incorporated by reference to
Exhibit 10.10 to the Registrants Current Report on Form 8-K (Commission
File No. 0-30673) filed on January 10, 2003]                                                                                              
|10.11   |  | De-Merger Agreement, dated January 10, 2003, by and between NTL Europe,
Inc. and NTL Incorporated [Incorporated by reference to Exhibit 10.11 to
the Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                          
|10.12   |  | Novation Agreement, dated January 10, 2003, by and among NTL Europe,
Inc., NTL Incorporated, Cable and Wireless plc and certain of each of
their respective subsidiaries [Incorporated by reference to Exhibit 10.12
to the Registrants Current Report on Form 8-K (Commission File No.
0-30673) filed on January 10, 2003]                                   
|10.13   |  | Agreement, relating to the transfer of certain securities in B2, dated
April 30, 2003, among NTL Delaware, NTL Sweden, Nogenta Swedish
Acquisition Holding B.V. and the Key Shareholders, Other Holders and B2
[Incorporated by reference to Exhibit 10.13 of the Registrants Current
Report on Form 8-K (Commission File. No. 0-30673) filed on May 14, 2003]
|10.14*  |  | Engagement Letter, dated January 28, 2003, by and between NTL Europe,
Inc. and Quest Turnaround Advisors, L.L.C.                                                                                                                                                                                                                                               
|21*     |  | Subsidiaries                                                                                                                                                                                                                                                                                                                                                   
|99.1*   |  | Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act                                                                                                                                                                                                                                                                     
|99.2*   |  | Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act                                                                                                                                                                                                                                                                     
|99.3*   |  | Corporate Governance Guidelines of NTL Europe, Inc. adopted on January
10, 2003                                                                                                                                                                                                                                                                                
|99.4*   |  | Code of Business Conduct and Ethics of NTL Europe, Inc. adopted on
January 10, 2003                                                                                                                                                                                                                                                                            

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|        |  |                                                                                                 
|------- |  | ------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                 
|No.     |  | Description                                                                                     
|        |  |                                                                                                 
|99.5*   |  | Code of Ethics for Principal Executive and Senior Financial Officers
adopted on January 10, 2003
|99.6*   |  | Compensation Committee Charter of NTL Europe, Inc. adopted on January 10, 2003                  
|99.7*   |  | Audit Committee Charter of NTL Europe, Inc. adopted on January 10, 2003                         
|99.8*   |  | Disclosure Committee Charter of NTL Europe, Inc. adopted on April 10, 2003                      



---

|* |  | filed herewith
|- |  | --------------



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

The following current reports on Form 8-K were filed by Old NTL during the
last quarter of 2002. As previously discussed in this Form 10-K, substantially
all of the assets of Old NTL were separated into New NTL, with which we are not
affiliated, and, therefore, these reports do not reflect our current business
or financial condition.



| | (1) |  | Current Report on Form 8-K, filed November 7, 2002, regarding
Stephen Carters (former Managing Director) announcement of his
intention to leave Old NTL.                                                                       
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Current Report on Form 8-K filed November 12, 2002, inviting
investors to Old NTLs third quarter financial results conference
call on November 14, 2002.                                                                       
|
| | (3) |  | Current Report on Form 8-K, filed November 14, 2002,
announcing results for the three months ended September 30, 2002.                                                                                                          
|
| | (4) |  | Current Report on Form 8-K, filed December 12, 2002,
announcing Old NTLs intention of reaching agreements in order to
consummate its plan of reorganization.                                                                   
|
| | (5) |  | Current Report on Form 8-K, filed December 24, 2002,
announcing that a supplementary prospectus was published in relation
to the proposed offering in the United Kingdom of Warrants in
connection with the reorganization plan.
|
| | (6) |  | Current Report on Form 8-K, filed December 30, 2002,
announcing a fourth supplementary prospectus published in relation
to the proposed offering in the United Kingdom of Warrants in
connection with the reorganization plan.  

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Form 10-K-Item 15(a)(1) and (2)

NTL
Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and
SubsidiariesNTL (Delaware), Inc. (Debtor-in-Possession) and
SubsidiariesNTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Index to Consolidated Financial Statements
and Financial Statement Schedules

The following consolidated financial statements are included in Item 8:

|                                                                                                                            |  |  |       | 
|--------------------------------------------------------------------------------------------------------------------------- |  |  | ----- | 
|Report of Independent Auditors of NTL Europe, Inc.                                                                          |  |  | F-2   | 
|Consolidated Balance Sheets of NTL Europe, Inc.  December 31, 2002 and 2001                                                |  |  | F-3   | 
|Consolidated Statements of Operations of NTL Europe, Inc. 
Years ended December 31, 2002, 2001 and 2000                    |  |  | F-5   | 
|Consolidated Statement of Shareholders (Deficiency) of NTL Europe, Inc. 
Years ended December 31, 2002, 2001 and 2000     |  |  | F-6   | 
|Consolidated Statements of Cash Flows of NTL Europe, Inc. 
Years ended December 31, 2002, 2001 and 2000                    |  |  | F-8   | 
|Notes to Consolidated Financial Statements of NTL Europe, Inc.                                                              |  |  | F-10  | 
|Report of Independent Auditors of NTL (Delaware), Inc.                                                                      |  |  | F-66  | 
|Consolidated Balance Sheets of NTL (Delaware), Inc.  December 31, 2002 and 2001                                            |  |  | F-67  | 
|Consolidated Statements of Operations of NTL (Delaware), Inc. 
Years ended December 31, 2002, 2001 and 2000                |  |  | F-69  | 
|Consolidated Statement of Shareholders (Deficiency) of NTL (Delaware), Inc. 
Years ended December 31, 2002, 2001 and 2000 |  |  | F-70  | 
|Consolidated Statements of Cash Flows of NTL (Delaware), Inc. 
Years ended December 31, 2002, 2001 and 2000                |  |  | F-72  | 
|Notes to Consolidated Financial Statements of NTL (Delaware), Inc.                                                          |  |  | F-74  | 
|Report of Independent Auditors of NTL Incorporated                                                                          |  |  | F-119 | 
|Consolidated Balance Sheets of NTL Incorporated  December 31, 2002 and 2001                                                |  |  | F-120 | 
|Consolidated Statements of Operations of NTL Incorporated 
Years ended December 31, 2002, 2001 and 2000                    |  |  | F-122 | 
|Consolidated Statement of Shareholders (Deficiency) of NTL Incorporated 
Years ended December 31, 2002, 2001 and 2000     |  |  | F-123 | 
|Consolidated Statements of Cash Flows of NTL Incorporated 
Years ended December 31, 2002, 2001 and 2000                    |  |  | F-125 | 
|Notes to Consolidated Financial Statements of NTL Incorporated                                                              |  |  | F-127 | 

The following consolidated financial statement schedules are included in Item 15(d):

|                                                                                  |  |  |       | 
|--------------------------------------------------------------------------------- |  |  | ----- | 
|Schedule I  Condensed Financial Information of Registrant (NTL Europe, Inc.)     |  |  | F-58  | 
|Schedule II  Valuation and Qualifying Accounts of NTL Europe, Inc.               |  |  | F-64  | 
|Schedule I  Condensed Financial Information of Registrant (NTL (Delaware), Inc.) |  |  | F-112 | 
|Schedule II  Valuation and Qualifying Accounts of NTL (Delaware), Inc.           |  |  | F-117 | 
|Schedule I  Condensed Financial Information of Registrant (NTL Incorporated)     |  |  | F-168 | 
|Schedule II  Valuation and Qualifying Accounts of NTL Incorporated               |  |  | F-177 | 

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.

THE FINANCIAL STATEMENTS FOR NTL INCORPORATED (FORMERLY NTL COMMUNICATIONS
CORP.) ARE BEING PRESENTED IN NTL EUROPE, INC.S FORM 10-K PURSUANT TO RULE
3-10 OF REGULATION S-X BECAUSE NTL EUROPE, INC. AND NTL INCORPORATED WERE
CO-OBLIGORS OF CERTAIN DEBT SECURITIES OUTSTANDING AS OF DECEMBER 31, 2002. ON
JANUARY 10, 2003, SUCH DEBT WAS CANCELLED IN CONNECTION WITH THE CONSUMMATION
OF THE REORGANIZATION PLAN AND NTL EUROPE, INC. AND NTL INCORPORATED WERE
DIVIDED INTO TWO SEPARATE COMPANIES. NTL EUROPE, INC. NO LONGER OWNS AND IS
NOT AFFILIATED WITH NTL INCORPORATED. THEREFORE, THE FINANCIAL STATEMENTS OF
NTL INCORPORATED RELATE TO A BUSINESS NO LONGER OWNED OR OPERATED BY NTL
EUROPE, INC.

F-1



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
NTL Europe, Inc. (formerly NTL Incorporated)

We have audited the consolidated balance sheets of NTL Europe, Inc. (formerly
NTL Incorporated) and Subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of operations, shareholders (deficiency) and
cash flows for each of the three years in the period ended December 31, 2002.
Our audits also included the financial statement schedules listed in the Index
at Item 15(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
Europe, Inc. (formerly NTL Incorporated) and Subsidiaries at December 31, 2002
and 2001, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 2002, 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.

As discussed in Note 5, the Company changed its method of accounting for
goodwill and other intangibles effective January 1, 2002.

/s/ ERNST & YOUNG LLP

New York, New York
May 28, 2003

F-2



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Balance Sheets
(dollars in millions)

|                                                                                  |                                                                                                  |   |              |          |      |   |          |          | 
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | - | ------------ | -------- | ---- | - | -------- | -------- | 
|                                                                                  |                                                                                                  |   | December 31,
|                                                                                  |                                                                                                  |   |             
|                                                                                  |                                                                                                  |   | 2002         |          | 2001
|                                                                                  |                                                                                                  |   |              |          |     
|Assets                                                                            |                                                                                                  |   |              |          |      |   |          |         
|Current assets:                                                                   |                                                                                                  |   |              |          |      |   |          |         
|                                                                                  | Cash and cash equivalents                                                                        |   | $            | 277.5    |      |   | $        | 228.3    | 
|                                                                                  | Marketable securities                                                                            |   |              | 17.3     |      |   |          |         | 
|                                                                                  | Accounts receivable  trade, less allowance for doubtful
accounts of $9.4 (2002) and $6.6 (2001) |   |              | 243.4    |      |   |          | 194.2    | 
|                                                                                  | Other                                                                                            |   |              | 50.3     |      |   |          | 67.9     | 
|                                                                                  | Discontinued operations                                                                          |   |              | 12,968.1 |      |   |          | 13,331.0 | 
|                                                                                  |                                                                                                  |   |              |          |      |   |          |         
|Total current assets                                                              |                                                                                                  |   | 13,556.6     |          |      |   | 13,821.4 |         
|Fixed assets, net                                                                 |                                                                                                  |   | 1,682.1      |          |      |   | 1,494.9  |         
|Goodwill                                                                          |                                                                                                  |   | 218.7        |          |      |   | 960.0    |         
|Customer lists, net of accumulated amortization of $171.4 (2002)
and $91.1 (2001) |                                                                                                  |   | 62.8         |          |      |   | 104.1    |         
|Investments in and loans to affiliates, net                                       |                                                                                                  |   | 13.0         |          |      |   | 267.8    |         
|Deferred tax asset                                                                |                                                                                                  |   | 195.3        |          |      |   | 20.4     |         
|Other assets, net of accumulated amortization of
$62.4 (2002) and $24.9 (2001)    |                                                                                                  |   | 120.9        |          |      |   | 190.3    |         
|                                                                                  |                                                                                                  |   |              |          |      |   |          |          | 
|Total assets                                                                      |                                                                                                  | $ | 15,849.4     |          |      | $ | 16,858.9 |         
|                                                                                  |                                                                                                  |   |              |          |      |   |          |         

F-3



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Balance Sheets  continued
(dollars in millions)

|                                                                                                                                                                                                                     |                                                                                                                                                     |   |              |           |      |   |          |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | --------- | ---- | - | -------- | --------- | -
|                                                                                                                                                                                                                     |                                                                                                                                                     |   | December 31,
|                                                                                                                                                                                                                     |                                                                                                                                                     |   |             
|                                                                                                                                                                                                                     |                                                                                                                                                     |   | 2002         |           | 2001
|                                                                                                                                                                                                                     |                                                                                                                                                     |   |              |           |     
|Liabilities and shareholders (deficiency)                                                                                                                                                                           |                                                                                                                                                     |   |              |           |      |   |          |          
|Liabilities not subject to compromise                                                                                                                                                                                |                                                                                                                                                     |   |              |           |      |   |          |          
|Current liabilities:                                                                                                                                                                                                 |                                                                                                                                                     |   |              |           |      |   |          |          
|                                                                                                                                                                                                                     | Accounts payable                                                                                                                                    |   | $            | 49.3      |      |   | $        | 37.7      |  
|                                                                                                                                                                                                                     | Accrued expenses and other                                                                                                                          |   |              | 92.5      |      |   |          | 158.5     |  
|                                                                                                                                                                                                                     | Interest payable                                                                                                                                    |   |              | 43.5      |      |   |          | 50.5      |  
|                                                                                                                                                                                                                     | Deferred revenue                                                                                                                                    |   |              | 235.6     |      |   |          | 173.3     |  
|                                                                                                                                                                                                                     | Current portion of long-term debt                                                                                                                   |   |              | 2,719.3   |      |   |          | 3,460.2   |  
|                                                                                                                                                                                                                     | Discontinued operations (including liabilities subject to
compromise of $10,157.8)                                                                  |   |              | 17,956.2  |      |   |          | 16,426.2  |  
|                                                                                                                                                                                                                     |                                                                                                                                                     |   |              |           |      |   |          |          
|Total current liabilities                                                                                                                                                                                            |                                                                                                                                                     |   | 21,096.4     |           |      |   | 20,306.4 |          
|Long-term debt                                                                                                                                                                                                       |                                                                                                                                                     |   |             |           |      |   |         |          
|Other                                                                                                                                                                                                                |                                                                                                                                                     |   | 132.7        |           |      |   | 156.6    |          
|Deferred income taxes                                                                                                                                                                                                |                                                                                                                                                     |   | 226.0        |           |      |   | 164.6    |          
|Liabilities subject to compromise, including redeemable preferred stock                                                                                                                                              |                                                                                                                                                     |   | 4,294.1      |           |      |   |         |          
|Commitments and contingent liabilities                                                                                                                                                                               |                                                                                                                                                     |   |              |           |      |   |          |          
|Redeemable preferred stock  $.01 par value, plus accreted dividends;
liquidation preference $3,024.7; less unamortized discount of $33.4
(2002) and $53.4 (2001); issued and outstanding 2.1 shares (2002 and
2001) |                                                                                                                                                     |   |             |           |      |   | 2,773.7  |          
|Shareholders (deficiency):                                                                                                                                                                                          |                                                                                                                                                     |   |              |           |      |   |          |          
|                                                                                                                                                                                                                     | Series preferred stock  $.01 par value; authorized 10.0 shares;
liquidation preference $3,160.0; issued and outstanding 3.0 shares
(2002 and 2001) |   |              |          |      |   |          |          |  
|                                                                                                                                                                                                                     | Common stock  $.01 par value; authorized 800.0 shares; issued and
outstanding 276.6 shares (2002 and 2001)                                         |   |              | 2.8       |      |   |          | 2.8       |  
|                                                                                                                                                                                                                     | Additional paid-in capital                                                                                                                          |   |              | 13,574.9  |      |   |          | 13,720.0  |  
|                                                                                                                                                                                                                     | Accumulated other comprehensive (loss)                                                                                                              |   |              | (830.2    | )    |   |          | (1,072.8  | )
|                                                                                                                                                                                                                     | (Deficit)                                                                                                                                           |   |              | (22,647.3 | )    |   |          | (19,192.4 | )
|                                                                                                                                                                                                                     |                                                                                                                                                     |   |              |           |      |   |          |           |  
|                                                                                                                                                                                                                     |                                                                                                                                                     |   | (9,899.8     | )         |      |   | (6,542.4 | )        
|                                                                                                                                                                                                                     |                                                                                                                                                     |   |              |           |      |   |          |           |  
|Total liabilities and shareholders (deficiency)                                                                                                                                                                     |                                                                                                                                                     | $ | 15,849.4     |           |      | $ | 16,858.9 |          
|                                                                                                                                                                                                                     |                                                                                                                                                     |   |              |           |      |   |          |          

See accompanying notes.

F-4



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Operations
(dollars in millions, except per share amounts)

|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |          |        |  
|---------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | ----------------------------------- | -------- | ----------------------- | ------ | ---- | --------- | --------- | ------ | - | -------- | -------- | ------ | -
|                                                                                         |                                                                                                                |                                     |          | Year Ended December 31,
|                                                                                         |                                                                                                                |                                     |          |                        
|                                                                                         |                                                                                                                |                                     |          | 2002                    |        | 2001 |           | 2000     
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |          
|Revenues                                                                                 |                                                                                                                | $                                   | 435.9    |                         |        | $    | 391.6     |           |        | $ | 226.8    |         
|Costs and expenses
Operating expenses (exclusive of depreciation
shown separately below) |                                                                                                                |                                     | 175.4    |                         |        |      | 170.4     |           |        |   | 88.9     |         
|Selling, general and administrative expenses                                             |                                                                                                                |                                     | 138.8    |                         |        |      | 178.0     |           |        |   | 103.1    |         
|Asset impairments                                                                        |                                                                                                                |                                     | 854.3    |                         |        |      | 912.1     |           |        |   |         |         
|Other charges                                                                            |                                                                                                                |                                     | 3.5      |                         |        |      | 12.2      |           |        |   |         |         
|Corporate expenses                                                                       |                                                                                                                |                                     | 11.5     |                         |        |      | 42.5      |           |        |   | 23.8     |         
|Depreciation                                                                             |                                                                                                                |                                     | 222.7    |                         |        |      | 154.4     |           |        |   | 87.4     |         
|Amortization                                                                             |                                                                                                                |                                     | 95.5     |                         |        |      | 433.4     |           |        |   | 299.3    |         
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|                                                                                         |                                                                                                                |                                     | 1,501.7  |                         |        |      | 1,903.0   |           |        |   | 602.5    |         
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|Operating (loss)                                                                         |                                                                                                                |                                     | (1,065.8 | )                       |        |      | (1,511.4  | )         |        |   | (375.7   | )       
|Other income (expense)
Interest income and other, net                                    |                                                                                                                |                                     | (11.0    | )                       |        |      | 20.4      |           |        |   | 45.5     |         
|Interest expense (contractual interest of $223.5 (2002))                                 |                                                                                                                |                                     | (156.1   | )                       |        |      | (195.1    | )         |        |   | (139.7   | )       
|Share of (losses) from equity investments                                                |                                                                                                                |                                     | (251.3   | )                       |        |      | (660.0    | )         |        |   | (46.7    | )       
|Other gains (losses)                                                                     |                                                                                                                |                                     | 3.0      |                         |        |      | (58.9     | )         |        |   |         |         
|Foreign currency transaction gains (losses)                                              |                                                                                                                |                                     | 9.3      |                         |        |      | (14.3     | )         |        |   | (62.5    | )       
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|(Loss) before recapitalization items, income taxes and
discontinued operations           |                                                                                                                |                                     | (1,471.9 | )                       |        |      | (2,419.3  | )         |        |   | (579.1   | )       
|Recapitalization items, net                                                              |                                                                                                                |                                     | (4.8     | )                       |        |      |          |           |        |   |         |         
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|(Loss) before income taxes and discontinued operations                                   |                                                                                                                |                                     | (1,476.7 | )                       |        |      | (2,419.3  | )         |        |   | (579.1   | )       
|Income tax benefit (expense)                                                             |                                                                                                                |                                     | 128.1    |                         |        |      | 50.9      |           |        |   | 22.9     |         
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|(Loss) from continuing operations                                                        |                                                                                                                |                                     | (1,348.6 | )                       |        |      | (2,368.4  | )         |        |   | (556.2   | )       
|Discontinued operations:                                                                 |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|                                                                                         | (Loss) from discontinued operations, net of income tax
benefit of $26.3 (2002), $114.1 (2001) and $88.1
(2000) |                                     |          | (2,100.6                | )      |      |           | (11,872.9 | )      |   |          | (2,407.5 | )     
|                                                                                         | Net (loss) on sales of discontinued operations, net of
income tax expense of $4.6 (2002)                       |                                     |          | (5.7                    | )      |      |           |          |        |   |          |         |       
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|(Loss) from discontinued operations                                                      |                                                                                                                |                                     | (2,106.3 | )                       |        |      | (11,872.9 | )         |        |   | (2,407.5 | )       
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|Net (loss)                                                                               |                                                                                                                |                                     | (3,454.9 | )                       |        |      | (14,241.3 | )         |        |   | (2,963.7 | )       
|Preferred stock dividends (contractual dividends of
$370.6 (2002))                       |                                                                                                                |                                     | (145.1   | )                       |        |      | (325.7    | )         |        |   | (194.0   | )       
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|Net (loss) available to common shareholders                                              |                                                                                                                | $                                   | (3,600.0 | )                       |        | $    | (14,567.0 | )         |        | $ | (3,157.7 | )       
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|Basic and diluted net (loss) per share:                                                  |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|                                                                                         |                                                                                                                | (Loss) from continuing operations   |          | $                       | (5.40  | )    |           | $         | (9.76  | ) |          | $        | (3.46  | )
|                                                                                         |                                                                                                                | (Loss) from discontinued operations |          |                         | (7.62  | )    |           |           | (43.02 | ) |          |          | (11.08 | )
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|                                                                                         |                                                                                                                | Net (loss) per common share         |          | $                       | (13.02 | )    |           | $         | (52.78 | ) |          | $        | (14.54 | )
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         
|                                                                                         |                                                                                                                | Weighted average shares             |          |                         | 276.6  |      |           |           | 276.0  |   |          |          | 217.1  |  
|                                                                                         |                                                                                                                |                                     |          |                         |        |      |           |           |        |   |          |         

See accompanying notes.

F-5



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Shareholders (Deficiency)
(dollars in millions)

|                                                                                                                                                                                          |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ---- | -------------- |  | ---------- | - | --- |  | ------- | ----- | - |  | - | --- |  |  | - | -------- | -
|                                                                                                                                                                                          |  | Series Preferred Stock |      | Common Stock   |  | Additional
|                                                                                                                                                                                          |  | $.01 Par Value         |      | $.01 Par Value |  | Paid-In   
|                                                                                                                                                                                          |  |                        |      |                |  |           
|                                                                                                                                                                                          |  | Shares                 |      | Par            |  | Shares     |   | Par |  | Capital
|                                                                                                                                                                                          |  |                        |      |                |  |            |   |     |  |        
|Balance, December 31, 1999                                                                                                                                                                |  |                        | 1.3  |                |  | $          |  |     |  |         | 132.4 |   |  | $ | 1.3 |  |  | $ | 4,125.1  |  
|Exercise of stock options                                                                                                                                                                 |  |                        |      |                |  |            |   |     |  |         | 2.3   |   |  |   |    |  |  |   | 36.3     |  
|Rescission of stock option exercises                                                                                                                                                      |  |                        |      |                |  |            |   |     |  |         | (0.2  | ) |  |   |     |  |  |   | (1.1     | )
|Exercise of warrants                                                                                                                                                                      |  |                        |      |                |  |            |   |     |  |         | 1.3   |   |  |   |    |  |  |   | 9.0      |  
|Common stock issued for cash                                                                                                                                                              |  |                        |      |                |  |            |   |     |  |         | 42.2  |   |  |   | 0.4 |  |  |   | 2,327.2  |  
|Preferred stock issued for cash                                                                                                                                                           |  |                        | 2.0  |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | 1,862.0  |  
|Common stock issued for an acquisition                                                                                                                                                    |  |                        |      |                |  |            |   |     |  |         | 84.9  |   |  |   | 0.9 |  |  |   | 5,487.4  |  
|Conversion of series preferred stock                                                                                                                                                      |  |                        | (0.5 | )              |  |            |  |     |  |         | 9.2   |   |  |   | 0.1 |  |  |   | 7.5      |  
|Preferred stock issued for dividends                                                                                                                                                      |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | 9.4      |  
|Accreted dividends on preferred stock                                                                                                                                                     |  |                        | 0.1  |                |  |            |  |     |  |         |       |   |  |   |     |  |  |   | (97.8    | )
|Accretion of discount on preferred stock                                                                                                                                                  |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | (0.3     | )
|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 |  |  |   | 13,764.7 |  
|Exercise of stock options                                                                                                                                                                 |  |                        |      |                |  |            |   |     |  |         | 1.1   |   |  |   |     |  |  |   | 13.0     |  
|Non-cash compensation                                                                                                                                                                     |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | 30.6     |  
|Accreted dividends on preferred stock                                                                                                                                                     |  |                        | 0.1  |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | (195.5   | )
|Accretion of discount on preferred stock                                                                                                                                                  |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | (25.3    | )
|Conversion of 7% Convertible Notes                                                                                                                                                        |  |                        |      |                |  |            |   |     |  |         | 3.3   |   |  |   | 0.1 |  |  |   | 128.2    |  
|Common stock issued for an acquisition                                                                                                                                                    |  |                        |      |                |  |            |   |     |  |         | 0.1   |   |  |   |     |  |  |   | 4.3      |  
|Comprehensive loss:                                                                                                                                                                       |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|Net loss for the year ended
December 31, 2001
Currency translation adjustment
Unrealized net losses on investments
Unrealized net losses on derivatives
Total                             |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|                                                                                                                                                                                          |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|Balance, December 31, 2001                                                                                                                                                                |  |                        | 3.0  |                |  |            |  |     |  |         | 276.6 |   |  |   | 2.8 |  |  |   | 13,720.0 |  
|Accreted dividends on preferred stock                                                                                                                                                     |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | (125.1   | )
|Accretion of discount on preferred stock                                                                                                                                                  |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   | (20.0    | )
|Comprehensive loss:                                                                                                                                                                       |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|Net loss for the year ended
December 31, 2002
Currency translation adjustment
Reclassification adjustment
Additional minimum pension liability
Unrealized net losses on derivatives
Total |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|                                                                                                                                                                                          |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  
|Balance, December 31, 2002                                                                                                                                                                |  |                        | 3.0  |                |  | $          |  |     |  |         | 276.6 |   |  | $ | 2.8 |  |  | $ | 13,574.9 |  
|                                                                                                                                                                                          |  |                        |      |                |  |            |   |     |  |         |       |   |  |   |     |  |  |   |          |  

F-6



---



##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Shareholders (Deficiency)  continued
(dollars in millions)

|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |   | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | - | ------------- | --------- | ----------- | - | ----------- | - | ----------- | - | ----------------- | - | ---------- | - | ----- | - |  | - | ----- | - |  | - | --------- | - | 
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   | Accumulated Other |   |            |   |       |   |  |   |      
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   | Comprehensive     |   |            |   |       |   |  |   |      
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   | (Loss)            |   |            |   |       |   |  |   |      
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   | Unrealized        |   | Unrealized |   |       |   |  |   |       |   | 
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   | Foreign     |   | Net         |   | Net               |   |            |   |       |   |  |   |      
|                                                                                                                                                                                                                                                                                                                                                                     |       |   | Comprehensive |           | Currency    |   | Losses on   |   | Losses on   |   | Minimum Pension   |   |            |   |      
|                                                                                                                                                                                                                                                                                                                                                                     |       |   | (Loss)        |           | Translation |   | Investments |   | Derivatives |   | Liability         |   | (Deficit) 
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |           
|Balance, December 31, 1999                                                                                                                                                                                                                                                                                                                                           |       |   |               |           |             | $ | (2.1        | ) |             |   |                   |   |            |   |       |   |  |   |       |   |  | $ | (1,987.4  | )
|Exercise of stock options
Rescission of stock option exercises
Exercise of warrants
Common stock issued for cash
Preferred stock issued for cash
Common stock issued for an
acquisition
Conversion of series preferred stock
Preferred stock issued for dividends
Accreted dividends on preferred
stock
Accretion of discount on preferred
stock
Comprehensive loss: |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Net loss for the year ended
December 31, 2000                                                                                                                                                                                                                                                                                                                        |       | $ | (2,963.7      | )         |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   | (2,963.7  | )
|Currency translation adjustment                                                                                                                                                                                                                                                                                                                                      |       |   | (432.6        | )         |             |   | (432.6      | ) |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Unrealized net losses on investments                                                                                                                                                                                                                                                                                                                                 |       |   | (14.2         | )         |             |   |             |   |             | $ | (14.2             | ) |            |   |       |   |  |   |       |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                     | Total |   |               | (3,410.5  | )           |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |   | 
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Balance, December 31, 2000                                                                                                                                                                                                                                                                                                                                           |       |   |               |           |             |   | (434.7      | ) |             |   | (14.2             | ) |            |   |       |   |  |   |       |   |  |   | (4,951.1  | )
|Exercise of stock options
Non-cash compensation
Accreted dividends on preferred
stock
Accretion of discount on preferred
stock                                                                                                                                                                                                                                       |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Conversion of 7% Convertible Notes
Common stock issued for an
acquisition                                                                                                                                                                                                                                                                                            |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Comprehensive loss:                                                                                                                                                                                                                                                                                                                                                  |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Net loss for the year ended
December 31, 2001                                                                                                                                                                                                                                                                                                                        |       |   | (14,241.3     | )         |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   | (14,241.3 | )
|Currency translation adjustment                                                                                                                                                                                                                                                                                                                                      |       |   | (607.8        | )         |             |   | (607.8      | ) |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Unrealized net losses on investments                                                                                                                                                                                                                                                                                                                                 |       |   | (1.1          | )         |             |   |             |   |             |   | (1.1              | ) |            |   |       |   |  |   |       |   |  |   |           |  
|Unrealized net losses on derivatives                                                                                                                                                                                                                                                                                                                                 |       |   | (15.0         | )         |             |   |             |   |             |   |                   |   |            | $ | (15.0 | ) |  |   |       |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                     | Total |   |               | (14,865.2 | )           |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |   | 
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Balance, December 31, 2001                                                                                                                                                                                                                                                                                                                                           |       |   |               |           |             |   | (1,042.5    | ) |             |   | (15.3             | ) |            |   | (15.0 | ) |  |   |       |   |  |   | (19,192.4 | )
|Accreted dividends on preferred
stock
Accretion of discount on preferred
stock
Comprehensive loss:                                                                                                                                                                                                                                                                   |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Net loss for the year ended
December 31, 2002                                                                                                                                                                                                                                                                                                                        |       |   | (3,454.9      | )         |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   | (3,454.9  | )
|Currency translation adjustment                                                                                                                                                                                                                                                                                                                                      |       |   | 272.4         |           |             |   | 272.4       |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Reclassification adjustment                                                                                                                                                                                                                                                                                                                                          |       |   | 15.3          |           |             |   |             |   |             |   | 15.3              |   |            |   |       |   |  |   |       |   |  |   |           |  
|Additional minimum pension liability                                                                                                                                                                                                                                                                                                                                 |       |   | (30.0         | )         |             |   |             |   |             |   |                   |   |            |   |       |   |  | $ | (30.0 | ) |  |   |           |  
|Unrealized net losses on derivatives                                                                                                                                                                                                                                                                                                                                 |       |   | (15.1         | )         |             |   |             |   |             |   |                   |   |            |   | (15.1 | ) |  |   |       |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                     | Total |   | $             | (3,212.3  | )           |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |   | 
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  
|Balance, December 31, 2002                                                                                                                                                                                                                                                                                                                                           |       |   |               |           |             | $ | (770.1      | ) |             | $ |                  |   |            | $ | (30.1 | ) |  | $ | (30.0 | ) |  | $ | (22,647.3 | )
|                                                                                                                                                                                                                                                                                                                                                                     |       |   |               |           |             |   |             |   |             |   |                   |   |            |   |       |   |  |   |       |   |  |   |           |  

See accompanying notes.

F-7



---



##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Cash Flows
(dollars in millions)

|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |        |  
|------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | - | ----------------------- | ------ | ---- | - | --------- | ----- | - | - | --------- | ------ | -
|                                                                                                        |                                                 |   | Year Ended December 31,
|                                                                                                        |                                                 |   |                        
|                                                                                                        |                                                 |   | 2002                    |        | 2001 |   | 2000     
|                                                                                                        |                                                 |   |                         |        |      |   |          
|Operating activities                                                                                    |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net (loss)                                                                                              |                                                 | $ | (3,454.9                | )      |      | $ | (14,241.3 | )     |   | $ | (2,963.7  | )     
|(Loss) from discontinued operations                                                                     |                                                 |   | (2,100.6                | )      |      |   | (11,872.9 | )     |   |   | (2,407.5  | )     
|Net (loss) on sales of discontinued operations                                                          |                                                 |   | (5.7                    | )      |      |   |          |       |   |   |          |       
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Loss from continuing operations                                                                         |                                                 |   | (1,348.6                | )      |      |   | (2,368.4  | )     |   |   | (556.2    | )     
|Adjustments to reconcile to net cash provided by
(used in) continuing operations:                       |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|                                                                                                        | Depreciation and amortization                   |   |                         | 318.2  |      |   |           | 587.8 |   |   |           | 386.7  |  
|                                                                                                        | Asset impairments                               |   |                         | 854.3  |      |   |           | 912.1 |   |   |           |       |  
|                                                                                                        | Write-down of other assets                      |   |                         | 28.2   |      |   |           |      |   |   |           |       |  
|                                                                                                        | Equity in losses of unconsolidated subsidiaries |   |                         | 251.3  |      |   |           | 660.0 |   |   |           | 46.7   |  
|                                                                                                        | (Gain) loss on sale of assets                   |   |                         | (6.2   | )    |   |           | 58.2  |   |   |           |       |  
|                                                                                                        | Provision for losses on accounts receivable     |   |                         | 7.2    |      |   |           | 39.7  |   |   |           | 0.4    |  
|                                                                                                        | Deferred income taxes                           |   |                         | (127.5 | )    |   |           | (50.3 | ) |   |           | (23.1  | )
|                                                                                                        | Amortization of original issue discount         |   |                         |       |      |   |           | 0.2   |   |   |           | 0.3    |  
|                                                                                                        | Other                                           |   |                         | 1.9    |      |   |           | 51.2  |   |   |           | 1.1    |  
|Changes in operating assets and liabilities, net of
effect from business acquisitions and dispositions: |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|                                                                                                        | Accounts receivable                             |   |                         | (10.1  | )    |   |           | (13.0 | ) |   |           | (116.6 | )
|                                                                                                        | Other current assets                            |   |                         | (70.1  | )    |   |           | 31.2  |   |   |           | (18.8  | )
|                                                                                                        | Other assets                                    |   |                         | 4.5    |      |   |           | (5.2  | ) |   |           | 1.0    |  
|                                                                                                        | Accounts payable                                |   |                         | 8.0    |      |   |           | 2.8   |   |   |           | 11.4   |  
|                                                                                                        | Accrued expenses and other                      |   |                         | (33.1  | )    |   |           | 5.6   |   |   |           | 47.9   |  
|                                                                                                        | Deferred revenue                                |   |                         | 25.2   |      |   |           | 9.1   |   |   |           | 58.0   |  
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash (used in) continuing operations                                                                |                                                 |   | (96.8                   | )      |      |   | (79.0     | )     |   |   | (161.2    | )     
|Net cash provided by (used in) discontinued operations                                                  |                                                 |   | 251.9                   |        |      |   | (518.8    | )     |   |   | (129.0    | )     
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash provided by (used in) operating activities                                                     |                                                 |   | 155.1                   |        |      |   | (597.8    | )     |   |   | (290.2    | )     
|Investing activities                                                                                    |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Acquisitions, net of cash acquired                                                                      |                                                 |   |                        |        |      |   |          |       |   |   | (3,425.1  | )     
|Purchase of fixed assets                                                                                |                                                 |   | (120.8                  | )      |      |   | (245.2    | )     |   |   | (277.7    | )     
|Investments in and loans to affiliates                                                                  |                                                 |   | (15.9                   | )      |      |   | (125.8    | )     |   |   | (365.6    | )     
|Increase in other assets                                                                                |                                                 |   | (7.0                    | )      |      |   | (49.0     | )     |   |   | (121.5    | )     
|Loan to NTL (UK) Group, Inc.                                                                            |                                                 |   | (129.2                  | )      |      |   | 150.0     |       |   |   |          |       
|Proceeds from sales of assets                                                                           |                                                 |   | 432.2                   |        |      |   | 30.9      |       |   |   |          |       
|Loan to ATX Communications, Inc.                                                                        |                                                 |   |                        |        |      |   | (15.0     | )     |   |   |          |       
|Purchase of marketable securities                                                                       |                                                 |   | (63.5                   | )      |      |   |          |       |   |   | (155.1    | )     
|Proceeds from sales of marketable securities                                                            |                                                 |   | 46.3                    |        |      |   | 60.3      |       |   |   | 444.3     |       
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash provided by (used in) continuing operations                                                    |                                                 |   | 142.1                   |        |      |   | (193.8    | )     |   |   | (3,900.7  | )     
|Net cash (used in) discontinued operations                                                              |                                                 |   | (734.4                  | )      |      |   | (1,906.0  | )     |   |   | (9,527.5  | )     
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash (used in) investing activities                                                                 |                                                 |   | (592.3                  | )      |      |   | (2,099.8  | )     |   |   | (13,428.2 | )     

F-8



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Cash Flows  continued
(dollars in millions)

|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|------------------------------------------------------------------------ |  | ----------------------- | ------ | ---- |  | ---- | ------- | - |  | - | -------- | -
|                                                                         |  | Year Ended December 31,
|                                                                         |  |                        
|                                                                         |  | 2002                    |        | 2001 |  | 2000
|                                                                         |  |                         |        |      |  |     
|Financing activities                                                     |  |                         |        |      |  |      |         |   |  |   |          |  
|Proceeds from borrowings, net of financing costs                         |  |                         | 104.1  |      |  |      | 461.3   |   |  |   | 1,860.3  |  
|Proceeds from issuance of preferred stock and warrants                   |  |                         |       |      |  |      |        |   |  |   | 1,862.0  |  
|Proceeds from issuance of common stock                                   |  |                         |       |      |  |      |        |   |  |   | 2,327.6  |  
|Proceeds from issuance of redeemable preferred stock                     |  |                         |       |      |  |      |        |   |  |   | 1,850.0  |  
|Proceeds from exercise of stock options and warrants                     |  |                         |       |      |  |      | 13.0    |   |  |   | 44.2     |  
|Principal payments                                                       |  |                         | (2.9   | )    |  |      | (68.3   | ) |  |   | (39.1    | )
|Repayment of the NTL Australia bank loan                                 |  |                         | (121.7 | )    |  |      |        |   |  |   |         |  
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Net cash provided by (used in) continuing activities                     |  |                         | (20.5  | )    |  |      | 406.0   |   |  |   | 7,905.0  |  
|Net cash provided by discontinued activities                             |  |                         | 681.4  |      |  |      | 2,227.9 |   |  |   | 3,823.4  |  
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Net cash provided by financing activities                                |  |                         | 660.9  |      |  |      | 2,633.9 |   |  |   | 11,728.4 |  
|Effect of exchange rate changes on cash                                  |  |                         | 51.2   |      |  |      | (11.1   | ) |  |   | (27.8    | )
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Increase (decrease) increase in cash and cash equivalents                |  |                         | 274.9  |      |  |      | (74.8   | ) |  |   | (2,017.8 | )
|Cash and cash equivalents at beginning of year  continuing
operations   |  |                         | 228.3  |      |  |      | 126.4   |   |  |   | 1,510.2  |  
|Cash and cash equivalents at beginning of year  discontinued
operations |  |                         | 276.3  |      |  |      | 453.0   |   |  |   | 1,087.0  |  
|Cash and cash equivalents at end of year  discontinued operations       |  |                         | (502.0 | )    |  |      | (276.3  | ) |  |   | (453.0   | )
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Cash and cash equivalents at end of year  continuing operations         |  | $                       | 277.5  |      |  | $    | 228.3   |   |  | $ | 126.4    |  
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Supplemental disclosure of cash flow information                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Cash paid during the year for interest
exclusive of amounts capitalized  |  | $                       | 130.4  |      |  | $    | 171.3   |   |  | $ | 131.1    |  
|Income taxes paid                                                        |  |                         |       |      |  |      | 13.4    |   |  |   | 5.2      |  
|Supplemental schedule of non-cash financing activities                   |  |                         |        |      |  |      |         |   |  |   |          |  
|Accretion of dividend and discount on preferred stock                    |  | $                       | 145.1  |      |  | $    | 220.8   |   |  | $ | 98.1     |  
|Conversion of notes, net of unamortized deferred financing costs         |  |                         |       |      |  |      | 18.8    |   |  |   |         |  
|Common stock issued for acquisitions                                     |  |                         |       |      |  |      | 4.3     |   |  |   | 5,488.3  |  
|Redeemable preferred stock issued for investment in affiliates           |  |                         |       |      |  |      | 518.0   |   |  |   |         |  
|Conversion of series preferred stock                                     |  |                         |       |      |  |      |        |   |  |   | 7.6      |  

See accompanying notes.

F-9



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##### Table of Contents





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

Summary

The accompanying financial statements do not reflect any adjustments in
connection with the emergence of NTL Europe, Inc. (NTL Europe or the
Company) from Chapter 11 reorganization nor the likely deconsolidation of
Cablecom GmbH, an indirect wholly-owned subsidiary of the Company (Cablecom)
and, therefore, are not indicative of the Companys future results of
operations, financial position or cash flows.

NTLs Completed Restructuring

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

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

New NTL has been accounted for as a discontinued operation beginning with the
quarter ended September 30, 2002 and, accordingly, it is excluded from assets
and liabilities of continuing operations as of December 31, 2002 and 2001, and
from results of continuing operations for the years ended December 31, 2002,
2001 and 2000.

With the separation of Old NTL into two entities, the majority of the
significant assets and holdings formerly owned and consolidated by Old NTL were
retained by New NTL. Generally, other than Cablecom (which is itself being
restructured as described below), the Companys assets are not material
compared to those of New NTL. In addition, as described in more detail in Note
22, as a result of the existing defaults under Cablecoms debt agreements and
its overindebtedness, in the near future, the Company expects its interest in
Cablecom to be reduced to, at most, a small minority position. Further, the
Companys board of directors and management will explore the strategic and
financial alternatives available to it, including the Companys possible
liquidation, a going-private transaction and the sale of its remaining assets.
Accordingly, the Companys historic financial statements presented herein are
not particularly meaningful to the Companys current and anticipated future
business and should not be relied upon as indicative of the Companys future
performance.

Historical Structure of the Company

On May 18, 2000, the entity then known as NTL Incorporated (currently named NTL
(Delaware), Inc. (NTL Delaware)) completed a corporate restructuring to
create a holding company structure. The formation of the holding company was
part of NTL Delaware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 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 was called NTL Incorporated (which is now known as NTL Europe, Inc.)
and the holding companys subsidiary simultaneously changed its name to NTL
(Delaware), Inc.

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

F-10



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##### Table of Contents



NTL Europe, Inc. (formerly NTL
Incorporated) (Debtor-in-Possession) and SubsidiariesNotes to
Consolidated Financial Statements



|1. |  | Organization and Business (continued)
|-- |  | -------------------------------------

Business

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

Cablecom has approximately CHF 3,792 million in bank debt (which includes
recently accrued interest payments) maturing on the business day following May
31, 2003 (with an additional automatic extension to June 30, 2003 under certain
circumstances), and insufficient resources to satisfy such obligation. In
addition, Cablecom and two of its subsidiaries are overindebted under Swiss
law and, accordingly, may be required to file for insolvency proceedings in
Switzerland. Cablecom and its lenders have been involved in ongoing
discussions regarding a complete financial restructuring of Cablecom which
will, among other things, reduce the amount of bank debt outstanding, extend
the maturity date thereof and resolve the Swiss overindebtedness issue. In the
event that such negotiations are unsuccessful, the Company expects to be
deprived of all of its ownership interest in Cablecom in the near future.
Further, even if such negotiations are successful, the Company expects to be
left with no more than a small minority interest in Cablecom. Accordingly, the
Company anticipates that, in the near future, the results of Cablecom will no
longer be reported as part of the Companys consolidated results of operations.
In that regard, it should also be noted that, in accordance with the terms of
the existing Cablecom credit agreement, no dividends, distributions or other
payments have ever been or will be made by Cablecom to the Company. Further,
the lenders under Cablecoms credit facility have no legal recourse to any
assets of the NTL Europe group, other than to the shares of Cablecom, certain
assets of the Cablecom group and certain assets of the Companys subsidiaries
which hold, directly or indirectly, the shares of the Cablecom group.

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

The Companys most significant holdings are currently being restructured, and
the Company is reviewing all of its holdings to determine the most appropriate
course of action, which may result in one or more of these holdings being sold,
transferred, foreclosed on, liquidated, wound-up or otherwise disposed of in
the near future or at a later date. The Company may not receive any proceeds
from any of these transactions after the payment of outstanding debt that some
of these companies may owe and any fees and expenses incurred in connection
with these transactions. See, in particular, Note 22 Commitments and
Contingent Liabilities  Cablecom. To the extent the Company receives cash
proceeds from any asset sale it or its subsidiaries complete, the Preferred
Stock will be entitled to mandatory redemption in a like amount, subject to
some limited exceptions set forth in the Companys charter, until all shares of
the Preferred Stock (having an aggregate of $343 million in liquidation
preference) have been redeemed.



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

Background of Restructuring

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

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

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

F-11



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##### Table of Contents



NTL Europe, Inc. (formerly NTL
Incorporated) (Debtor-in-Possession) and SubsidiariesNotes to
Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

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

As a result of the payment defaults, as well as the voluntary filing under
Chapter 11 by Old NTL and certain of its subsidiaries, on May 8, 2002, there
was an event of default under all of Old NTL and its subsidiaries credit
facilities and the indentures governing all of their publicly traded debt,
other than debt of NTL (Triangle) LLC.

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

Liquidity and Capital Resources

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

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

As described in Notes 1, 2 and 22, the Company expects to either complete a
restructuring of the debt and equity of Cablecom, in the near future, which
would result in a dilution of the Companys ownership interest to less than
five percent or, if such restructuring is not successful, to file for the
insolvency of Cablecom in Switzerland, which would result in the Companys
having no remaining ownership in Cablecom. In either of these events, the
lenders under Cablecoms credit facility would have no legal recourse to any
assets of the NTL Europe group, other than to the shares of Cablecom, certain
assets of the Cablecom group and certain assets of the Companys subsidiaries
which hold, directly or indirectly, the shares of the Cablecom group.

The Companys management and Board will explore strategic and financial
alternatives available to it, including the Companys possible liquidation, a
going-private transaction and the sale of its remaining assets. During 2003,
the Companys primary expenses are expected to consist of operating expenses,
including salaries, professional fees, insurance and severance costs, as well
as certain funding obligations to certain of its subsidiaries of approximately
$13 million. Further, after reserving for certain contingent liabilities, to
the extent the Company has remaining funds legally available, the Company
intends to pay dividends on or redeem shares of its Preferred Stock. The
liquidation preference of Preferred Stock aggregates $343 million.
Accordingly, it is highly unlikely that common shareholders will ever receive
any distribution related to their shares.

F-12



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##### Table of Contents



NTL Europe, Inc. (formerly NTL
Incorporated) (Debtor-in-Possession) and SubsidiariesNotes to
Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

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

Recapitalization Expense

The joint reorganization plan provided that recapitalization costs be allocated
among the Company, NTL Delaware and New NTL.

Recapitalization items, net consist of the following:

|                                                                   |  |      |              |      |  |               |   |  |  |   |   | 
|------------------------------------------------------------------ |  | ---- | ------------ | ---- |  | ------------- | - |  |  | - | - | 
|                                                                   |  |      | Year Ended   |      |  |               |   |  |  |  
|                                                                   |  |      | December 31, |      |  |               |   |  |  |  
|                                                                   |  |      |              |      |  |              
|                                                                   |  | 2002 |              | 2001 |  | 2000         
|                                                                   |  |      |              |      |  |              
|                                                                   |  |      |              |      |  | (in millions)
|Payroll and related costs paid                                     |  | $    | (0.1         | )    |  | $             |  |  |  | $ |  | 
|Professional fees                                                  |  |      | (6.9         | )    |  |               |  |  |  |   |  | 
|Interest earned on accumulated cash from Chapter 11 proceeding (1) |  |      | 2.2          |      |  |               |  |  |  |   |  | 
|                                                                   |  |      |              |      |  |               |   |  |  |   |   | 
|                                                                   |  | $    | (4.8         | )    |  | $             |  |  |  | $ |  | 
|                                                                   |  |      |              |      |  |               |   |  |  |   |   | 

Details of operating cash receipts and payments resulting from the
recapitalization are as follows. The Company and NTL Delaware made payments on
behalf of New NTL which were charged to New NTL. The recapitalization items
charged to New NTL are included in loss from discontinued operations.

|                                                     |  |                   |       |  
|---------------------------------------------------- |  | ----------------- | ----- | -
|                                                     |  | Year Ended       
|                                                     |  | December 31, 2002
|                                                     |  |                  
|                                                     |  | (in millions)    
|Interest income (1)                                  |  | $                 | 2.2   |  
|Payroll and related costs paid                       |  |                   |      |  
|Professional fees                                    |  |                   | (45.9 | )
|                                                     |  |                   |       |  
|Net operating cash flows from recapitalization items |  | $                 | (43.7 | )
|                                                     |  |                   |       |  



---

|(1) |  | Interest income resulting from the recapitalization is for the period May
8, 2002 through December 31, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------

Pro Forma Consolidated Balance Sheet

The following pro forma consolidated balance sheet as of December 31, 2002
gives effect to the Companys emergence from Chapter 11 reorganization and the
adoption of fresh-start reporting as if both had occurred on December 31, 2002.
The Company adopted fresh-start reporting in January 2003 in accordance with
AICPA Statement of Position 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code (SOP 90-7). The Company adopted
fresh-start reporting because the holders of Old NTLs voting common shares
immediately before filing and confirmation of the Plan received less than 50%
of the voting shares of the emerging company, and because the Companys
reorganization value is less than its post-petition liabilities and allowed
claims.

The adjustments entitled Emergence from Chapter 11 reflect the consummation
of the Plan, including the cancellation of all of Old NTLs outstanding
securities, including common stock, and the authorization of the issuance of
19,668,777 shares of Common Stock, together with associated preferred stock
purchase rights, and 7,364,000 shares of Preferred Stock. In accordance with
the reorganization plan, the Company has reserved 2,000,000 shares of Common
Stock for issuance upon exercise of the management incentive options authorized
for grant under the management incentive plan. The Company has not issued, and
it currently has no plans to issue, any options under the management incentive
plan.

The order confirming the Plan authorized and approved, as of the effective
date, the redemption for cash of $25 million of the Preferred Stock. This
redemption occurred on the Effective Date. Following such redemption,
approximately 6,864,000 shares of Preferred Stock remain outstanding, having a
liquidation preference of approximately $343 million.

F-13



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##### Table of Contents



NTL Europe, Inc. (formerly NTL
Incorporated) (Debtor-in-Possession) and SubsidiariesNotes to
Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

The adjustments entitled Fresh-Start reflect the adoption of fresh-start
reporting. The Company engaged an independent financial advisor to assist in
the determination of the reorganization value (or fair value) of its assets and
the present value of its liabilities. This determination resulted in the
fresh-start reporting adjustments to write-down fixed assets and write-up of
intangible assets to their fair values. The determination of the
reorganization value is preliminary since the valuation of certain of the
Companys assets is still in process. In addition, the Companys total
reorganization value exceeded the amounts allocable to identifiable assets that
resulted in a new indefinite-lived intangible asset.

The emergence from Chapter 11 and the adoption of fresh-start reporting in
January 2003 resulted in the following items of income (expense) that will be
recognized in the Companys financial statements for the quarter ended March
31, 2003:

|                                              |  |               |         |  
|--------------------------------------------- |  | ------------- | ------- | -
|                                              |  | (in millions)
|                                              |  |              
|Gain on debt discharge                        |  | $             | 4,059.2 |  
|Gain related to deconsolidation of New NTL    |  |               | 4,988.1 |  
|Fresh-start adoption  intangible assets      |  |               | 142.1   |  
|Fresh-start adoption  long-term debt         |  |               | 1,284.9 |  
|Fresh-start adoption  deferred tax liability |  |               | (13.5   | )
|Fresh-start adoption  accrued pension        |  |               | (61.2   | )
|Fresh-start adoption  fixed assets           |  |               | (507.0  | )
|Fresh-start adoption  other assets           |  |               | (33.5   | )
|                                              |  |               |         |  
|TOTAL                                         |  | $             | 9,859.1 |  
|                                              |  |               |         |  

The adjustments entitled Deconsolidation of Cablecom reflect the likelihood
that the Company will not retain a significant interest in Cablecom and that
Cablecom will no longer be reported as part of the Companys consolidated
results of operations. As described in more detail in Note 22 (Commitments and
Contingent Liabilities  Cablecom), Cablecom has approximately CHF 3,792
million in bank debt (which includes recently accrued interest payments)
maturing on the business day following May 31, 2003 (with an additional
automatic extension to June 30, 2003 under certain circumstances), and
insufficient resources to satisfy such obligation. In addition, Cablecom and
two of its subsidiaries are overindebted under Swiss law and, accordingly,
may be required to file for insolvency proceedings in Switzerland. Cablecom
and its lenders have been involved in ongoing discussions regarding a complete
financial restructuring of Cablecom which will, among other things, reduce the
amount of bank debt outstanding, extend the maturity date thereof and resolve
the Swiss overindebtedness issue. In the event that such negotiations are
unsuccessful, the Company expects to be deprived of all of its ownership
interest in Cablecom in the near future. Further, even if such negotiations
are successful, the Company expects to be left with no more than a small
minority interest in Cablecom. Accordingly, the Company anticipates that, in
the near future, the results of Cablecom will no longer be reported as part of
the Companys consolidated results of operations. In that regard, it should
also be noted that, in accordance with the terms of the existing Cablecom
credit agreement, no dividends, distributions or other payments have ever been
or will be made by Cablecom to the Company. Further, the lenders under
Cablecoms credit facility have no legal recourse to any assets of the NTL
Europe group, other than to the shares of Cablecom, certain assets of the
Cablecom group and certain assets of the Companys subsidiaries which hold,
directly or indirectly, the shares of the Cablecom group.

F-14



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##### Table of Contents



NTL Europe, Inc. (formerly NTL
Incorporated) (Debtor-in-Possession) and SubsidiariesNotes to
Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |   | 
|----------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------------------- | -------- | ------------- | - | ---------- | --------- | --------- | - | --------------- | -------- | --------------- | - | -------- | ------- | ------------- | - | ----- | -------- | -------- | - | - | ------- | --------- | - | 
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         | Pro Forma
|                                                                                                      |                                                                 |                        |          | Historical as |   | Emergence  |           |           |   |                 |          | Before          |   |          |         |               |   | as of
|                                                                                                      |                                                                 |                        |          | of December   |   | from       |           | Fresh-    |   | Deconsolidation |          | Deconsolidation |   | December
|                                                                                                      |                                                                 |                        |          | 31, 2002      |   | Chapter 11 |           | Start     |   | of Cablecom     |          | of Cablecom     |   | 31, 2002
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |         
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         | (in millions) |   |       |          |          |   |   |         |          
|Assets
Current assets:                                                                                |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |          
|                                                                                                      | Cash and cash equivalents                                       |                        | $        | 277.5         |   |            | $         | (117.7    | ) |                 | $        |                |   |          | $       | 159.8         |   |       | $        | (85.9    | ) |   | $       | 73.9      |  
|                                                                                                      | Marketable securities                                           |                        |          | 17.3          |   |            |           | (17.3     | ) |                 |          |                |   |          |         |              |   |       |          |         |   |   |         |          |  
|                                                                                                      | Accounts receivable-trade, less allowance
for doubtful accounts |                        |          | 243.4         |   |            |           |          |   |                 |          |                |   |          |         | 243.4         |   |       |          | (230.8   | ) |   |         | 12.6      |  
|                                                                                                      | Other                                                           |                        |          | 50.3          |   |            |           |          |   |                 |          |                |   |          |         | 50.3          |   |       |          | (38.5    | ) |   |         | 11.8      |  
|                                                                                                      | Discontinued operations                                         |                        |          | 12,968.1      |   |            |           | (12,968.1 | ) |                 |          |                |   |          |         |              |   |       |          | 2,189.1  |   |   |         | 2,189.1   |  
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  
|Total current assets                                                                                  |                                                                 |                        | 13,556.6 |               |   |            | (13,103.1 | )         |   |                 |         |                 |   |          | 453.5   |               |   |       | 1,833.9  |          |   |   | 2,287.4 |          
|Fixed assets, net                                                                                     |                                                                 |                        | 1,682.1  |               |   |            |          |           |   |                 | (506.9   | )               |   |          | 1,175.2 |               |   |       | (1,166.8 | )        |   |   | 8.4     |          
|Goodwill                                                                                              |                                                                 |                        | 218.7    |               |   |            |          |           |   |                 | (218.7   | )               |   |          |        |               |   |       |         |          |   |   |        |          
|Reorganization value in excess of amounts
allocable to identifiable assets                            |                                                                 |                        |         |               |   |            |          |           |   |                 | 213.9    |                 |   |          | 213.9   |               |   |       | (213.9   | )        |   |   |        |          
|Customer lists, net                                                                                   |                                                                 |                        | 62.8     |               |   |            |          |           |   |                 | 146.8    |                 |   |          | 209.6   |               |   |       | (209.6   | )        |   |   |        |          
|Investments in and loans to affiliates, net                                                           |                                                                 |                        | 13.0     |               |   |            |          |           |   |                 |         |                 |   |          | 13.0    |               |   |       | (7.7     | )        |   |   | 5.3     |          
|Deferred tax asset                                                                                    |                                                                 |                        | 195.3    |               |   |            |          |           |   |                 | 80.4     |                 |   |          | 275.7   |               |   |       | (235.5   | )        |   |   | 40.2    |          
|Other assets, net                                                                                     |                                                                 |                        | 120.9    |               |   |            | (22.5     | )         |   |                 | (50.8    | )               |   |          | 47.6    |               |   |       | (0.4     | )        |   |   | 47.2    |          
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  
|Total assets                                                                                          |                                                                 | $                      | 15,849.4 |               |   | $          | (13,125.6 | )         |   | $               | (335.3   | )               |   | $        | 2,388.5 |               |   | $     |         |          |   | $ | 2,388.5 |          
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  
|Liabilities and shareholders (deficiency)
Liabilities not subject to compromise
Current liabilities: |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |          
|                                                                                                      | Accounts payable                                                |                        | $        | 49.3          |   |            | $         |          |   |                 | $        |                |   |          | $       | 49.3          |   |       | $        | (40.6    | ) |   | $       | 8.7       |  
|                                                                                                      | Accrued expenses and other                                      |                        |          | 92.5          |   |            |           | (1.2      | ) |                 |          |                |   |          |         | 91.3          |   |       |          | (64.2    | ) |   |         | 27.1      |  
|                                                                                                      | Interest payable                                                |                        |          | 43.5          |   |            |           |          |   |                 |          |                |   |          |         | 43.5          |   |       |          | (43.5    | ) |   |         |          |  
|                                                                                                      | Deferred revenue                                                |                        |          | 235.6         |   |            |           |          |   |                 |          |                |   |          |         | 235.6         |   |       |          | (229.8   | ) |   |         | 5.8       |  
|                                                                                                      | Current portion of long-term debt                               |                        |          | 2,719.3       |   |            |           |          |   |                 |          | (1,284.9        | ) |          |         | 1,434.4       |   |       |          | (1,434.4 | ) |   |         |          |  
|                                                                                                      | Discontinued operations                                         |                        |          | 17,956.2      |   |            |           | (17,956.2 | ) |                 |          |                |   |          |         |              |   |       |          | 2,189.1  |   |   |         | 2,189.1   |  
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  
|Total
current liabilities                                                                             |                                                                 |                        | 21,096.4 |               |   |            | (17,957.4 | )         |   |                 | (1,284.9 | )               |   |          | 1,854.1 |               |   |       | 376.6    |          |   |   | 2,230.7 |          
|Long-term debt                                                                                        |                                                                 |                        |         |               |   |            |          |           |   |                 |         |                 |   |          |        |               |   |       |         |          |   |   |         |          
|Other                                                                                                 |                                                                 |                        | 132.7    |               |   |            |          |           |   |                 | (16.4    | )               |   |          | 116.3   |               |   |       | (96.9    | )        |   |   | 19.4    |          
|Deferred income taxes                                                                                 |                                                                 |                        | 226.0    |               |   |            |          |           |   |                 | 93.9     |                 |   |          | 319.9   |               |   |       | (279.7   | )        |   |   | 40.2    |          
|Commitments and contingent liabilities                                                                |                                                                 |                        |         |               |   |            |          |           |   |                 |         |                 |   |          |        |               |   |       |         |          |   |   |        |          
|Senior Redeemable Preferred                                                                           |                                                                 |                        |         |               |   |            | 98.0      |           |   |                 |         |                 |   |          | 98.0    |               |   |       |         |          |   |   | 98.0    |          
|Liabilities subject to compromise                                                                     |                                                                 |                        | 4,294.1  |               |   |            | (4,294.1  | )         |   |                 |         |                 |   |          |        |               |   |       |         |          |   |   |        |          
|Shareholders (deficiency):                                                                           |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |          
|                                                                                                      |                                                                 | Series preferred stock |          |               |  |            |           |           |  |                 |          |                 |  |          |         |               |  |       |          |          |  |   |         |           |  | 
|                                                                                                      | Common stock-old                                                |                        |          | 2.8           |   |            |           | (2.8      | ) |                 |          |                |   |          |         |              |   |       |          |         |   |   |         |          |  
|                                                                                                      | Common stock-new                                                |                        |          |              |   |            |           | 0.2       |   |                 |          |                |   |          |         | 0.2           |   |       |          |         |   |   |         | 0.2       |  
|                                                                                                      | Additional paid-in capital                                      |                        |          | 13,574.9      |   |            |           |          |   |                 |          | (13,574.9       | ) |          |         |              |   |       |          |         |   |   |         |          |  
|                                                                                                      | Accumulated other comprehensive (loss)                          |                        |          | (830.2        | ) |            |           |           |   |                 |          | 830.2           |   |          |         |              |   |       |          |         |   |   |         |          |  
|                                                                                                      | (Deficit)                                                       |                        |          | (22,647.3     | ) |            |           | 9,030.5   |   |                 |          | 13,616.8        |   |          |         |              |   |       |          |         |   |   |         |          |  
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  
|Shareholders (deficiency)                                                                            |                                                                 |                        | (9,899.8 | )             |   |            | 9,027.9   |           |   |                 | 872.1    |                 |   |          | 0.2     |               |   |       |         |          |   |   | 0.2     |          
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  
|Total liabilities and shareholders
(deficiency)                                                      |                                                                 | $                      | 15,849.4 |               |   | $          | (13,125.6 | )         |   | $               | (335.3   | )               |   | $        | 2,388.5 |               |   | $     |         |          |   | $ | 2,388.5 |          
|                                                                                                      |                                                                 |                        |          |               |   |            |           |           |   |                 |          |                 |   |          |         |               |   |       |          |          |   |   |         |           |  

F-15



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##### Table of Contents



NTL Europe, Inc. (formerly NTL
Incorporated) (Debtor-in-Possession) and SubsidiariesNotes to
Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies
|-- |  | -------------------------------

Basis of Presentation and Use of Estimates



| |  | The accompanying financial statements have been prepared on a going concern
basis. As described in Notes 1, 2 and 22, the Company expects to either
complete a restructuring of the debt and equity of Cablecom in the near future,
which would result in a dilution of the Companys ownership interest to less
than five percent or, if such restructuring is not successful, to file for the
insolvency of Cablecom in Switzerland, which would result in the Company having
no remaining ownership in Cablecom. In either of these events, the lenders
under Cablecoms credit facility would have no legal recourse to any assets of
the NTL Europe group, other than to the shares of Cablecom, certain assets of
the Cablecom group and certain assets of the Companys subsidiaries which hold,
directly or indirectly, the shares of the Cablecom group.                                                  
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Companys management and Board will explore strategic and financial
alternatives available to it, including the Companys possible liquidation, a
going-private transaction and the sale of its remaining assets. During 2003,
the Companys primary expenses are expected to consist of salaries,
professional fees, insurance and severance payments, as well as, certain
funding obligations to selected subsidiaries of approximately $13 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | After the consummation of the Companys restructuring on January 10, 2003, the
Company had approximately $63 million in cash and its subsidiaries had
approximately $11 million in cash, which management believes will be adequate
to finance the Companys operating expenses and funding requirements through at
least January 1, 2004. Further, after reserving for certain contingent
liabilities, to the extent the Company has remaining funds legally available,
the Company intends to pay dividends on or redeem shares of its Preferred
Stock. The liquidation preference of the Preferred Stock aggregates $343
million. Accordingly, it is highly unlikely that common shareholders will ever
receive any distribution related to their shares. However, as noted above, the
Company should be able to pay its liabilities and funding requirements as they
come due through at least January 1, 2004.
|
| |  | The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States,
including AICPA Statement of Position 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code (SOP 90-7). Old NTL had determined
that there was insufficient collateral to cover the interest portion of
scheduled payments on certain of its prepetition debt obligations. Old NTL had
therefore discontinued accruing interest on these obligations. For the year
ended December 31, 2002, contractual interest was $223.5 million, which was
$67.4 million in excess of reported interest expense.                                                                                                                                                                                                                        
|
| |  | The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions impact, among
others, the following: the amount of uncollectible accounts and notes
receivable, the amount to be paid for other liabilities, the Companys pension
expense and pension funding requirements, and estimates related to the value of
investments, long-lived assets and goodwill. Actual results could differ from
those estimates.                                                                                                                                                                                                                                                               

Principles of Consolidation

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

Reclassification

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

Foreign Currency Translation

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

F-16



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated)
(Debtor-in-Possession) and Subsidiares
Notes to Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------

Cash Equivalents

Cash equivalents are short-term highly liquid investments purchased with a
maturity of three months or less. Cash equivalents were $174.5 million and
$125.0 million at December 31, 2002 and 2001, respectively, which consisted
primarily of bank time deposits and corporate commercial paper. At December
31, 2002 and 2001, none and $1.5 million, respectively, of the cash equivalents
were denominated in foreign currencies.

Marketable Securities

Marketable securities at December 31, 2002 consist of commercial paper.
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 are included in interest income. The cost of securities sold or
matured is based on the specific identification method. Interest on securities
is included in interest income.

During the years ended December 31, 2002, 2001 and 2000, there were no realized
gains or losses on sales of securities.

Fixed Assets

Fixed assets are stated at cost, which includes amounts capitalized for labor
and overhead expended in connection with the design and installation of
operating equipment. Internal costs directly related to the construction of
such facilities, including payroll and overhead costs of certain employees, are
capitalized. Depreciation is computed by the straight-line method over the
estimated useful lives of the assets. Estimated useful lives of fixed assets
range from 5 years to 30 years.

Intangible Assets

Intangible assets include goodwill and customer lists. Goodwill is the excess
of the purchase price over the fair value of net assets acquired in business
combinations accounted for as purchases. Prior to the adoption of SFAS No.
142, Goodwill and Other Intangible Assets, goodwill was amortized on a
straight-line basis over 10 years. Upon the adoption of SFAS No. 142, goodwill
is no longer amortized. Instead goodwill is reviewed annually (or more
frequently under certain conditions) for impairment in accordance with this
statement.

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.

Impairment of Long-Lived Assets

Long-lived assets, including fixed assets and amortizable definite lived
intangible 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-17



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated)
(Debtor-in-Possession) and Subsidiares
Notes to Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------

Investments

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

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

Deferred Financing Costs

Deferred financing costs, net of $37.4 million and $74.8 million as of December
31, 2002 and 2001, respectively, are included in other assets. Deferred
financing costs are incurred in connection with the issuance of debt and are
amortized over the term of the related debt.

Revenue Recognition

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

Cable Television System Costs, Expenses and Revenues

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

Advertising Expense

The Company charges the cost of advertising to expense as incurred.
Advertising costs were $9.4 million, $13.1 million and $19.0 million in 2002,
2001 and 2000, respectively.

Stock-Based Compensation

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

F-18



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated)
(Debtor-in-Possession) and Subsidiares
Notes to Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------

Stock-Based Compensation (continued)

Had compensation for stock options granted by Old NTL been determined
consistent with the provisions of SFAS No. 123, the effect on Old NTLs net
loss would have been changed to the following pro forma amounts (See Note 19):

|                                                 |  |                                         |          |      |  |      |           |   |  |   |          |  
|------------------------------------------------ |  | --------------------------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                 |  | For the Year Ended December 31,        
|                                                 |  |                                        
|                                                 |  | 2002                                    |          | 2001 |  | 2000
|                                                 |  |                                         |          |      |  |     
|                                                 |  | (in millions, except per share amounts)
|Non-cash compensation expense, as reported       |  | $                                       |         |      |  | $    | 30.6      |   |  | $ |         |  
|Non-cash compensation expense, pro forma         |  | $                                       | 264.3    |      |  | $    | 268.3     |   |  | $ | 255.8    |  
|Net loss, as reported                            |  | $                                       | (3,454.9 | )    |  | $    | (14,241.3 | ) |  | $ | (2,963.7 | )
|Net loss, pro forma                              |  | $                                       | (3,719.2 | )    |  | $    | (14,509.6 | ) |  | $ | (3,219.5 | )
|Basic and diluted net (loss) per share           |  | $                                       | (13.02   | )    |  | $    | (52.78    | ) |  | $ | (14.54   | )
|Basic and diluted pro forma net (loss) per share |  | $                                       | (13.97   | )    |  | $    | (53.75    | ) |  | $ | (15.72   | )

Derivative Financial Instruments

Old NTL has used financial instruments to hedge a portion, but not all, of its
exposure from floating interest rate debt and from movements in foreign
exchange rates. Gains and losses on these instruments were deferred and
recognized in the statement of operations when the related hedged transactions
were 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.

4. Discontinued Operations

Pursuant to the Plan, Old NTL was split into two separate companies on the
Effective Date. The entity formerly known as NTL Communications Corp. was
renamed NTL Incorporated and became the holding company for Old NTLs
principal UK and Ireland assets. Prior to consummation of the Plan, NTL
Communications Corp. was a wholly-owned subsidiary of Old NTL, which, pursuant
to the Plan, was renamed NTL Europe, Inc. and which became the holding
company for Old NTLs European and certain other assets. Pursuant to the Plan,
all of the outstanding securities of the Old NTL and certain of its
subsidiaries were canceled, and the Company issued shares of its Common Stock
and Preferred Stock and New NTL issued shares of its common stock and Series A
warrants to various former creditors and stockholders of the Old NTL and its
subsidiaries. The precise mix of new securities received by holders of each
particular type of security of Old NTL and its subsidiaries was set forth in
the Plan.

New NTL is accounted for as a discontinued operation, and accordingly, it is
excluded from assets and liabilities of continuing operations as of December
31, 2002 and 2001, and from results of continuing operations for the years
ended December 31, 2002, 2001 and 2000.

On April 2, 2002, Old NTL had completed the previously announced sale of its
Australian broadcast business to Macquarie Communications Infrastructure
Holding Pty Limited for A$850 million (US$451.3 million). The net proceeds
from the sale after the repayment of the outstanding bank credit facility and
transaction related costs were approximately A$575.3 million (US$304.5
million). Old NTL recognized a gain on the sale of approximately US$7.5
million, net of income tax expense of US$4.6 million, in April 2002. NTL
Australia is accounted for as a discontinued operation and, accordingly, NTL
Australia is excluded from assets and liabilities of continuing operations as
of December 31, 2002 and 2001 and from results of continuing operations for the
years ended December 31, 2002, 2001 and 2000.

In October 2002, Cablecom sold its consumer electronics retail stores
(Rediffusion) for approximately CHF 5.0 million. The Company recognized a
loss on the sale of approximately US$13.2 million in October 2002. Rediffusion
is accounted for as a discontinued operation and, accordingly, Rediffusion is
excluded from assets and liabilities of continuing operations as of December
31, 2002 and 2001 and from results of continuing operations for the years ended
December 31, 2002, 2001 and 2000.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated)
(Debtor-in-Possession) and Subsidiares
Notes to Consolidated Financial Statements (continued)



|4. |  | Discontinued Operations (continued)
|-- |  | -----------------------------------

The following are the assets, liabilities and results of operations of New NTL, NTL Australia and Rediffusion:

|                                  |  |     |          |           |  |                   |   |       |  |   |   |  |  |   |          | 
|--------------------------------- |  | --- | -------- | --------- |  | ----------------- | - | ----- |  | - | - |  |  | - | -------- | 
|                                  |  |     |          |           |  | December 31, 2002 |   |       |  |  
|                                  |  |     |          |           |  | (in millions)     |   |       |  |  
|                                  |  |     |          |           |  |                   |   |       |  |  
|                                  |  | New |          | NTL       |  |                   |   |       |  |   |   | 
|                                  |  | NTL |          | Australia |  | Rediffusion       |   | Total
|                                  |  |     |          |           |  |                   |   |      
|Current assets                    |  | $   | 1,097.4  |           |  | $                 |  |       |  | $ |  |  |  | $ | 1,097.4  | 
|Fixed assets, net                 |  |     | 11,088.9 |           |  |                   |  |       |  |   |  |  |  |   | 11,088.9 | 
|Other assets                      |  |     | 781.8    |           |  |                   |  |       |  |   |  |  |  |   | 781.8    | 
|                                  |  |     |          |           |  |                   |   |       |  |   |   |  |  |   |          | 
|Total assets                      |  | $   | 12,968.1 |           |  | $                 |  |       |  | $ |  |  |  | $ | 12,968.1 | 
|                                  |  |     |          |           |  |                   |   |       |  |   |   |  |  |   |          | 
|Current liabilities               |  | $   | 7,729.2  |           |  | $                 |  |       |  |   |  |  |  | $ | 7,729.2  | 
|Non current liabilities           |  |     | 94.4     |           |  |                   |  |       |  |   |  |  |  |   | 94.4     | 
|Liabilities subject to compromise |  |     | 10,132.6 |           |  |                   |  |       |  |   |  |  |  |   | 10,132.6 | 
|                                  |  |     |          |           |  |                   |   |       |  |   |   |  |  |   |          | 
|Total liabilities                 |  | $   | 17,956.2 |           |  | $                 |  |       |  | $ |  |  |  | $ | 17,956.2 | 
|                                  |  |     |          |           |  |                   |   |       |  |   |   |  |  |   |          | 

|                        |  |     |          |           |  |                   |       |       |  |   |      |  |  |   |          | 
|----------------------- |  | --- | -------- | --------- |  | ----------------- | ----- | ----- |  | - | ---- |  |  | - | -------- | 
|                        |  |     |          |           |  | December 31, 2001 |       |       |  |  
|                        |  |     |          |           |  | (in millions)     |       |       |  |  
|                        |  |     |          |           |  |                   |       |       |  |  
|                        |  | New |          | NTL       |  |                   |       |       |  |   |      | 
|                        |  | NTL |          | Australia |  | Rediffusion       |       | Total
|                        |  |     |          |           |  |                   |       |      
|Current assets          |  | $   | 1,002.7  |           |  | $                 | 32.0  |       |  | $ | 32.1 |  |  | $ | 1,066.8  | 
|Fixed assets, net       |  |     | 10,840.3 |           |  |                   | 235.2 |       |  |   | 2.9  |  |  |   | 11,078.4 | 
|Other assets            |  |     | 1,027.1  |           |  |                   | 137.9 |       |  |   | 20.8 |  |  |   | 1,185.8  | 
|                        |  |     |          |           |  |                   |       |       |  |   |      |  |  |   |          | 
|Total assets            |  | $   | 12,870.1 |           |  | $                 | 405.1 |       |  | $ | 55.8 |  |  | $ | 13,331.0 | 
|                        |  |     |          |           |  |                   |       |       |  |   |      |  |  |   |          | 
|Current liabilities     |  | $   | 16,087.3 |           |  | $                 | 71.1  |       |  | $ | 29.3 |  |  | $ | 16,187.7 | 
|Non current liabilities |  |     | 122.7    |           |  |                   | 111.9 |       |  |   | 3.9  |  |  |   | 238.5    | 
|                        |  |     |          |           |  |                   |       |       |  |   |      |  |  |   |          | 
|Total liabilities       |  | $   | 16,210.0 |           |  | $                 | 183.0 |       |  | $ | 33.2 |  |  | $ | 16,426.2 | 
|                        |  |     |          |           |  |                   |       |       |  |   |      |  |  |   |          | 

|                 |  |     |          |           |  |                              |      |       |  |   |      |   |  |   |          |  
|---------------- |  | --- | -------- | --------- |  | ---------------------------- | ---- | ----- |  | - | ---- | - |  | - | -------- | -
|                 |  |     |          |           |  | Year Ended December 31, 2002 |      |       |  |  
|                 |  |     |          |           |  | (in millions)                |      |       |  |  
|                 |  |     |          |           |  |                              |      |       |  |  
|                 |  | New |          | NTL       |  |                              |      |       |  |   |      |  
|                 |  | NTL |          | Australia |  | Rediffusion                  |      | Total
|                 |  |     |          |           |  |                              |      |      
|Revenues         |  | $   | 3,256.5  |           |  | $                            | 17.3 |       |  | $ | 49.8 |   |  | $ | 3,323.6  |  
|Operating (loss) |  |     | (1,128.4 | )         |  |                              | 0.3  |       |  |   | (7.1 | ) |  |   | (1,135.2 | )
|Net (loss)       |  |     | (2,093.4 | )         |  |                              | (0.3 | )     |  |   | (6.9 | ) |  |   | (2,100.6 | )

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

4. Discontinued Operations (continued)

|                 |  |                              |           |           |  |             |      |       |  |   |       |   |  |   |           |  
|---------------- |  | ---------------------------- | --------- | --------- |  | ----------- | ---- | ----- |  | - | ----- | - |  | - | --------- | -
|                 |  | Year Ended December 31, 2001
|                 |  | (in millions)               
|                 |  | New                          |           | NTL       |  |             |      |       |  |   |       |  
|                 |  | NTL                          |           | Australia |  | Rediffusion |      | Total
|                 |  |                              |           |           |  |             |      |      
|Revenues         |  | $                            | 3,181.5   |           |  | $           | 61.8 |       |  | $ | 64.3  |   |  | $ | 3,307.6   |  
|Operating (loss) |  |                              | (10,409.7 | )         |  |             | (7.4 | )     |  |   | (15.4 | ) |  |   | (10,432.5 | )
|Net (loss)       |  |                              | (11,850.8 | )         |  |             | (6.5 | )     |  |   | (15.6 | ) |  |   | (11,872.9 | )

|                 |  |                              |          |           |  |             |       |       |  |   |      |  |  |   |          |  
|---------------- |  | ---------------------------- | -------- | --------- |  | ----------- | ----- | ----- |  | - | ---- |  |  | - | -------- | -
|                 |  | Year Ended December 31, 2000
|                 |  | (in millions)               
|                 |  | New                          |          | NTL       |  |             |       |       |  |   |      | 
|                 |  | NTL                          |          | Australia |  | Rediffusion |       | Total
|                 |  |                              |          |           |  |             |       |      
|Revenues         |  | $                            | 2,484.2  |           |  | $           | 55.0  |       |  | $ | 74.7 |  |  | $ | 2,613.9  |  
|Operating (loss) |  |                              | (1,525.2 | )         |  |             | (19.5 | )     |  |   | 1.4  |  |  |   | (1,543.3 | )
|Net (loss)       |  |                              | (2,388.1 | )         |  |             | (20.9 | )     |  |   | 1.5  |  |  |   | (2,407.5 | )

5. Recent Accounting Pronouncements

On December 31, 2002, Old NTL adopted the disclosure provisions of SFAS No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure.
SFAS No. 148 amends SFAS No. 123, Accounting for Stock Based Compensation, to
provide alternative methods of transition to SFAS No. 123s fair value method
of accounting for stock-based employee compensation. SFAS No. 148 also amends
the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, Interim
Financial Reporting.

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

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
which is effective for the Company on January 1, 2003. The adoption of SFAS
No. 145 will require any gain or loss recognized on the extinguishment of debt
to be classified as income or loss from continuing operations. Prior to SFAS
No. 145, gain or loss recognized on the extinguishment of debt was classified
as an extraordinary item.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which was effective for the Company on January
1, 2002. This Statement supercedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
and other related accounting guidance. The adoption of this new standard had
no effect on the results of operations, financial condition or cash flows of
the Company, except that it required the Company to treat NTL Australia as a
discontinued operation beginning in the first quarter of 2002. The Company
also accounted for NTL Communications and Rediffusion as discontinued
operations in the third and fourth quarter of 2002, respectively.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which is effective for the Company on January 1, 2003. This
Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible fixed assets and the associated
asset retirement costs. The adoption of this new standard is not expected to
have a significant effect on the results of operations, financial condition or
cash flows of the Company.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

5. Recent Accounting Pronouncements (continued)

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination that is completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets. Instead,
these assets must be reviewed annually (or more frequently under certain
conditions) for impairment in accordance with this statement. This impairment
test uses a fair value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. Old NTL
adopted SFAS No. 141 and SFAS No. 142 on January 1, 2002. Primarily due to the
significant impairment charge that Old NTL recorded in 2001, the adoption of
this new standard did not result in an impairment upon adoption. Amortization
of goodwill and license acquisition costs ceased effective January 1, 2002.
See Note 8.

6. Asset Impairments

Asset impairment charges were $854.3 million in the year ended December 31,
2002 and almost exclusively apply to the Cablecom operations. These charges
are non-cash charges to write-down certain assets to their estimated fair
values based on an assessment that their carrying value was not recoverable.
These charges include fixed assets of $1.0 million, goodwill of $841.0 million
and other assets of $12.3 million. The charge with respect to fixed assets was
estimated based upon the technological obsolescence of certain network and
other equipment. The charge with respect to goodwill was determined in
accordance with SFAS No. 142.

As of December 31, 2001, Old NTL performed an analysis of the carrying values
of its long-lived assets including goodwill. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and record
valuations in the telecommunications industry. This analysis was initiated
because of the decline in Old NTLs stock price and significantly lower
valuations for companies within its industry. Additionally, at the time of Old
NTLs analysis, the book value of Old NTLs net assets significantly exceeded
its market capitalization. Accordingly, Old NTL performed an analysis of the
recoverability of its long-lived assets and associated goodwill. The fair
value of Old NTLs assets was determined by discounting Old NTLs estimates of
the expected future cash flows related to these investments when the
non-discounted cash flows indicated that the long-lived assets would not be
recoverable. Old NTL recorded a write-down of $9,511.3 million in the fourth
quarter of 2001 as a result of this analysis and review, of which $8,161.6
million is included in loss from discontinued operations, $912.1 million is
included in asset impairments and $437.6 million is included in share of losses
from equity investments. The asset impairment charge of $912.1 million
included goodwill of $762.7 million, investments in affiliates of $25.1 million
and other assets of $124.3 million.

7. Fixed Assets

Fixed assets consist of:

|                         |  |               |         |      |  |   |         |  
|------------------------ |  | ------------- | ------- | ---- |  | - | ------- | -
|                         |  | December 31, 
|                         |  |              
|                         |  | 2002          |         | 2001
|                         |  |               |         |     
|                         |  | (in millions)
|Operating equipment      |  | $             | 2,109.2 |      |  | $ | 1,691.4 |  
|Other equipment          |  |               | 109.5   |      |  |   | 64.7    |  
|Construction-in-progress |  |               | 25.1    |      |  |   | 2.8     |  
|                         |  |               |         |      |  |   |         |  
|                         |  |               | 2,243.8 |      |  |   | 1,758.9 |  
|Accumulated depreciation |  |               | (561.7  | )    |  |   | (264.0  | )
|                         |  |               |         |      |  |   |         |  
|                         |  | $             | 1,682.1 |      |  | $ | 1,494.9 |  
|                         |  |               |         |      |  |   |         |  

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

8. Cablecom Acquisition and Intangible Assets

On March 28, 2000, Old NTL acquired the cable assets of the Cablecom group 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 Old NTLs issuance of $1,850.0 million of preferred
stock to France Telecom and a group of commercial banks. This acquisition was
accounted for as a purchase and, accordingly, the net assets and results of
operations of Cablecom have been included in the consolidated financial
statements from the date of acquisition. The aggregate purchase price of
$3,528.6 million, which includes costs incurred of $18.4 million, exceeded the
fair value of net tangible assets acquired by $2,282.2 million, which was
allocated as follows: $195.9 million to customer lists, $73.1 million to
deferred taxes and $2,159.4 million to goodwill.

The change in the carrying amount of goodwill during the year ended December
31, 2002 is as follows (in millions):

|                                                  |  |   |        |  
|------------------------------------------------- |  | - | ------ | -
|Goodwill  December 31, 2001                      |  | $ | 960.0  |  
|Impairment charge                                 |  |   | (841.0 | )
|Foreign currency exchange translation adjustments |  |   | 99.7   |  
|                                                  |  |   |        |  
|Goodwill  December 31, 2002                      |  | $ | 218.7  |  
|                                                  |  |   |        |  

Upon the adoption of SFAS No. 142, Old NTL performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separate from goodwill. Old NTL
also determined that no changes in the remaining useful lives of the customer
lists were required.

Old NTL also performed an evaluation for impairment of its goodwill as of
January 1, 2002 and determined that no impairment charge was required.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2002, as adjusted for the Companys emergence from
Chapter 11 reorganization, the adoption of fresh-start reporting, and prior to
the deconsolidation of Cablecom, would be approximately $10 million for each of
the next five years.

The following table shows the Companys net loss as adjusted for the adoption
of SFAS No. 142, had SFAS No. 142 been in effect on January 1 of each period
(unaudited) (in millions):

|                                              |          |   |                         |   |      |   |          |       |  |   |        |       | 
|--------------------------------------------- | -------- | - | ----------------------- | - | ---- | - | -------- | ----- |  | - | ------ | ----- | 
|                                              |          |   | Year Ended December 31,
|                                              |          |   |                        
|                                              |          |   | 2002                    |   | 2001 |   | 2000    
|                                              |          |   |                         |   |      |   |         
|Loss from continuing operations  as reported |          | $ | (1,348.6                | ) |      | $ | (2,368.4 | )     |  | $ | (556.2 | )    
|Amortization of:                              |          |   |                         |   |      |   |          |       |  |   |        |      
|                                              | Goodwill |   |                         |  |      |   |          | 318.2 |  |   |        | 238.8 | 
|                                              | Other    |   |                         |  |      |   |          | 32.8  |  |   |        | 0.8   | 
|                                              |          |   |                         |   |      |   |          |       |  |   |        |      
|                                              |          |   |                        |   |      |   | 351.0    |       |  |   | 239.6  |      
|                                              |          |   |                         |   |      |   |          |       |  |   |        |      
|Loss from continuing operations  as adjusted |          | $ | (1,348.6                | ) |      | $ | (2,017.4 | )     |  | $ | (316.6 | )    
|                                              |          |   |                         |   |      |   |          |       |  |   |        |      

9. Investments in and Loans to Affiliates

The Company has investments in various companies and joint ventures which are
accounted for under either the equity method or the cost method. The Companys
equity investments include its 27% interest in Noos S.A., a French broadband
company, which offers analog and digital cable television, high speed Internet
and telephone services, its 50% interest in eKabel InvestCo, which owns 65% of
iesy Hessen GmbH (iesy), the largest cable television network in the German
province of Hessen, and its 34.01% interest in B2 (Bredband) AG (B2), a
company based in Sweden, which provides access to a broadband network that
provides transmission, both to and from the customer, at the same speed and at
the same time, but, as described more fully in this Form 10-K, NTL Delaware
entered into a settlement agreement on April 30, 2003, pursuant to which, among
other things, the Company agreed to sell all of its interest in B2 in the near
future.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

9. Investments in and Loans to Affiliates (continued)

During 2002, Old NTLs share of Noos losses, reduced the investment therein to
zero. On the Effective Date, the Company released its 27.1% interest (the
Noos Interest) in Suez Lyonnais Télécom (Noos) to France Telecom as part of
a compromise and settlement under the terms of the Plan. Pursuant to the terms
of the Plan, the Noos Interest was released to France Telecom in exchange for
(i) the cancellation of the shares of Variable Coupon Redeemable Preferred
Stock, Series A of Old NTL and shares of Fixed Coupon Redeemable Preferred
Stock, Series A of Old NTL, (ii) the waiver by France Telecom of its rights to
any distribution on account of its claims as a holder of Old NTL and NTL
Delaware 5 3/4% convertible subordinated notes, (iii) the release by France
Telecom of any contingent payments due to France Telecom pursuant to the 1G
Protocol and Convention Agreement, dated May 6, 1999 (the 1G Franchises) and
the transfer of the 1G Franchises by Old NTL to Noos, and (iv) a $25 million
payment by France Telecom to the Company on the Effective Date.

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

B2 (Bredband)AG

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

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

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

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

9. Investments in and Loans to Affiliates (continued)

Premium TV Limited

Premium TV, a wholly-owned subsidiary of NTL Delaware, is obliged to provide
funding of up to approximately £39 million ($62.8 million) to fund various of
its joint venture and other contractual interests. Of this amount, the payment
of approximately £26 million ($41.7 million) has been guaranteed by NTL
Delaware. If Premium TV fails to provide its committed funding under the
relevant shareholder arrangements relating to these joint ventures, Premium TV
and, in respect of the guaranteed amounts, NTL Delaware, may be sued for
non-payment. As a result of the recapitalization process, the relevant joint
venture partners may assert that they can compulsorily acquire Premium TVs
interest in the relevant joint venture at a third party appraisal valuation.
Premium TV is currently in discussions with certain of these joint venture
partners with a view to restructuring the relevant joint ventures. In the event
that these discussions do not reach a resolution acceptable to Premium TV,
Premium TV may seek to discontinue these joint ventures and terminate their
activities. The Company believes, however, that it has various defenses and
protections under the Bankruptcy Code against such actions and intends to
enforce vigorously its rights and protections.

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

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

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

Two Way TV Limited

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

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

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

9. Investments in and Loans to Affiliates (continued)

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

|                         |  |                   |       |                   |  |           |      |         |  |  |       |   |  |   |       | 
|------------------------ |  | ----------------- | ----- | ----------------- |  | --------- | ---- | ------- |  |  | ----- | - |  | - | ----- | 
|                         |  | December 31, 2002 |       | December 31, 2001
|                         |  |                   |       |                  
|                         |  | Ownership         |       | Balance           |  | Ownership |      | Balance
|                         |  |                   |       |                   |  |           |      |        
|                         |  | (in millions)    
|Noos                     |  |                   | 27.00 | %                 |  | $         |     |         |  |  | 27.00 | % |  | $ | 47.0  | 
|B2                       |  |                   | 34.01 | %                 |  |           |     |         |  |  | 34.01 | % |  |   | 92.5  | 
|iesy                     |  |                   | 32.50 | %                 |  |           |     |         |  |  | 32.50 | % |  |   | 73.0  | 
|Others                   |  |                   |       |                   |  |           | 4.7  |         |  |  |       |   |  |   | 48.3  | 
|                         |  |                   |       |                   |  |           |      |         |  |  |       |   |  |   |       | 
|Total equity investments |  |                   |       |                   |  |           | 4.7  |         |  |  |       |   |  |   | 260.8 | 
|Total cost investments   |  |                   |       |                   |  |           | 8.3  |         |  |  |       |   |  |   | 7.0   | 
|                         |  |                   |       |                   |  |           |      |         |  |  |       |   |  |   |       | 
|Total                    |  |                   |       |                   |  | $         | 13.0 |         |  |  |       |   |  | $ | 267.8 | 
|                         |  |                   |       |                   |  |           |      |         |  |  |       |   |  |   |       | 

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

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

|                                           |  |               |         |              |  |   |         | 
|------------------------------------------ |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                           |  | December 31,  |         | December 31,
|                                           |  | 2002          |         | 2001        
|                                           |  |               |         |             
|                                           |  | (in millions)
|Current assets                             |  | $             | 367.6   |              |  | $ | 454.4   | 
|Fixed assets, net                          |  |               | 1,137.8 |              |  |   | 908.1   | 
|Other assets                               |  |               | 1,171.0 |              |  |   | 2,688.5 | 
|                                           |  |               |         |              |  |   |         | 
|Total assets                               |  | $             | 2,676.4 |              |  | $ | 4,051.0 | 
|                                           |  |               |         |              |  |   |         | 
|Current liabilities                        |  | $             | 467.7   |              |  | $ | 309.1   | 
|Non current liabilities                    |  |               | 1,753.0 |              |  |   | 1,403.6 | 
|Total shareholders equity                 |  |               | 455.7   |              |  |   | 2,338.3 | 
|                                           |  |               |         |              |  |   |         | 
|Total liabilities and shareholders equity |  | $             | 2,676.4 |              |  | $ | 4,051.0 | 
|                                           |  |               |         |              |  |   |         | 

|                 |  |                        |          |      |  |               |        |   |  |   |        |  
|---------------- |  | ---------------------- | -------- | ---- |  | ------------- | ------ | - |  | - | ------ | -
|                 |  | Year Ended December 31
|                 |  |                       
|                 |  | 2002                   |          | 2001 |  | 2000         
|                 |  |                        |          |      |  |              
|                 |  |                        |          |      |  | (in millions) |        |   |  |  
|Revenues         |  | $                      | 339.2    |      |  | $             | 326.6  |   |  | $ | 115.3  |  
|Operating (loss) |  |                        | (1,773.8 | )    |  |               | (417.0 | ) |  |   | (225.1 | )
|Net (loss)       |  |                        | (1,802.5 | )    |  |               | (564.0 | ) |  |   | (296.6 | )

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

10. Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

|                            |                   |                                                    |                                       |       |         |               |         | 
|--------------------------- | ----------------- | -------------------------------------------------- | ------------------------------------- | ----- | ------- | ------------- | ------- | 
|                            |                   |                                                    |                                       |       |         | December 31, 
|                            |                   |                                                    |                                       |       |         | 2002         
|                            |                   |                                                    |                                       |       |         | (in millions)
|Accounts payable            |                   | $                                                  | 0.3                                   |      
|Interest payable            |                   |                                                    | 30.4                                  |      
|Dividends payable           |                   |                                                    | 109.9                                 |      
|Accrued expenses            |                   |                                                    | 0.2                                   |      
|Redeemable preferred stock: |                   |                                                    |                                       |      
|                            |                   | Cumulative Convertible Preferred Stock             |                                       |       | 2,077.3 |              
|                            |                   | Variable Coupon Redeemable Preferred Stock         |                                       |       | 484.2   |              
|                            |                   | 6.5% Redeemable Preferred Stock                    |                                       |       | 98.4    |              
|                            |                   | 13% Senior Redeemable Exchangeable Preferred Stock |                                       |       | 193.4   |              
|Long term debt:             |                   |                                                    |                                       |      
|                            | NTL Europe, Inc.: |                                                    |                                       |       |        
|                            |                   |                                                    | 5 3/4% Convertible Subordinated Notes |       |         | 100.0         |        
|                            | NTL Delaware:     |                                                    |                                       |       |        
|                            |                   |                                                    | 5 3/4% Convertible Subordinated Notes |       |         | 1,200.0       |        
|                            |                   |                                                    |                                       |      
|                            |                   |                                                    |                                       | Total |         | $             | 4,294.1 | 
|                            |                   |                                                    |                                       |      

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

11. Long-Term Debt

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

|                     |                                       |   |               |         |              |   |         |         | 
|-------------------- | ------------------------------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                     |                                       |   | December 31,  |         | December 31,
|                     |                                       |   | 2002          |         | 2001        
|                     |                                       |   |               |         |             
|                     |                                       |   | (in millions)
|NTL Europe, Inc.:    |                                       |   |               |         |              |   |         |        
|                     | 5 3/4% Convertible Subordinated Notes |   | $             |        |              |   | $       | 100.0   | 
|NTL Delaware:        |                                       |   |               |         |              |   |         |        
|                     | 5 3/4% Convertible Subordinated Notes |   |               |        |              |   |         | 1,200.0 | 
|Cablecom:            |                                       |   |               |         |              |   |         |        
|                     | Term Loan Facility                    |   |               | 1,951.8 |              |   |         | 1,626.8 | 
|                     | Revolving Facility                    |   |               | 762.7   |              |   |         | 527.2   | 
|                     | Other                                 |   |               | 4.8     |              |   |         | 6.2     | 
|                     |                                       |   |               |         |              |   |         |         | 
|                     |                                       |   | 2,719.3       |         |              |   | 3,460.2 |        
|Less current portion |                                       |   | 2,719.3       |         |              |   | 3,460.2 |        
|                     |                                       |   |               |         |              |   |         |         | 
|                     |                                       | $ |              |         |              | $ |        |        
|                     |                                       |   |               |         |              |   |         |         | 

Old NTL had $100.0 million principal amount 5 3/4% Convertible Subordinated
Notes due June 22, 2011 which were canceled on the Effective Date pursuant to
the Plan. Interest of 5 3/4% per annum was payable quarterly from October 15,
2001. The notes were convertible into shares of Old NTLs common stock at a
conversion price of $35.00 per share.

NTL Delaware had $1,200.0 million 5 3/4% Convertible Subordinated Notes due
December 15, 2009 which were canceled on the Effective Date pursuant to the
Plan. Interest of 5 3/4% per annum was payable semiannually from June 15, 2000.
The notes were convertible into shares of Old NTLs common stock at a
conversion price of $108.18 per share.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Long-Term Debt (continued)

In March 2000, Cablecom borrowed CHF 2,700.0 million ($1,951.8 million and
$1,626.8 million at December 31, 2002 and 2001, respectively) under its term
loan facility in connection with the acquisition of the Cablecom business.
Interest is payable at least every six months at Swiss LIBOR plus a margin rate
of 2.5% per annum, which is subject to adjustment. The effective interest rate
was 3.51% and 5.27% at December 31, 2002 and 2001, respectively. Although the
term loan facility was originally scheduled to mature on April 30, 2003, upon
the request of Cablecom, the maturity date has been extended to the business
day following May 31, 2003, with an additional automatic extension to June 30,
2003 under certain circumstances.

Cablecom had the option to draw on a revolving facility of up to an additional
CHF 1,400 million. The amount available had been capped at CHF 1,055 million
although the availability may be increased with the consent of the requisite
majority of the lenders. At December 31, 2002 and 2001, Cablecom had borrowed
CHF 1,055.0 million ($762.7 million) and CHF 875.0 million ($527.2 million),
respectively, and Cablecom has subsequently borrowed an additional CHF 37
million for accrued interest payments. Interest is payable at least every six
months at Swiss LIBOR plus a margin rate of 2.5% per annum, which is subject to
adjustment. The effective rate of interest was 3.71% and 5.49% at December 31,
2002 and 2001, respectively. The unused portion of the commitment is subject
to a commitment fee of 0.75% payable quarterly, which is reduced to 0.50% when
over 50% of the commitment is utilized. Although the revolving facility was
originally scheduled to mature on April 30, 2003, upon the request of Cablecom,
the maturity date has been extended to the business day following May 31, 2003,
with an additional automatic extension to June 30, 2003 under certain
circumstances.

As described in more detail in Note 22 (Commitments and Contingent Liabilities
 Cablecom), Cablecom does not have sufficient resources to satisfy these bank
obligations. In addition, Cablecom and two of its subsidiaries are
overindebted under Swiss law and, accordingly, may be required to file for
insolvency proceedings in Switzerland. Cablecom and its lenders have been
involved in ongoing discussions regarding a complete financial restructuring of
Cablecom which will, among other things, reduce the amount of bank debt
outstanding, extend the maturity date thereof and resolve the Swiss
overindebtedness issue. In the event that such negotiations are unsuccessful,
the Company expects to be deprived of all of its ownership interest in Cablecom
in the near future. Further, even if such negotiations are successful, the
Company expects to be left with no more than a small minority interest in
Cablecom. Accordingly, the Company anticipates that, in the near future, the
results of Cablecom will no longer be reported as part of the Companys
consolidated results of operations. In that regard, it should also be noted
that, in accordance with the terms of the existing Cablecom credit agreement,
no dividends, distributions or other payments have ever been or will be made by
Cablecom to the Company.

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

Long-term debt repayments are due as follows (in millions). The table reflects
the Companys contractual obligations as of December 31, 2002 as adjusted for
the emergence from Chapter 11 reorganization.

|                         |  |   |         | 
|------------------------ |  | - | ------- | 
|Year ending December 31: |  |   |         | 
|2003                     |  | $ | 2,714.7 | 
|2004                     |  |   | 0.9     | 
|2005                     |  |   | 0.1     | 
|2006                     |  |   | 0.1     | 
|2007                     |  |   | 0.1     | 
|Thereafter               |  |   | 3.4     | 
|                         |  |   |         | 
|Total debt repayments    |  |   | 2,719.3 | 
|Less: current portion    |  |   | 2,719.3 | 
|                         |  |   |         | 
|                         |  | $ |        | 
|                         |  |   |         | 

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

12. Derivative Financial Instruments

Effective January 1, 2001, Old NTL 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 loss, depending on whether a derivative is designated as a fair
value or cash flow hedge. The ineffective portion of all hedges is recognized
in the results of operations. Beginning in October 1, 2001, Old NTL has
recorded the change in the fair value of derivatives related to changes in time
value each period in other comprehensive loss for certain qualifying cash flow
hedges.

On January 1, 2001, Old NTL and its subsidiaries recorded all of their
outstanding derivative instruments at their fair value. The outstanding
derivative instruments were comprised of a number of zero cost collars to hedge
exposure to floating interest rates on certain of its debt. The aggregate fair
value on January 1, 2001 was a liability of $2.2 million, which was recorded as
other comprehensive loss.

At December 31, 2002, Cablecom had zero cost collars, with a notional amount of
CHF 1,200.0 million, to hedge exposure to the floating interest rate
indebtedness incurred under the Cablecom term loan facility and revolving loan
facility.

13. Redeemable Preferred Stock

All of Old NTLs redeemable preferred stock (which is described below) was
canceled on the Effective Date pursuant to the Plan:

On September 12, 2001, Old NTL issued 1,850,000 shares of its Cumulative
Convertible Preferred Stock, Series A (Convertible Preferred Stock) in
exchange for the 1,850,000 issued and outstanding shares of its 5% Cumulative
Preferred Stock held by France Telecom and others. The Convertible Preferred
Stock had a stated value and liquidation preference of $1,075.17 per share and
was mandatorily redeemable for cash by Old NTL on March 27, 2009. Dividends
were payable quarterly in additional shares of Convertible Preferred Stock, at
the following quarterly dividend rates: (i) from September 12, 2001 through
March 26, 2002, $13.44 per share, (ii) from March 27, 2002 through March 26,
2003, $21.23 per share and (iii) from March 27, 2003 through March 26, 2004,
$26.61 per share. In March 2002, Old NTL elected to delay the conversion of
the Convertible Preferred Stock until at least March 27, 2003. Holders of
Convertible Preferred Stock other than any commercial bank or their affiliates
had the option to elect, subject to some conditions, to exchange their
Convertible Preferred Stock for up to a 50% interest in an entity holding Old
NTLs Swiss operations.

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

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

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

13. Redeemable Preferred Stock (continued)

In February 1997, Old NTL issued 100,000 shares of its 13% Senior Redeemable
Exchangeable Preferred Stock (the Redeemable Preferred Stock). Old NTL
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 accrued at 13% per annum ($130 per share) and were payable
quarterly in arrears. Dividends accruing on or prior to February 15, 2004 may,
at the option of Old NTL, be paid in cash, by the issuance of additional
Redeemable Preferred Stock or in any combination of the foregoing. As of
December 31, 2002, Old NTL had accrued $95.4 million for dividends and had
issued approximately 84,000 shares for $83.8 million of such accrued dividends.
The Redeemable Preferred Stock was redeemable, at Old NTL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 declined annually
to 100% in 2005, in each case together with accrued and unpaid dividends to the
redemption date. The Redeemable Preferred Stock was subject to mandatory
redemption on February 15, 2009.

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

|                                                          |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|--------------------------------------------------------- |  | --- | ------- | -- |  | -------- | ---------- | ---- |  | ----------- | ------ |  |  | - | ------ |  |  | - | --------- | 
|                                                          |  | 13% |         | 5% |  | Variable |            | 6.5% |  | Convertible
|                                                          |  |     |         |    |  |          |            |      |  |            
|Shares at December 31, 1999                               |  |     | 142,000 |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for cash                                           |  |     |        |    |  |          | 1,850,000  |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for dividends                                      |  |     | 20,000  |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|                                                          |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Shares at December 31, 2000                               |  |     | 162,000 |    |  |          | 1,850,000  |      |  |             |       |  |  |   |       |  |  |   |          | 
|Issued for investment in Noos                             |  |     |        |    |  |          |           |      |  |             | 47,000 |  |  |   | 12,000 |  |  |   |          | 
|Issued for dividends                                      |  |     | 22,000  |    |  |          |           |      |  |             | 1,000  |  |  |   |       |  |  |   |          | 
|Exchange                                                  |  |     |        |    |  |          | (1,850,000 | )    |  |             |       |  |  |   |       |  |  |   | 1,850,000 | 
|                                                          |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Shares at December 31, 2001                               |  |     | 184,000 |    |  |          |           |      |  |             | 48,000 |  |  |   | 12,000 |  |  |   | 1,850,000 | 
|Issued for dividends                                      |  |     |        |    |  |          |           |      |  |             |       |  |  |   |       |  |  |   |          | 
|                                                          |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Shares at December 31, 2002                               |  |     | 184,000 |    |  |          |           |      |  |             | 48,000 |  |  |   | 12,000 |  |  |   | 1,850,000 | 
|                                                          |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 
|Liquidation preference at
December 31, 2002
(in millions) |  | $   | 212.3   |    |  | $        |           |      |  | $           | 502.6  |  |  | $ | 135.4  |  |  | $ | 2,174.4   | 
|                                                          |  |     |         |    |  |          |            |      |  |             |        |  |  |   |        |  |  |   |           | 

14. Non-Cash Compensation

In July 2001, the Compensation and Option Committee of Old NTLs Board of
Directors approved modifications to certain stock options. The latest possible
expiration date of options to purchase an aggregate of approximately 4.7
million shares of Old NTLs common stock with exercise prices from $0.17 to
$14.76 per share was extended from July 30, 2001 to October 2004, as
applicable, to January 30, 2006. Old NTL recognized non-cash compensation
expense of $30.6 million based on the excess of the quoted market price of Old
NTLs common stock on the date of the modification of $12.05 per share over the
exercise price per share. All options to purchase shares of Old NTLs common
stock were canceled on the Effective Date pursuant to the Plan.

15. Other Charges Including Restructuring Charges

Other charges of $3.5 million in 2002 are for the integration of acquired
companies, mostly related to information technology integration, as well as
costs incurred for business rationalization consulting. Other charges of $12.2
million in 2001 include restructuring charges of $6.8 million and costs of $5.4
million incurred primarily to integrate the acquired companies, mostly related
to information technology integration, as well as costs incurred for business
rationalization consulting.

Restructuring charges of $6.8 million for the year ended December 31, 2001
relates to Old NTLs actions to reorganize, re-size and reduce operating costs
and create greater efficiency in various areas. These costs were for
approximately 225 employees to be terminated, none of whom are still employed
by the Company as of December 31, 2002.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

15. Other Charges Including Restructuring Charges (continued)

The following table summarizes the restructuring charges incurred and utilized
in 2001 and 2002:

|                           |  |                   |      |  
|-------------------------- |  | ----------------- | ---- | -
|                           |  | Employee         
|                           |  | Severance        
|                           |  | and Related Costs
|                           |  |                  
|Charged to expense         |  | $                 | 6.8  |  
|Utilized                   |  |                   |     |  
|                           |  |                   |      |  
|Balance, December 31, 2001 |  |                   | 6.8  |  
|Utilized                   |  |                   | (4.6 | )
|                           |  |                   |      |  
|Balance, December 31, 2002 |  | $                 | 2.2  |  
|                           |  |                   |      |  

16. Income Taxes

Significant components of the provision/(benefit) for income taxes attributable
to continuing operations consists of the following:

|               |                 |   |                         |        |      |   |               |       |   |   |       |       |  
|-------------- | --------------- | - | ----------------------- | ------ | ---- | - | ------------- | ----- | - | - | ----- | ----- | -
|               |                 |   | Year Ended December 31,
|               |                 |   |                        
|               |                 |   | 2002                    |        | 2001 |   | 2000         
|               |                 |   |                         |        |      |   |              
|               |                 |   |                         |        |      |   | (in millions) |       |   |   |      
|Current:       |                 |   |                         |        |      |   |               |       |   |   |       |      
|               | Federal         |   | $                       | (4.6   | )    |   | $             |      |   |   | $     |      |  
|               | State and local |   |                         | 1.3    |      |   |               |      |   |   |       | 0.2   |  
|               | Foreign         |   |                         | 3.4    |      |   |               | 0.3   |   |   |       |      |  
|               |                 |   |                         |        |      |   |               |       |   |   |       |       |  
|Total current  |                 |   | 0.1                     |        |      |   | 0.3           |       |   |   | 0.2   |      
|               |                 |   |                         |        |      |   |               |       |   |   |       |       |  
|Deferred:      |                 |   |                         |        |      |   |               |       |   |   |       |      
|               | Foreign         |   |                         | (128.2 | )    |   |               | (51.2 | ) |   |       | (23.1 | )
|               |                 |   |                         |        |      |   |               |       |   |   |       |       |  
|Total deferred |                 |   | (128.2                  | )      |      |   | (51.2         | )     |   |   | (23.1 | )    
|               |                 |   |                         |        |      |   |               |       |   |   |       |       |  
|               |                 | $ | (128.1                  | )      |      | $ | (50.9         | )     |   | $ | (22.9 | )    
|               |                 |   |                         |        |      |   |               |       |   |   |       |       |  

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

16. Income Taxes (continued)

The Companys deferred tax benefit relates primarily to operating loss
carryforwards for which benefit was recognized to the extent of deferred tax
liabilities. In addition, during the year ended December 31, 2002, Old NTL
merged certain Swiss subsidiaries and identified additional tax losses within
the merged entity, which allowed Old NTL to recognize a deferred tax benefit
for tax losses to the extent that the tax losses offset existing deferred tax
liabilities of the newly merged entity. The federal current benefit relates to
utilization of operating losses to offset income from discontinued operations
related to the sale of NTL Australia.

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

|                                            |                      |   |               |       |      |   |        |       | 
|------------------------------------------- | -------------------- | - | ------------- | ----- | ---- | - | ------ | ----- | 
|                                            |                      |   | December 31, 
|                                            |                      |   |              
|                                            |                      |   | 2002          |       | 2001
|                                            |                      |   |               |       |     
|                                            |                      |   | (in millions)
|Deferred tax liabilities:                   |                      |   |               |       |      |   |        |      
|                                            | Intangibles          |   | $             | 15.9  |      |   | $      | 23.0  | 
|                                            | Fixed assets         |   |               | 135.5 |      |   |        | 139.4 | 
|                                            | Accounts receivable  |   |               | 74.3  |      |   |        |      | 
|                                            | Other                |   |               | 0.3   |      |   |        | 2.2   | 
|                                            |                      |   |               |       |      |   |        |      
|Total deferred tax liabilities              |                      |   | 226.0         |       |      |   | 164.6  |      
|Deferred tax assets:                        |                      |   |               |       |      |   |        |      
|                                            | Net operating losses |   |               | 788.1 |      |   |        | 208.4 | 
|                                            | Investment and other |   |               | 103.9 |      |   |        | 59.7  | 
|                                            |                      |   |               |       |      |   |        |      
|Total deferred tax assets                   |                      |   | 892.0         |       |      |   | 268.1  |      
|Valuation allowance for deferred tax assets |                      |   | (696.7        | )     |      |   | (247.7 | )    
|                                            |                      |   |               |       |      |   |        |      
|Net deferred tax assets                     |                      |   | 195.3         |       |      |   | 20.4   |      
|                                            |                      |   |               |       |      |   |        |      
|Net deferred tax (assets) liabilities       |                      | $ | 30.7          |       |      | $ | 144.2  |      
|                                            |                      |   |               |       |      |   |        |      

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

As discussed in Note 1, the Company emerged from Chapter 11 bankruptcy on
January 10, 2003. A restructuring of the Companys debt will give rise to
cancellation of indebtedness income (COD) in 2003, which will be non-taxable
since the debt cancellation is in connection with a bankruptcy reorganization.
However, to the extent that such amount is excluded from U.S. taxable income,
certain tax attributes are subject to reduction, including certain U.S. net
operating loss carryforwards and U.S. capital loss carryforwards. The
reduction of tax attributes should have no material impact on the Companys
financial statement position since the deferred tax assets related to these tax
attributes are offset by a corresponding valuation allowance. Furthermore, the
reorganization will cause an ownership change pursuant to Internal Revenue Code
Section 382. Section 382 will severely limit the Companys ability to utilize
any remaining U.S. net operating loss carryforwards and may limit the Companys
ability to deduct any built-in losses recognized within the subsequent
five-year period.

In 2002, the Internal Revenue Service completed its federal income tax audit of
Old NTL for the years 1996, 1997 and 1998. The audit resulted in a reduction
in U.S. net operating loss carryforwards that had no material impact on the
Company.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

16. Income Taxes (continued)

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

|                                                             |                                                    |   |                         |       |      |   |        |       |  |   |        |       |  
|------------------------------------------------------------ | -------------------------------------------------- | - | ----------------------- | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- | -
|                                                             |                                                    |   | Year Ended December 31,
|                                                             |                                                    |   |                        
|                                                             |                                                    |   | 2002                    |       | 2001 |   | 2000  
|                                                             |                                                    |   |                         |       |      |   |       
|                                                             |                                                    |   | (in millions)          
|Expected tax expense/benefit at federal statutory rate (35%) |                                                    | $ | (522.6                  | )     |      | $ | (846.8 | )     |  | $ | (202.7 | )    
|Increase/(decrease) resulting from:                          |                                                    |   |                         |       |      |   |        |       |  |   |        |      
|                                                             | Non-deductible asset impairments                   |   |                         | 299.0 |      |   |        | 472.4 |  |   |        |      |  
|                                                             | Foreign losses with no benefit                     |   |                         | (3.3  | )    |   |        | 316.5 |  |   |        | 245.7 |  
|                                                             | U.S. losses with no benefits                       |   |                         | 94.5  |      |   |        | 7.0   |  |   |        | (66.0 | )
|                                                             | State and local income tax, net of federal benefit |   |                         | 1.3   |      |   |        |      |  |   |        | .1    |  
|                                                             | Other                                              |   |                         | 3.0   |      |   |        |      |  |   |        |      |  
|                                                             |                                                    |   |                         |       |      |   |        |       |  |   |        |      
|                                                             |                                                    | $ | (128.1                  | )     |      | $ | (50.9  | )     |  | $ | (22.9  | )    
|                                                             |                                                    |   |                         |       |      |   |        |       |  |   |        |      

17. Fair Values of Financial Instruments

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

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

Marketable securities:The carrying amounts reported in the consolidated
balance sheets approximate fair value.

Redeemable Preferred Stock:At December 31, 2001, the fair value of the
now-canceled 13% redeemable preferred stock was based upon the quoted market
value. At December 31, 2001, the fair value of the other two series of
now-canceled redeemable preferred stock was estimated by reference to the fair
value of the 13% redeemable preferred stock. At December 31, 2002, due to the
Companys bankruptcy, it was not possible to determine the fair values of the
redeemable preferred stock by quoted market prices due to the lack of activity
for these securities. Therefore, the fair values reflected in the table below
represent the de minimis distribution value (including, for example, cash and
new securities) which the holders of such securities received, upon the
Companys emergence from bankruptcy on January 10, 2003.

Long-term debt:The December 31, 2001 carrying amounts of the Old NTL
bank credit facilities approximate their fair values. The fair values
presented for the credit facilities at December 31, 2002, represent the values
calculated in accordance with the application of fresh-start accounting, used
in connection with the Companys emergence from bankruptcy. The fair values
of Old NTLs other now-canceled debt at December 31, 2001 were based on their
quoted market prices. At December 31, 2002, the fair value of the Convertible
Notes, represents the approximate distribution value, which the holders of
such debt received upon the Companys emergence from bankruptcy on January 10,
2003.

The carrying amounts and fair values of Old NTLs financial instruments are as
follows:

|                            |                                 |   |                   |         |                   |   |               |         |       |   |       |         |  |   |       |         | 
|--------------------------- | ------------------------------- | - | ----------------- | ------- | ----------------- | - | ------------- | ------- | ----- | - | ----- | ------- |  | - | ----- | ------- | 
|                            |                                 |   | December 31, 2002 |         | December 31, 2001
|                            |                                 |   |                   |         |                  
|                            |                                 |   | Carrying          |         | Fair              |   | Carrying      |         | Fair 
|                            |                                 |   | Amount            |         | Value             |   | Amount        |         | Value
|                            |                                 |   |                   |         |                   |   |               |         |      
|                            |                                 |   |                   |         |                   |   | (in millions) |         |       |   |      
|Cash and cash equivalents   |                                 | $ | 277.5             |         |                   | $ | 277.5         |         |       | $ | 228.3 |         |  | $ | 228.3 |        
|Marketable securities       |                                 |   | 17.3              |         |                   |   | 17.3          |         |       |   |      |         |  |   |      |        
|Long-term debt:             |                                 |   |                   |         |                   |   |               |         |       |   |       |         |  |   |       |        
|                            | 5 3/4% Convertible Notes        |   |                   | 1,200.0 |                   |   |               | 250.8   |       |   |       | 1,200.0 |  |   |       | 132.0   | 
|                            | 5 3/4% Convertible Notes        |   |                   | 100.0   |                   |   |               | 26.1    |       |   |       | 100.0   |  |   |       | 29.0    | 
|                            | Term loan facility              |   |                   | 1,951.8 |                   |   |               | 1,031.4 |       |   |       | 1,626.8 |  |   |       | 1,626.8 | 
|                            | Revolving facility              |   |                   | 762.7   |                   |   |               | 403.0   |       |   |       | 527.2   |  |   |       | 527.2   | 
|Redeemable Preferred Stock: |                                 |   |                   |         |                   |   |               |         |       |   |       |         |  |   |       |        
|                            | 13% Redeemable Preferred Stock  |   |                   | 193.4   |                   |   |               |        |       |   |       | 184.6   |  |   |       | 3.7     | 
|                            | Variable Coupon Preferred Stock |   |                   | 502.5   |                   |   |               |        |       |   |       | 477.9   |  |   |       | 7.2     | 
|                            | 6.5% Preferred Stock            |   |                   | 98.4    |                   |   |               |        |       |   |       | 89.5    |  |   |       | 1.3     | 
|                            | 5% Convertible Preferred Stock  |   |                   | 2,077.3 |                   |   |               |        |       |   |       | 2,029.1 |  |   |       | 30.5    | 

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

18. Related Party Transactions

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

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

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

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

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

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

Certain former officers and directors of Old NTL were also officers and
directors of ATX Communications, Inc. (ATX) (formerly known as CoreComm
Holdco, Inc.). On April 12, 2001, Old NTL purchased $15.0 million of an
unsecured convertible note from ATX and received warrants to purchase 770,000
shares of ATX common stock at an exercise price of $0.01 per share that expire
in April 2011. In addition, concurrently with the note purchase and without
additional compensation, Old NTL entered into a network and software agreement
with ATX, which agreement is now with New NTL. Under the agreement, ATX will provide U.S. network for Internet
traffic from New NTLs UK customers for three years, as well as a royalty free
license to use certain billing and provisioning software and know-how.
Interest on the notes is at 10.75% per annum, payable semiannually beginning on
October 15, 2001. The interest is payable in kind by the issuance of
additional notes in such principal amount equal to the interest payment that is
then due. The notes are convertible into ATX common stock prior to maturity at
a conversion price of $1.00 per share, subject to adjustment. Additional notes
issued for interest will have an initial conversion price equal to 120% of the
weighted average closing price of ATX common stock for a specified period. Old
NTL and ATX agreed to certain modifications to the conversion feature in
connection with ATXs recapitalization in December 2001.

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

F-34



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

18. Related Party Transactions (continued)

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

19. Shareholders Equity

The following description of the Companys Capital Structure is that of NTL
Europe, Inc. on a post reorganization basis.

Description of Capital Stock

The authorized capital stock of the Company consists of 60,000,000 shares of
Common Stock and 20,000,000 shares of Preferred Stock.

Description of Common Stock

The holders of the Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the Companys stockholders and do
not have cumulative voting rights in the election of directors. The holders of
the Companys Common Stock are not entitled to vote on any amendment to the
Companys charter that relates solely to the terms of one or more outstanding
series of the Companys preferred stock if the holders of the affected series
of preferred stock are entitled, either separately or together with the holders
of one or more other series of preferred stock, to vote thereon under the
Companys charter or under the Delaware General Corporation Law (the DGCL).

Generally, a majority of the votes cast at a meeting of stockholders by holders
of shares entitled to vote on the proposal is required for stockholder action.
However, the Companys charter provides that the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the Companys
capital stock which by its terms may be voted on all matters submitted to
stockholders of the Company generally, voting together as a single class, is
required for stockholder action relating to (a) amendments to the by-laws and
(b) the amendment or repeal of the provisions of the Companys charter relating
to (i) the classification of directors, (ii) the removal of directors, (iii)
the prohibition on action by written consent of stockholders, (iv) special
meetings of stockholders, (v) certain liabilities of directors, (vi) amendments
to the by-laws, (vii) indemnification of directors and officers, (viii) the
applicability of Section 203 of the DGCL to the Company and (ix) Article XIII
of the Companys charter which imposes these voting requirements. These voting
requirements, as well as the classification of directors on the Companys board
of directors, the super-majority voting requirements applicable in the event of
certain extraordinary corporate transactions and certain other provisions of
the Companys charter, as more fully described in the section herein relating
to Special Charter Provisions may have the effect, alone or in combination
with each other, of delaying, deferring or preventing a change in control of
the Company.

Subject to all rights and preferences of holders of any outstanding shares of
the preferred stock, holders of Common Stock are entitled to receive
proportionately such dividends as may from time to time be declared by the
board of directors out of funds legally available for the payment of dividends.

In the event of the Companys liquidation, dissolution or winding up, holders
of Common Stock would be entitled to share proportionately in all of the
Companys assets available for distribution to holders of Common Stock
remaining after payment of liabilities and liquidation preference of any
outstanding preferred stock. Holders of Common Stock have no preemptive rights
and have no rights to convert their Common Stock into any other securities, and
there are no redemption or sinking-fund provisions contained in the Companys
charter with respect to the Common Stock. There is no liability for further
calls or for assessments by the Company.

The rights, preferences and privileges of holders of Common Stock may be
adversely affected by the rights of the holders of shares of the Preferred
Stock and any other series of preferred stock that may be issued in the future.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

Description of Preferred Stock

The board of directors of the Company has the authority to issue preferred
stock in one or more series and to fix as to any series of preferred stock the
designation, title, voting powers and any other preferences, and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions, without any further vote or action by stockholders of the
Company.

The ability of the board of directors to issue one or more series of preferred
stock provides increased flexibility in structuring possible future financings
and acquisitions and in meeting other corporate needs which might arise. The
authorized shares of the Preferred Stock, as well as shares of the Common
Stock, are available for issuance without further action by stockholders,
unless any action is required by applicable law or the rules of any exchange,
automated quotation system or regulated quotation system on which the Companys
securities may be listed or quoted, as the case may be, or applicable rules of
any self-regulatory organization. The board of directors of the Company will
make any determination to issue the shares based on its judgment as to its best
interests and the best interests of its stockholders. The board of directors
of the Company, in so acting, could issue preferred stock having terms that
could discourage an acquisition attempt or other transaction that some or a
majority of the stockholders might believe to be in their best interests or in
which stockholders might receive a premium for their shares over the then
current market price of the Common Stock.

Description of the 10% Fixed Coupon Redeemable Preferred Stock

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

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



| |  |  | senior to all classes of the Companys Common Stock, the
Companys Series A Junior Participating Preferred Stock and to each
other class of capital stock or series of preferred stock that are
designated to rank junior to the Preferred Stock;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | junior to all classes of preferred stock that are designated to rank senior to the Preferred Stock; and                                                                                                                                          
|
| |  |  | equal to all classes of preferred stock that are designated to rank equally with the Preferred Stock.                                                                                                                                            

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

Dividends on the Preferred Stock are payable to holders of record as they
appear on the Companys stock register on the applicable record dates fixed by
the board of directors, which record dates will be the fifteenth (15th) day
preceding the payment dates thereof. Dividends payable on the Preferred Stock
for any period less than a full dividend period will accrue daily and be
computed on the basis of a 360-day year of twelve (12) thirty (30) day months
and the actual number of days elapsed in the period for which such dividends
are payable. No interest, or sum of money in lieu of interest, will be payable
in respect of any dividend payment or payments which may be in arrears.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

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

No dividends or distributions (other than (i) Stockholder Rights issued
pursuant to the Companys Stockholder Rights Agreement and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, junior securities) may be declared, made, paid or
set apart for payment upon any stock ranking junior to the Preferred Stock, nor
may any stock ranking junior to the Preferred Stock be redeemed, purchased or
otherwise acquired (other than a redemption, purchase, or other acquisition of
(A) shares of Common Stock made for purposes of an employee incentive or
benefit plan of the Company or any subsidiary of the Company or (B) securities
ranking junior to the Preferred Stock paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, junior securities) for any
consideration (or any monies paid to or made available for a sinking fund for
the redemption of any junior securities) by us, except by conversion into or
exchange for the Companys stock ranking junior to the Preferred Stock.

The Companys ability to declare and pay dividends may be affected by the fact
that the Company is a holding company with no independent operations or
significant assets other than the Companys investments in and advances to the
Companys subsidiaries and affiliated joint ventures. The Company depends upon
the receipt of sufficient funds from the Companys subsidiaries and affiliated
joint ventures to meet the Companys obligations. The Companys ability to
declare and pay dividends may be limited by applicable law and the terms of the
documents governing any of the Companys future borrowings and other
indebtedness, or the future borrowings and other indebtedness of any of the
Companys subsidiaries or affiliated joint ventures. In addition, a Preferred
Stockholders right to receive dividends on or in respect of the Preferred
Stock may be adversely affected in the event of a bankruptcy of any of the
Companys subsidiaries or affiliated joint ventures. Following the liquidation
of one of the Companys subsidiaries or joint ventures, the creditors of that
subsidiary or joint venture are generally entitled to be paid in full before
the Company is entitled to a distribution of any assets in the liquidation,
which may result in us receiving little, if any, value from the Companys
investment.

Upon the Companys voluntary or involuntary dissolution, liquidation or winding
up, the holders of Preferred Stock is entitled to be paid out of the assets
available for distribution to the Companys stockholders, after payment of the
debts and other liabilities of the Company and payment of any liquidation
values of any securities senior in liquidation rights to the Preferred Stock,
and before any payment or distribution is made to holders of the Common Stock
or any other class or series of stock of the Company ranking junior to the
Preferred Stock, the stated liquidation preference per share of $50.00, plus
accumulated and unpaid dividends, if any, with respect to each share.

If, upon any liquidation, dissolution or winding up of the Company, the
remaining assets available for distribution are insufficient to pay the holders
of the Preferred Stock and all other securities ranking equally with the
Preferred Stock with respect to liquidation the full amount to which they are
entitled, the holders of Preferred Stock will share those remaining assets
ratably, together with the holders of the securities ranking equally with the
Preferred Stock. Following the payment of the liquidation value in full with
respect to each share of Preferred Stock, no additional distributions will be
made to the holders of the Preferred Stock. Neither the sale of all or
substantially all of the Companys assets (including its subsidiaries assets),
nor the Companys merger or consolidation into or with any other corporation,
will be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, of the Company.

Except as otherwise provided below or as otherwise provided by applicable law,
holders of Preferred Stock are not entitled to vote on matters brought before
the Companys stockholders, including the election of directors.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

Without the consent of the holders of at least a majority in liquidation
preference of the shares of Preferred Stock then outstanding, the Company may
not (i) issue any additional Preferred Stock; (ii) authorize, create or issue
any shares of parity securities or senior securities; (iii) increase the
authorized amount of Preferred Stock or any class or series of parity
securities or senior securities or (iv) amend, alter or appeal any provision of
the Companys charter so as to adversely affect the relative preferences,
rights or powers of any outstanding Preferred Stock, except that the Company
may issue parity securities or senior securities to refinance, redeem or refund
the Preferred Stock subject to certain restrictions set forth in the Companys
charter.

If either (i) the Company fails to discharge its mandatory redemption
obligations with respect to shares of Preferred Stock in full or (ii) either
voluntary or involuntary bankruptcy proceedings are commenced in respect of the
Company (any event described in subclauses (i) or (ii) being referred to herein
as a Trigger Event), a vote of the holders of the shares of Preferred Stock,
voting together as a single class, will be required on all matters brought
before the stockholders of the Company. In addition, upon the occurrence of
any Trigger Event, the board of directors will be increased by two members and
the holders of shares of Preferred Stock, together with the holders of any
other class or series of Preferred Stock with like rights, will vote to elect
the two additional directors. These additional voting rights and the right to
elect directors will cease to exist upon the cure of the Trigger Event which
triggered such rights, but subject to the same vesting of such rights if any
Trigger Event subsequently occurs.

In the event the Company consummates any transaction constituting an asset sale
under the terms of the Companys charter, including but not limited to (i) any
sale, transfer, conveyance or other disposition for value of any assets of the
Company or any subsidiary other than in the ordinary course of business or (ii)
any issuance, sale, transfer, conveyance or other disposition for value of
equity interests of the Companys subsidiaries (subject to exception for any
such dispositions to the Company, any subsidiary of the Company or in exchange
for capital contributions), to the extent the Company has funds legally
available for such redemption payment, the Company must apply the net proceeds
of any such asset sale to redeem any or all outstanding shares of Preferred
Stock, on a pro rata basis at a price equal to $50.00 per share, plus accrued
and unpaid dividends, if any, payable in cash. Under the Companys charter,
the Company is required to give notice to the holders of Preferred Stock not
less than 15 days prior to the scheduled consummation of the asset sale giving
rise to such redemption.

If the Company has not redeemed all outstanding shares of 10% Fixed Coupon
Redeemable Preferred Stock by January 10, 2023 (the Mandatory Redemption
Date), to the extent the Company has funds legally available for such
redemption payment, the Company must redeem all outstanding shares of Preferred
Stock on the Mandatory Redemption Date at a price equal to $50.00 per share,
plus accrued and unpaid dividends, if any, payable in cash.

The Company may redeem the Preferred Stock at any time from the date of issue
to the business day immediately preceding the Mandatory Redemption Date, out of
funds legally available for such redemption payment, on a pro rata basis at a
price equal to $50.00 per share, plus accrued and unpaid dividends, if any,
payable in cash. The Company may not purchase, redeem or otherwise acquire for
value any shares of Preferred Stock in this manner unless (x) full cumulative
dividends have been paid or contemporaneously are declared and paid or set
apart for payment for all dividend periods for the Preferred Stock and for any
parity securities terminating on or prior to the applicable redemption date or
(y) shares of Preferred Stock are redeemed pro rata.

If, and so long as, any mandatory redemption obligation with respect to shares
of Preferred Stock is not fully discharged, the Company may not (1) directly or
indirectly, redeem, purchase, or otherwise acquire any parity security or
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of any parity securities (except in connection with a
redemption, sinking fund or other similar obligation to be satisfied with
junior securities or satisfied pro rata with shares of 10% Fixed Coupon
Redeemable Preferred Stock), or (2) declare or make any distribution of junior
securities (other than (A) any Stockholder Rights and (B) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, junior securities), or discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of
junior securities (other than a redemption, sinking fund or other similar
obligation in respect of junior securities (I) paid in shares of, or options,
warrants or other rights to subscribe for or purchase shares of, junior
securities or (II) by conversion into or exchange for junior securities).

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

Holders of the Preferred Stock have no preemptive rights and have no rights to
convert their Preferred Stock into any other securities. There are no
sinking-fund provisions contained in the Companys charter with respect to the
Preferred Stock. There is no liability for further calls or for assessments by
the Company. The holders of a majority in liquidation preference of the
outstanding shares of Preferred Stock consenting or voting as a separate class,
as the case may be, may waive compliance with any provision of Part C of
Article IV of the Companys charter.

Description of the Companys Series A Junior Participating Preferred Stock

In connection with the adoption of the Companys Stockholder Rights Agreement,
which is described below, the Companys board of directors has designated and
reserved for issuance a total of one-hundred thousand (100,000) shares of the
Companys Series A Junior Participating Preferred Stock, par value $0.01 per
share (Series A Junior Participating Preferred Stock). When issued and paid
for in accordance with the Stockholder Rights Agreement, the Series A Junior
Participating Preferred Stock will be fully paid and nonassessable. The
Company will appoint a transfer agent for the Series A Junior Participating
Preferred Stock if and when any shares are issued.

Each share of Series A Junior Participating Preferred Stock will entitle its
holder to receive dividends out of the Companys funds legally available for
the payment of dividends when, as and if declared by the Companys board of
directors. With respect to those dividends, the Series A Junior Participating
Preferred Stock will rank:



| |  |  | senior to all classes of the Common Stock and to each other
class of capital stock or series of the Companys preferred stock
that are designated to rank junior to the Series A Junior
Participating Preferred Stock;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | junior to the Preferred Stock and all classes of the Companys
preferred stock that are designated to rank senior to the Series A
Junior Participating Preferred Stock; and                                           
|
| |  |  | equal to all classes of the Companys preferred stock that are
designated to rank equally with the Series A Junior Participating
Preferred Stock.                                                                     

Dividends are payable quarterly in cash on the fifteenth day of March, June,
September and December of each year, in an amount per share (subject to
adjustment for a stock dividend on, or a subdivision or combination of, the
Companys Common Stock) equal to the greater of:



| |  |  | $10.00; and                                                                                                                                    
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 1,000 times the aggregate amount per share of all dividends
declared on the Common Stock since the immediately preceding dividend
payment date.

Upon the Companys liquidation, dissolution or winding up, the holders of
outstanding shares of Series A Junior Participating Preferred Stock will be
entitled to be paid out of the assets available for distribution to the
Companys stockholders after payment of any liquidation values of any
securities senior in liquidation rights to the Series A Junior Participating
Preferred Stock. After payment of the liquidation values of senior securities,
the holders of the Series A Junior Participating Preferred Stock will be
entitled to receive (subject to adjustment for a stock dividend on, or a
subdivision or combination or consolidation of, the Companys Common Stock) the
greater of (x) $1,000.00 for each share of Series A Junior Participating
Preferred Stock they hold, plus any accrued and unpaid dividends or
distributions on those shares and (y) the aggregate amount per share equal to
1,000 times the aggregate amount to be distributed per share to holders of the
Common Stock. If, upon any liquidation, dissolution or winding up of the
Company, the remaining assets available for distribution are insufficient to
pay the holders of the Series A Junior Participating Preferred Stock and all
other securities ranking equally with the Series A Junior Participating
Preferred Stock with respect to liquidation the full amount to which they are
entitled, the holders of Series A Junior Participating Preferred Stock will
share those remaining assets ratably, together with the holders of the
securities ranking equally with the Series A Junior Participating Preferred
Stock. Following the payment of the liquidation value in full with respect to
each share of Series A Junior Participating Preferred Stock, no additional
distributions will be made to the holders of the Series A Junior Participating
Preferred Stock.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

Subject to adjustment for a stock dividend on, or a subdivision or combination
of, the Common Stock, each share of Series A Junior Participating Preferred
Stock will entitle the holder to 1,000 votes on all matters submitted to a vote
of holders of the Common Stock. The holders of the Series A Junior
Participating Preferred Stock will vote together as a single class with the
holders of the Common Stock.

If dividends on the Series A Junior Participating Preferred Stock are in
arrears in an amount equal to six quarterly dividends, whether or not
consecutive, all holders of the Companys preferred stock which have such
provision in the Companys charter governing their terms, including holders of
the Series A Junior Participating Preferred Stock, whose dividends are in
arrears with respect to six quarterly periods will, voting as a single class,
be entitled to elect two new directors to the Companys board of directors.
The directors will serve until successors to them have been elected or until
dividends on the Series A Junior Participating Preferred Stock are no longer in
arrears.

The Series A Junior Participating Preferred Stock will not be redeemable. The
Series A Junior Participating Preferred Stock will not be convertible.

Stockholder Rights Agreement

Upon issuance, each share of Common Stock (whether originally issued or from
the Companys treasury) will be accompanied by a Stockholder Right. Each
Stockholder Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred Stock
at the Stockholder Rights purchase price, subject to adjustment pursuant to the
terms of the Stockholder Rights Agreement.

The Stockholder Rights Agreement is intended to encourage a potential acquirer
to negotiate directly with the Companys board of directors, but may have
anti-takeover effects. The Stockholder Rights Agreement could cause
substantial dilution to a person or group that acquires a substantial interest
in us without the prior approval of the Companys board of directors. The
effect of the Stockholder Rights may be to delay, defer or prevent a change in
control of the Company (including through a third party tender offer at a price
which reflects a premium to then prevailing trading prices) that may be
beneficial to the Companys stockholders.

Initially, the Stockholder Rights are attached to all Common Stock certificates
representing shares then outstanding, and no separate Stockholder Rights
certificates will be distributed. Subject to some exceptions specified in the
Stockholder Rights Agreement, the Stockholder Rights will separate from the
Common Stock upon the earlier of (i) the close of business on the day of a
public announcement that (a) a person has entered into an agreement or
arrangement with the Company or any subsidiary of the Company providing for an
acquisition transaction or (b) a person or group of affiliated or associated
persons, other than the Company, its subsidiaries or certain persons exempted
by the board of directors and the Creditors Committee as of the effective date
of the Plan, has become an Acquiring Person by (1) becoming an Adverse
Person in the judgment of the board of directors of the Company or (2)
acquiring beneficial ownership of 15% or more of the outstanding shares of
Common Stock other than as a result of (w) repurchases of stock by the Company,
(x) participation in a dividend reinvestment, stock option or similar plan, (y)
certain acquisitions of shares of Common Stock from the Company, or (z) certain
inadvertent actions by institutional or certain other stockholders (each of the
events described in clauses (i)(a) and (i)(b) above, the Stock Acquisition
Date), and (ii) 10 business days (or such later date as the Companys board of
directors will determine) following the commencement of a tender offer or
exchange offer that would result in a person or group becoming an Acquiring
Person.

The Stock Acquisition Date could occur as early as the effective date of the
Plan. The earlier to occur of the events in the preceding paragraph to occur
is referred to as the Stockholder Rights Distribution Date, although in any
event the separation of the Stockholder Rights from the Common Stock will not
occur prior to the effective date of the Plan.

Until the Stockholder Rights Distribution Date, (1) the Stockholder Rights will
be evidenced by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (2) Common Stock certificates will
contain a legend incorporating the Stockholder Rights Agreement by reference
and (3) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Stockholder Rights
associated with the Common Stock represented by such certificate. Pursuant to
the Stockholder Rights Agreement, the Company reserves the right to require
prior to the occurrence of a
Stockholder Rights Triggering Event (as defined below) that, upon any exercise
of Stockholder Rights, a number of Stockholder Rights be exercised so that only
whole shares of Stockholder Rights preferred stock will be issued.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

The Stockholder Rights are not exercisable until the Stockholder Rights
Distribution Date and expire at 5:00 p.m., New York City time, on January 10,
2013 unless such date is extended or the Stockholder Rights are earlier
redeemed or exchanged by the Company as described below.

As soon as practicable after the Stockholder Rights Distribution Date,
Stockholder Rights certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Stockholder Rights Distribution
Date and, thereafter, the separate Stockholder Rights certificates alone will
represent the Stockholder Rights. Only shares of Common Stock issued prior to
the Stockholder Rights Distribution Date will be issued with Stockholder
Rights.

In the event that a person becomes an Acquiring Person, except pursuant to an
offer for all outstanding shares of Common Stock that the independent directors
determine to be fair and not inadequate and to be otherwise in the best
interests of the Company and its stockholders, after receiving advice from one
or more investment banking firms of national standing (a Qualifying Offer),
each holder of a Stockholder Right will thereafter have the right to receive,
upon exercise, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the exercise
price of the Stockholder Right. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this paragraph, all
Stockholder Rights that are, or (under certain circumstances specified in the
Stockholder Rights Agreement) were, beneficially owned by any Acquiring Person
will be null and void. However, Stockholder Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Stockholder Rights are no longer redeemable by the Company as set forth below.

In the event that, at any time after a Stock Acquisition Date, the Company (1)
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation other than in a Qualifying Offer, (2)
the Company engages in a merger or other business combination transaction in
which the Company is the surviving corporation and any shares of Common Stock
are changed into or exchanged for other securities or assets other than in a
Qualifying Offer or (3) 50% or more of the assets, cash flow or earning power
of the Company and its subsidiaries (taken as a whole) are sold or transferred
so that each holder of a Stockholder Right (except as noted below) will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Stockholder Right, that number of shares of
common stock of the acquiring company that at the time of such transaction
would have a market value (determined as provided in the Stockholder Rights
Agreement) of two times the exercise price of the Stockholder Right. The
events set forth in this paragraph and in the preceding paragraph are referred
to as the Stockholder Rights Triggering Events.

At any time until a person becomes an Acquiring Person other than in connection
with a Qualifying Offer, the board of directors of the Company may redeem the
Stockholder Rights in whole, but not in part, at a price of $0.01 per
Stockholder Right (the Stockholder Rights Redemption Price), payable in cash,
Common Stock or other consideration deemed appropriate by the board of
directors of the Company. In addition, the board of directors of the Company
may, at any time after a person becomes an Acquiring Person other than in
connection with a Qualifying Offer and after any period during which the holder
of Stockholder Rights may exercise such Stockholder Rights expires, but prior
to any Stockholder Rights Triggering Event, redeem all but not less than all of
the then outstanding Stockholder Rights at the Stockholder Rights Redemption
Price (x) in connection with any merger, consolidation or sale or other
transfer (in one transaction or in a series of related transactions) of assets,
cash flow or earning power aggregating more than 50% of the assets or earning
power of the Company and its subsidiaries (taken as a whole), in which all
holders of shares of Common Stock are treated alike and not involving (other
than as a holder of Common Stock being treated like all other such holders) an
Acquiring Person or any affiliate or associate of an Acquiring Person or (y)(1)
if and for so long as the Acquiring Person is not thereafter the beneficial
owner of 15% of the shares of Common Stock and (2) at the time of redemption,
no other persons are Acquiring Persons. Immediately upon the action of the
board of directors of the Company electing to redeem the Stockholder Rights,
the Stockholder Rights will terminate and the only right of the holders of
Stockholder Rights will be to receive the Stockholder Rights Redemption Price.

At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding shares of
Common Stock, the board of directors of the Company may exchange the
Stockholder Rights (other than
Stockholder Rights owned by such person or group that have become void), in
whole or in part, for Common Stock at an exchange ratio of one share of Common
Stock, or one one-thousandth of a share of Stockholder Rights Preferred Stock
(or of a share of a class or series of the Company preferred stock having
equivalent rights, preferences and privileges), per Stockholder Right subject
to adjustment.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

Until a Stockholder Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the
Stockholder Rights should not be taxable to holders of Common Stock or to the
Company, the Company stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Stockholder Rights become
exercisable for Common Stock or other consideration of the Company or for
common stock of the acquiring company or in the event of the redemption of the
Stockholder Rights as set forth above.

Any of the provisions of the Stockholder Rights Agreement may be amended by the
board of directors of the Company prior to the Stockholder Rights Distribution
Date. After the Stockholder Rights Distribution Date, the provisions of the
Stockholder Rights Agreement may be amended by the board of directors of the
Company in order to cure any ambiguity, to make changes that do not adversely
affect the interests of holders of Stockholder Rights, or to shorten or
lengthen any time period under the Stockholder Rights Agreement, except that
the Stockholder Rights Agreement may not be supplemented or amended to lengthen
(1) a time period relating to when the Stockholder Rights may be redeemed at
such time as when the Stockholder Rights are not then redeemable or (2) any
other time period unless any such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Stockholder Rights under the Stockholder Rights Agreement. The foregoing
notwithstanding, no amendment may be made to the Stockholder Rights Agreement
at a time when the Stockholder Rights are not redeemable, except to cure any
ambiguity or correct or supplement any provision contained in the Stockholder
Rights Agreement that may be defective or inconsistent with any other provision
therein.

The following description of Old NTLs Capital Structure is that of NTL
Incorporated, and relates to periods, prior to January 10, 2003.

Stock Splits

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

Sales of Preferred Stock and Common Stock

In May 2000, in connection with the acquisition of certain assets of Cable &
Wireless Communications plc, France Telecom paid £1,555.6 million ($2,327.6
million) for 42.2 million shares of Old NTLs common stock and £1,244.4 million
($1,862.0 million) for 2.0 million shares of Old NTLs now canceled 5%
Cumulative Participating Convertible Preferred Stock.

Series Preferred Stock

In December 1998, Old NTL issued 52,000 shares of its now canceled 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
Old NTLs common stock.

The now canceled 5% Cumulative Participating Convertible Preferred Stock (5%
Preferred Stock) had a stated value of $1,000 per share, was convertible into
common stock at a conversion price of $80 per share and was redeemable ten
years from the issue date, at Old NTLs option, for cash, shares of common
stock or a combination of both. The 5% Preferred Stock was redeemable by Old
NTL on the earlier of seven years from the issue date or the date that is both
four years from the issue date and after Old NTLs common stock has traded
above $96 per share for 25 consecutive trading days. Dividends were payable
quarterly at Old NTLs option in cash, common stock or additional shares of 5%
Preferred Stock. As of December 31, 2002, Old NTL had accrued $304.5 million
for dividends and had issued approximately 213,000 shares for $213.0 million of
such accrued dividends.

At December 31, 2002 and 2001, the 5% Preferred Stock would have been
convertible into an aggregate of 39.5 million shares and 37.0 million shares of
Old NTLs common stock, respectively.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

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

|                                    |  |          |         |       |  |    |          |   |  |  |           | 
|----------------------------------- |  | -------- | ------- | ----- |  | -- | -------- | - |  |  | --------- | 
|                                    |  | 9.9%     |         |       |  |    |          |   |  | 
|                                    |  | Series B |         | 5.25% |  | 5%
|                                    |  |          |         |       |  |   
|Balance, December 31, 1999          |  |          | 52,000  |       |  |    | 525,000  |   |  |  | 755,000   | 
|Issued for cash                     |  |          |        |       |  |    |         |   |  |  | 2,000,000 | 
|Issued for dividends                |  |          |        |       |  |    | 3,000    |   |  |  | 103,000   | 
|Conversion into common stock        |  |          | (52,000 | )     |  |    | (528,000 | ) |  |  |          | 
|                                    |  |          |         |       |  |    |          |   |  |  |           | 
|Balance, December 31, 2000          |  |          |        |       |  |    |         |   |  |  | 2,858,000 | 
|Issued for dividends                |  |          |        |       |  |    |         |   |  |  | 105,000   | 
|                                    |  |          |         |       |  |    |          |   |  |  |           | 
|Balance, December 31, 2001 and 2002 |  |          |        |       |  |    |         |   |  |  | 2,963,000 | 
|                                    |  |          |         |       |  |    |          |   |  |  |           | 

Warrants

Old NTL had the following now canceled warrants outstanding as of December 31,
2002: (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). These warrants were canceled on the
Effective Date pursuant to the Plan.

Stock Options

All of Old NTLs outstanding stock options were canceled on the Effective Date
pursuant to the Plan. The stock option plans described below covered certain
of the Companys employees, as well as employees of the discontinued
operations.

There were 335,000 shares and 2,733,000 shares of common stock reserved for
issuance under the 1991 Stock Option Plan and the 1993 Stock Option Plan,
respectively. These plans provided that incentive stock options (ISOs) would
be granted at the fair market value of Old NTLs common stock on the date of
grant, and nonqualified stock options (NQSOs) would be granted at not less
than 85% of the fair market value of Old NTLs common stock on the date of
grant. Options were exercisable as to 20% of the shares subject thereto on the
date of grant and became exercisable as to an additional 20% of the shares
subject thereto on each January 1 thereafter, while the optionee remained an
employee of Old NTL. Options expired ten years after the date of the grant.

There were 16,000 shares and 67,000 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 would be granted to
members of the Board of Directors who were not employees of Old NTL or any of
its affiliates. These plans provided that all options would be granted at the
fair market value of Old NTLs common stock on the date of grant, and options
would expire ten years after the date of the grant. Options were exercisable as
to 20% of the shares subject thereto on the date of grant and became
exercisable as to an additional 20% of the shares subject thereto on each
subsequent anniversary of the grant date while the optionee remained a director
of Old NTL. Options expired ten years after the date of the grant.

There were 19,684,000 shares of common stock reserved for issuance under the
1998 Non-Qualified Stock Option Plan. The exercise price of a NQSO would have
been determined by the Compensation and Option Committee. Options were
generally exercisable ratably over five to ten years while the optionee
remained an employee of Old NTL. Options expired ten years after the date of
the grant.

In December 2000, the Board of Directors of Old NTL approved the rescission of
the exercise of ISOs for 156,000 shares of Old NTLs common stock, and Old NTL
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, Old NTL recognized no compensation expense.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

Pro forma information regarding net loss and net loss per share is required by
SFAS No. 123, and has been determined as if Old NTL 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 2002, 2001 and 2000: risk-free interest rates of 4.47%, 4.47%
and 5.30%, respectively, dividend yield of 0%, volatility factor of the
expected market price of Old NTLs common stock of .702, .702 and .385,
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 Old NTLs stock options have characteristics significantly different
from those of traded options and because changes in the subjective input
assumptions can materially affect the fair value estimate, in managements
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options vesting period. The effects of
applying SFAS No. 123 on pro forma disclosures of net loss and net loss per
share for the years ended December 31, 2002, 2001 and 2000 are not likely to be
representative of the pro forma effects on net loss and net loss per share in
future years. Following is Old NTLs pro forma information:

|                                                 |  |                                         |          |      |  |      |           |   |  |   |          |  
|------------------------------------------------ |  | --------------------------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                 |  | Year Ended December 31,                
|                                                 |  |                                        
|                                                 |  | 2002                                    |          | 2001 |  | 2000
|                                                 |  |                                         |          |      |  |     
|                                                 |  | (in millions, except per share amounts)
|Net (loss)                                       |  | $                                       | (3,454.9 | )    |  | $    | (14,241.3 | ) |  | $ | (2,963.7 | )
|Pro forma net (loss)                             |  | $                                       | (3,719.2 | )    |  | $    | (14,509.6 | ) |  | $ | (3,219.5 | )
|Basic and diluted net (loss) per share           |  |                                         | (13.02   | )    |  |      | (52.78    | ) |  |   | (14.54   | )
|Basic and diluted pro forma net (loss) per share |  |                                         | (13.97   | )    |  |      | (53.75    | ) |  |   | (15.72   | )

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

|                                |  |               |      |          |  |           |       |               |  |           |      |           |  |               |       |  |  |           |      |   |  |   |       | 
|------------------------------- |  | ------------- | ---- | -------- |  | --------- | ----- | ------------- |  | --------- | ---- | --------- |  | ------------- | ----- |  |  | --------- | ---- | - |  | - | ----- | 
|                                |  | 2002          |      | 2001     |  | 2000     
|                                |  |               |      |          |  |          
|                                |  |               |      |          |  | Weighted- |       |               |  |           |      | Weighted- |  |               |       |  |  | Weighted-
|                                |  |               |      |          |  | Average   |       |               |  |           |      | Average   |  |               |       |  |  | Average  
|                                |  | Number of     |      | Exercise |  | Number of |       | Exercise      |  | Number of |      | Exercise 
|                                |  | Options       |      | Price    |  | Options   |       | Price         |  | Options   |      | Price    
|                                |  |               |      |          |  |           |       |               |  |           |      |          
|                                |  | (in millions) |      |          |  |           |       | (in millions) |  |           |      |           |  | (in millions) |       |  |  |          
|Outstanding  beginning of year |  |               | 71.9 |          |  | $         | 36.13 |               |  |           | 61.4 |           |  | $             | 41.52 |  |  |           | 29.2 |   |  | $ | 24.60 | 
|Granted                         |  |               |     |          |  |           |      |               |  |           | 14.3 |           |  |               | 12.55 |  |  |           | 34.8 |   |  |   | 54.90 | 
|Exercised                       |  |               |     |          |  |           |      |               |  |           | (1.1 | )         |  |               | 11.93 |  |  |           | (2.1 | ) |  |   | 17.13 | 
|Forfeited                       |  |               | (3.7 | )        |  |           | 39.09 |               |  |           | (2.7 | )         |  |               | 42.46 |  |  |           | (0.5 | ) |  |   | 83.31 | 
|                                |  |               |      |          |  |           |       |               |  |           |      |           |  |               |       |  |  |           |      |   |  |   |       | 
|Outstanding  end of year       |  |               | 68.2 |          |  | $         | 36.06 |               |  |           | 71.9 |           |  | $             | 36.13 |  |  |           | 61.4 |   |  | $ | 41.52 | 
|                                |  |               |      |          |  |           |       |               |  |           |      |           |  |               |       |  |  |           |      |   |  |   |       | 
|Exercisable at end of year      |  |               | 34.3 |          |  | $         | 30.37 |               |  |           | 24.7 |           |  | $             | 27.50 |  |  |           | 16.3 |   |  | $ | 21.82 | 
|                                |  |               |      |          |  |           |       |               |  |           |      |           |  |               |       |  |  |           |      |   |  |   |       | 

Weighted-average fair value of options, calculated using the Black-Scholes
option pricing model, granted during 2002, 2001 and 2000 is $5.69, $5.69 and
$32.19 respectively.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Shareholders Equity (continued)

The following table summarizes the status of the stock options outstanding and
exercisable at December 31, 2002:

|                 |  |           |      |                           |      |                           |  |           |        |           |  |  |     |               |  |           |        |  |  |  |  | 
|---------------- |  | --------- | ---- | ------------------------- | ---- | ------------------------- |  | --------- | ------ | --------- |  |  | --- | ------------- |  | --------- | ------ |  |  |  |  | 
|                 |  |           |      | Stock Options Outstanding |      | Stock Options Exercisable
|                 |  |           |      |                           |      |                          
|                 |  |           |      |                           |      |                           |  | Weighted- |        | Weighted- |  |  |     |               |  | Weighted-
|                 |  |           |      |                           |      |                           |  | Remaining |        | Average   |  |  |     |               |  | Average  
|Range of         |  | Number of |      | Contractual               |      | Exercise                  |  | Number of |        | Exercise 
|Exercise Prices  |  | Options   |      | Life                      |      | Price                     |  | Options   |        | Price    
|                 |  |           |      |                           |      |                           |  |           |        |          
|                 |  |           |      | (in millions)             |      |                           |  |           |        |           |  |  |     | (in millions) |  |           |        | 
|$0.35 to $9.36   |  |           | 4.4  |                           |      | 3.1 Years                 |  | $         | 5.434  |           |  |  | 4.3 |               |  | $         | 5.434  | 
|$10.00 to $18.40 |  |           | 14.8 |                           |      | 4.2 Years                 |  | $         | 11.136 |           |  |  | 8.0 |               |  | $         | 12.082 | 
|$19.86 to $27.84 |  |           | 12.9 |                           |      | 6.6 Years                 |  | $         | 23.395 |           |  |  | 8.2 |               |  | $         | 23.305 | 
|$28.06 to $35.64 |  |           | 0.6  |                           |      | 6.3 Years                 |  | $         | 30.372 |           |  |  | 0.5 |               |  | $         | 30.477 | 
|$36.12 to $40.19 |  |           | 0.8  |                           |      | 7.2 Years                 |  | $         | 38.823 |           |  |  | 0.5 |               |  | $         | 38.629 | 
|$42.44 to $47.44 |  |           | 13.0 |                           |      | 7.4 Years                 |  | $         | 44.437 |           |  |  | 4.5 |               |  | $         | 44.397 | 
|$48.38 to $53.76 |  |           | 4.6  |                           |      | 6.6 Years                 |  | $         | 50.383 |           |  |  | 3.2 |               |  | $         | 50.400 | 
|$57.60 to $63.63 |  |           | 16.6 |                           |      | 6.8 Years                 |  | $         | 63.409 |           |  |  | 4.7 |               |  | $         | 62.986 | 
|$68.20 to $75.56 |  |           | 0.1  |                           |      | 7.1 Years                 |  | $         | 75.413 |           |  |  | 0.1 |               |  | $         | 75.401 | 
|$91.13 to $97.50 |  |           | 0.4  |                           |      | 7.1 Years                 |  | $         | 93.713 |           |  |  | 0.3 |               |  | $         | 93.713 | 
|                 |  |           |      |                           |      |                           |  |           |        |           |  |  |     |               |  |           |        |  |  | 
|                 |  | Total     |      |                           | 68.2 |                           |  |           |        |           |  |  |     |               |  |           | 34.3   |  |  |  |  | 
|                 |  |           |      |                           |      |                           |  |           |        |           |  |  |     |               |  |           |        |  |  | 

As of December 31, 2002, Old NTL had 171.8 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, all of which have now been canceled.

20. Employee Benefit Plans

Cablecom operates a defined benefit pension plan in Switzerland. The assets of
the Plan 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.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

20. Employee Benefit Plans (continued)

At December 31, 2002, the projected benefit obligations of Old NTLs defined
benefit pension plans exceeded the fair value of the plan assets by $44.5
million. The projected benefit obligations, accumulated benefit obligations
and fair value of plan assets were $156.4 million, $125.1 million and $112.0
million, respectively, at December 31, 2002.

|                                                                      |  |               |       |      |  |   |       |  
|--------------------------------------------------------------------- |  | ------------- | ----- | ---- |  | - | ----- | -
|                                                                      |  | Year Ended   
|                                                                      |  | December 31, 
|                                                                      |  |              
|                                                                      |  | 2002          |       | 2001
|                                                                      |  |               |       |     
|                                                                      |  | (in millions)
|Change in benefit obligation                                          |  |               |       |      |  |   |       |  
|Benefit obligation at beginning of year                               |  | $             | 145.7 |      |  | $ | 122.2 |  
|Disposition                                                           |  |               | (21.8 | )    |  |   |      |  
|Service cost                                                          |  |               | 7.4   |      |  |   | 7.4   |  
|Interest cost                                                         |  |               | 6.3   |      |  |   | 5.5   |  
|Actuarial losses (gains)                                              |  |               | 10.3  |      |  |   | 12.4  |  
|Benefits paid                                                         |  |               | (4.2  | )    |  |   | (3.1  | )
|Foreign currency exchange rate changes                                |  |               | 12.7  |      |  |   | 1.2   |  
|                                                                      |  |               |       |      |  |   |       |  
|Benefit obligation at end of year                                     |  | $             | 156.4 |      |  | $ | 145.6 |  
|                                                                      |  |               |       |      |  |   |       |  
|Change in plan assets                                                 |  |               |       |      |  |   |       |  
|Fair value of plan assets at beginning of year                        |  | $             | 142.3 |      |  | $ | 151.0 |  
|Disposition                                                           |  |               | (15.8 | )    |  |   |      |  
|Actual return on plan assets                                          |  |               | (30.9 | )    |  |   | (15.0 | )
|Company contributions                                                 |  |               | 4.7   |      |  |   | 4.5   |  
|Plan participants contributions                                      |  |               | 3.5   |      |  |   | 3.4   |  
|Benefits paid                                                         |  |               | (4.2  | )    |  |   | (3.1  | )
|Foreign currency exchange rates changes                               |  |               | 12.4  |      |  |   | 1.5   |  
|                                                                      |  |               |       |      |  |   |       |  
|Fair value of plan assets at end of year                              |  | $             | 112.0 |      |  | $ | 142.3 |  
|                                                                      |  |               |       |      |  |   |       |  
|Funded status of the plan                                             |  | $             | (44.5 | )    |  | $ | (3.4  | )
|Unrecognized net actuarial (gains) losses                             |  |               | 61.3  |      |  |   | 17.8  |  
|Unrecognized transition obligation                                    |  |               | 0.5   |      |  |   | 0.8   |  
|                                                                      |  |               |       |      |  |   |       |  
|Net amount recognized                                                 |  | $             | 17.3  |      |  | $ | 15.2  |  
|                                                                      |  |               |       |      |  |   |       |  
|Amounts recognized in the statement of financial position consist of: |  |               |       |      |  |   |       |  
|Prepaid benefit cost                                                  |  | $             | 16.8  |      |  | $ | 14.4  |  
|Accrued benefit liability                                             |  |               | (30.5 | )    |  |   |      |  
|Intangible asset                                                      |  |               | 1.0   |      |  |   | 0.8   |  
|Accumulated other comprehensive loss                                  |  |               | 30.0  |      |  |   |      |  
|                                                                      |  |               |       |      |  |   |       |  
|Net amount recognized                                                 |  | $             | 17.3  |      |  | $ | 15.2  |  
|                                                                      |  |               |       |      |  |   |       |  

|                       |                                                  |  |                         |      |      |  |  |      |  
|---------------------- | ------------------------------------------------ |  | ----------------------- | ---- | ---- |  |  | ---- | -
|                       |                                                  |  | Year Ended December 31,
|                       |                                                  |  |                        
|                       |                                                  |  | 2002                    |      | 2001
|                       |                                                  |  |                         |      |     
|Actuarial assumptions: |                                                  |  |                         |      |      |  |  |     
|                       | Discount rate                                    |  |                         | 4.00 | %    |  |  | 4.50 | %
|                       | Rate of compensation increase                    |  |                         | 1.00 | %    |  |  | 2.00 | %
|                       | Expected long-term rate of return on plan assets |  |                         | 4.00 | %    |  |  | 5.50 | %

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

20. Employee Benefit Plans (continued)

The components of net pension costs are as follows:

|                                 |  |                         |      |      |  |      |      |   |  |   |       |  
|-------------------------------- |  | ----------------------- | ---- | ---- |  | ---- | ---- | - |  | - | ----- | -
|                                 |  | Year Ended December 31,
|                                 |  |                        
|                                 |  | 2002                    |      | 2001 |  | 2000
|                                 |  |                         |      |      |  |     
|                                 |  | (in millions)          
|Service cost                     |  | $                       | 7.4  |      |  | $    | 7.4  |   |  | $ | 6.1   |  
|Interest cost                    |  |                         | 6.3  |      |  |      | 5.5  |   |  |   | 5.5   |  
|Expected return on plan assets   |  |                         | (6.3 | )    |  |      | (8.7 | ) |  |   | (13.7 | )
|Plan participants contributions |  |                         | (3.5 | )    |  |      | (3.4 | ) |  |   | (2.8  | )
|Net amortization and deferral    |  |                         |     |      |  |      | (0.5 | ) |  |   | 4.0   |  
|                                 |  |                         |      |      |  |      |      |   |  |   |       |  
|                                 |  | $                       | 3.9  |      |  | $    | 0.3  |   |  | $ | (0.9  | )
|                                 |  |                         |      |      |  |      |      |   |  |   |       |  

21. Leases

Future minimum annual payments at December 31, 2002 are as follows (in
millions). The table reflects Old NTLs contractual obligations.

|                             |  |           |      | 
|---------------------------- |  | --------- | ---- | 
|                             |  | Operating
|                             |  | Leases   
|                             |  |          
|Year ending December 31:     |  |           |      | 
|2003                         |  | $         | 4.8  | 
|2004                         |  |           | 5.1  | 
|2005                         |  |           | 5.1  | 
|2006                         |  |           | 5.3  | 
|2007                         |  |           | 5.5  | 
|Thereafter                   |  |           | 6.9  | 
|                             |  |           |      | 
|Total minimum lease payments |  | $         | 32.7 | 
|                             |  |           |      | 

Leases for buildings, office space and equipment extend through 2019. Total
rental expense for the years ended December 31, 2002, 2001 and 2000 under
operating leases was $7.0 million, $16.4 million and $10.0 million,
respectively.

22. Commitments and Contingent Liabilities

At December 31, 2002, Old NTL was committed to pay approximately $121.8 million
for equipment and services and for investments in and loans to affiliates.
This amount included approximately $48.7 million for operations and other
commitments from January 1, 2004 to 2013. The aggregate amount of the fixed
and determinable portion of these obligations for the succeeding fiscal years
is as follows (in millions):

|     |  |                          |      | 
|---- |  | ------------------------ | ---- | 
|     |  | Year
Ending December 31:
|     |  |                         
|2003 |  | $                        | 73.1 | 
|2004 |  |                          | 9.2  | 
|2005 |  |                          | 9.2  | 
|2006 |  |                          | 1.4  | 
|2007 |  |                          | 1.4  | 
|     |  |                          |      | 
|     |  | $                        | 94.3 | 
|     |  |                          |      | 

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.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

22. Commitments and Contingent Liabilities (continued)

Morgan Stanley

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

B2 (Bredband) AG

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

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

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

Cablecom

Cablecom is the principal borrower under an amended and restated credit
agreement dated as of April 30, 2002 and effective as of May 2, 2002. Under
the credit agreement, Cablecom and one of its subsidiaries are indebted in an
amount of approximately CHF 3,792 million (which includes recent accrued
interest payments). Although the credit facility was originally scheduled to
mature on April 30, 2003, upon the request of Cablecom, the maturity date has
been extended to the business day following May 31, 2003, with an additional
automatic extension to June 30, 2003 under certain circumstances. In addition,
Cablecom has been notified by the lenders that it is in default under the
credit agreement. Accordingly, the lenders could seek to accelerate the
maturity of the credit facility at any time.

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

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

22. Commitments and Contingent Liabilities (continued)

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

In order to seek to address the foregoing issues, Cablecom is currently in
negotiations with its lenders regarding an overall financial restructuring of
Cablecom. If consummated, such restructuring is expected to include a
reduction in the amount of debt outstanding, an extension of maturity date of
such debt and control of Cablecom being assumed by the lenders. As part of
such negotiations, the Company is seeking to retain a small minority interest
in Cablecom in consideration for its cooperation in permitting Cablecom to
reach a consensual restructuring plan with its lenders. There is, however, no
assurance that such negotiations will be successful. Further, whether or not
such negotiations are successful, the Company expects to be deprived of the
Companys controlling interest in Cablecom in the near future. After such
occurrence, the results of Cablecom will not be reported as part of the
Companys consolidated results of operations.

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

23. Geographic Information

|                  |               |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|----------------- | ------------- | ------------- | ---- | ----------- |  | ----- | ------- | ----- |  | - | ----- |  |  | - | ------- | 
|                  |               | United States |      | Switzerland |  | Other |         | Total
|                  |               |               |      |             |  |       |         |      
|                  | (in millions)
|2002              |               |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|Revenues          |               | $             |     |             |  | $     | 401.6   |       |  | $ | 34.3  |  |  | $ | 435.9   | 
|Long-lived assets |               |               | 22.6 |             |  |       | 2,196.8 |       |  |   | 73.4  |  |  |   | 2,292.8 | 
|2001              |               |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|Revenues          |               | $             |     |             |  | $     | 329.2   |       |  | $ | 62.4  |  |  | $ | 391.6   | 
|Long-lived assets |               |               | 41.7 |             |  |       | 2,631.6 |       |  |   | 364.2 |  |  |   | 3,037.5 | 
|2000              |               |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|Revenues          |               | $             |     |             |  | $     | 202.5   |       |  | $ | 24.3  |  |  | $ | 226.8   | 
|Long-lived assets |               |               | 25.1 |             |  |       | 3,828.1 |       |  |   | 923.6 |  |  |   | 4,776.8 | 

F-49



---



##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization

The following consolidating financial statements of Old NTL and subsidiaries as
of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001
and 2000 is being provided pursuant to AICPA Statement of Position 90-7. Old
NTL, NTL Delaware, NTL Communications Corp., Diamond Cable Communications
Limited, Diamond Holdings Limited and Communications Cable Funding Corp. are
included in Entities in Reorganization. All other wholly owned direct and
indirect subsidiaries of Old NTL are included in Entities Not in
Reorganization.

(in millions)

|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------- | -------------- | ---------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ------- | ------- | - | - | -------- | -------- | -
|                                                                               |                                                               |                | Year Ended December 31, 2002
|                                                                               |                                                               |                |                             
|                                                                               |                                                               |                |                              |                |    |             | Entities Not |              |   |   |         |         |   |   |         
|                                                                               |                                                               |                | Entities in                  |                | in |             |              |              |   |   |         |         |  
|Statements of Operations                                                       |                                                               | Reorganization |                              | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                               |                |                              |                |    |             |              |             
|Revenue                                                                        |                                                               | $              |                             |                |    | $           | 435.9        |              |   | $ |        |         |   | $ | 435.9    |         
|Costs and expenses                                                             |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                               |                |                             |                |    |             | 175.4        |              |   |   |        |         |   |   | 175.4    |         
|Selling, general and administrative expenses                                   |                                                               |                | 3.7                          |                |    |             | 143.7        |              |   |   | (8.6    | )       |   |   | 138.8    |         
|Asset impairments                                                              |                                                               |                |                             |                |    |             | 854.3        |              |   |   |        |         |   |   | 854.3    |         
|Other charges                                                                  |                                                               |                |                             |                |    |             | 3.5          |              |   |   |        |         |   |   | 3.5      |         
|Corporate expenses                                                             |                                                               |                | 11.7                         |                |    |             | (0.2         | )            |   |   |        |         |   |   | 11.5     |         
|Depreciation                                                                   |                                                               |                | 0.7                          |                |    |             | 222.0        |              |   |   |        |         |   |   | 222.7    |         
|Amortization                                                                   |                                                               |                | 13.1                         |                |    |             | 82.4         |              |   |   |        |         |   |   | 95.5     |         
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|                                                                               |                                                               |                | 29.2                         |                |    |             | 1,481.1      |              |   |   | (8.6    | )       |   |   | 1,501.7  |         
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Operating loss                                                                 |                                                               |                | (29.2                        | )              |    |             | (1,045.2     | )            |   |   | 8.6     |         |   |   | (1,065.8 | )       
|Other income (expense)                                                         |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Interest income and other, net                                                 |                                                               |                | (2.1                         | )              |    |             | (13.3        | )            |   |   | 4.4     |         |   |   | (11.0    | )       
|Interest expense (contractual interest of $223.5
(2002))                       |                                                               |                | (28.1                        | )              |    |             | (128.0       | )            |   |   |        |         |   |   | (156.1   | )       
|Share of (losses) from equity investments                                      |                                                               |                | (2,787.4                     | )              |    |             | (22.4        | )            |   |   | 2,558.5 |         |   |   | (251.3   | )       
|Other gains (losses)                                                           |                                                               |                | 1.1                          |                |    |             | 1.9          |              |   |   |        |         |   |   | 3.0      |         
|Foreign currency transaction gains                                             |                                                               |                | 9.3                          |                |    |             |             |              |   |   |        |         |   |   | 9.3      |         
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                               |                | (2,836.4                     | )              |    |             | (1,207.0     | )            |   |   | 2,571.5 |         |   |   | (1,471.9 | )       
|Recapitalization items, net                                                    |                                                               |                | 0.4                          |                |    |             | (5.2         | )            |   |   |        |         |   |   | (4.8     | )       
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) before income taxes and discontinued
operations                         |                                                               |                | (2,836.0                     | )              |    |             | (1,212.2     | )            |   |   | 2,571.5 |         |   |   | (1,476.7 | )       
|Income tax (expense) benefit                                                   |                                                               |                | 3.3                          |                |    |             | 129.4        |              |   |   | (4.6    | )       |   |   | 128.1    |         
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) from continuing operations                                              |                                                               |                | (2,832.7                     | )              |    |             | (1,082.8     | )            |   |   | 2,566.9 |         |   |   | (1,348.6 | )       
|Discontinued operations:                                                       |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|                                                                               | (Loss) from discontinued operations, net of taxes             |                |                              | (7,017.7       | )  |             |              | (1,737.4     | ) |   |         | 6,654.5 |   |   |          | (2,100.6 | )
|                                                                               | (Loss) gain on sales of discontinued operations,
net of taxes |                |                              | 1.8            |    |             |              | 31.4         |   |   |         | (38.9   | ) |   |          | (5.7     | )
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) from discontinued operations                                            |                                                               |                | (7,015.9                     | )              |    |             | (1,706.0     | )            |   |   | 6,615.6 |         |   |   | (2,106.3 | )       
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Net (loss)                                                                     |                                                               | $              | (9,848.6                     | )              |    | $           | (2,788.8     | )            |   | $ | 9,182.5 |         |   | $ | (3,454.9 | )       
|                                                                               |                                                               |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         

F-50



---



##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |           |  
|------------------------------------------------------------------------------ | ----------------------------------------------------- | -------------- | ---------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | -------- | -------- |  | - | --------- | --------- | -
|                                                                               |                                                       |                | Year Ended December 31, 2001
|                                                                               |                                                       |                |                             
|                                                                               |                                                       |                |                              |                |    |             | Entities Not |              |   |   |          |          |  |   |          
|                                                                               |                                                       |                | Entities in                  |                | in |             |              |              |   |   |          |          | 
|Statements of Operations                                                       |                                                       | Reorganization |                              | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                       |                |                              |                |    |             |              |             
|Revenue                                                                        |                                                       | $              |                             |                |    | $           | 391.6        |              |   | $ |         |          |  | $ | 391.6     |          
|Costs and expenses                                                             |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                       |                |                             |                |    |             | 170.4        |              |   |   |         |          |  |   | 170.4     |          
|Selling, general and administrative expenses                                   |                                                       |                | 5.9                          |                |    |             | 180.2        |              |   |   | (8.1     | )        |  |   | 178.0     |          
|Asset impairments                                                              |                                                       |                |                             |                |    |             | 887.0        |              |   |   | 25.1     |          |  |   | 912.1     |          
|Other charges                                                                  |                                                       |                |                             |                |    |             | 12.2         |              |   |   |         |          |  |   | 12.2      |          
|Corporate expenses                                                             |                                                       |                | 42.2                         |                |    |             | 0.3          |              |   |   |         |          |  |   | 42.5      |          
|Depreciation                                                                   |                                                       |                | 2.6                          |                |    |             | 165.4        |              |   |   | (13.6    | )        |  |   | 154.4     |          
|Amortization                                                                   |                                                       |                | 3.1                          |                |    |             | 385.1        |              |   |   | 45.2     |          |  |   | 433.4     |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|                                                                               |                                                       |                | 53.8                         |                |    |             | 1,800.6      |              |   |   | 48.6     |          |  |   | 1,903.0   |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|Operating loss                                                                 |                                                       |                | (53.8                        | )              |    |             | (1,409.0     | )            |   |   | (48.6    | )        |  |   | (1,511.4  | )        
|Other income (expense)                                                         |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|Interest income and other, net                                                 |                                                       |                | 10.4                         |                |    |             | 14.6         |              |   |   | (4.6     | )        |  |   | 20.4      |          
|Interest expense                                                               |                                                       |                | (74.3                        | )              |    |             | (126.1       | )            |   |   | 5.3      |          |  |   | (195.1    | )        
|Share of (losses) from equity investments                                      |                                                       |                | (3,973.4                     | )              |    |             | (40.6        | )            |   |   | 3,354.0  |          |  |   | (660.0    | )        
|Other gains (losses)                                                           |                                                       |                | (109.3                       | )              |    |             | 50.8         |              |   |   | (0.4     | )        |  |   | (58.9     | )        
|Foreign currency transaction (losses)                                          |                                                       |                | (10.1                        | )              |    |             | (4.1         | )            |   |   | (0.1     | )        |  |   | (14.3     | )        
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                       |                | (4,210.5                     | )              |    |             | (1,514.4     | )            |   |   | 3,305.6  |          |  |   | (2,419.3  | )        
|Recapitalization items, net                                                    |                                                       |                |                             |                |    |             |             |              |   |   |         |          |  |   |          |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|(Loss) before income taxes and discontinued
operations                         |                                                       |                | (4,210.5                     | )              |    |             | (1,514.4     | )            |   |   | 3,305.6  |          |  |   | (2,419.3  | )        
|Income tax benefit                                                             |                                                       |                | 2.4                          |                |    |             | 48.5         |              |   |   |         |          |  |   | 50.9      |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|(Loss) from continuing operations                                              |                                                       |                | (4,208.1                     | )              |    |             | (1,465.9     | )            |   |   | 3,305.6  |          |  |   | (2,368.4  | )        
|Discontinued operations:                                                       |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|                                                                               | (Loss) from discontinued operations, net of taxes     |                |                              | (36,554.0      | )  |             |              | (11,562.3    | ) |   |          | 36,243.4 |  |   |           | (11,872.9 | )
|                                                                               | Gain on sale of discontinued operations, net of
taxes |                |                              |               |    |             |              |             |   |   |          |         |  |   |           |          |  
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|(Loss) from discontinued operations                                            |                                                       |                | (36,554.0                    | )              |    |             | (11,562.3    | )            |   |   | 36,243.4 |          |  |   | (11,872.9 | )        
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          
|Net (loss)                                                                     |                                                       | $              | (40,762.1                    | )              |    | $           | (13,028.2    | )            |   | $ | 39,549.0 |          |  | $ | (14,241.3 | )        
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |          |          |  |   |           |          

F-51



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------ | -------------- | ---------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ------- | ------- |  | - | -------- | -------- | -
|                                                                               |                                                              |                | Year Ended December 31, 2000
|                                                                               |                                                              |                |                             
|                                                                               |                                                              |                |                              |                |    |             | Entities Not |              |   |   |         |         |  |   |         
|                                                                               |                                                              |                | Entities in                  |                | in |             |              |              |   |   |         |         | 
|Statements of Operations                                                       |                                                              | Reorganization |                              | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                              |                |                              |                |    |             |              |             
|Revenue                                                                        |                                                              | $              |                             |                |    | $           | 226.8        |              |   | $ |        |         |  | $ | 226.8    |         
|Costs and expenses                                                             |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|Operating expenses (exclusive of
depreciation shown separately below)          |                                                              |                |                             |                |    |             | 88.9         |              |   |   |        |         |  |   | 88.9     |         
|Selling, general and administrative expenses                                   |                                                              |                |                             |                |    |             | 103.1        |              |   |   |        |         |  |   | 103.1    |         
|Asset impairments                                                              |                                                              |                |                             |                |    |             |             |              |   |   |        |         |  |   |         |         
|Other charges                                                                  |                                                              |                |                             |                |    |             |             |              |   |   |        |         |  |   |         |         
|Corporate expenses                                                             |                                                              |                | 23.9                         |                |    |             | (0.1         | )            |   |   |        |         |  |   | 23.8     |         
|Depreciation                                                                   |                                                              |                | 2.3                          |                |    |             | 99.3         |              |   |   | (14.2   | )       |  |   | 87.4     |         
|Amortization                                                                   |                                                              |                | 2.7                          |                |    |             | 282.0        |              |   |   | 14.6    |         |  |   | 299.3    |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                               |                                                              |                | 28.9                         |                |    |             | 573.2        |              |   |   | 0.4     |         |  |   | 602.5    |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|Operating loss                                                                 |                                                              |                | (28.9                        | )              |    |             | (346.4       | )            |   |   | (0.4    | )       |  |   | (375.7   | )       
|Other income (expense)                                                         |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|Interest income and other, net                                                 |                                                              |                | 40.0                         |                |    |             | (2.5         | )            |   |   | 8.0     |         |  |   | 45.5     |         
|Interest expense                                                               |                                                              |                | (68.6                        | )              |    |             | (84.0        | )            |   |   | 12.9    |         |  |   | (139.7   | )       
|Share of (losses) from equity investments                                      |                                                              |                | (997.4                       | )              |    |             |             |              |   |   | 950.7   |         |  |   | (46.7    | )       
|Other gains (losses)                                                           |                                                              |                |                             |                |    |             |             |              |   |   |        |         |  |   |         |         
|Foreign currency transaction gains                                             |                                                              |                | (61.1                        | )              |    |             |             |              |   |   | (1.4    | )       |  |   | (62.5    | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                              |                | (1,116.0                     | )              |    |             | (432.9       | )            |   |   | 969.8   |         |  |   | (579.1   | )       
|Recapitalization items, net                                                    |                                                              |                |                             |                |    |             |             |              |   |   |        |         |  |   |         |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) before income taxes and discontinued operations                         |                                                              |                | (1,116.0                     | )              |    |             | (432.9       | )            |   |   | 969.8   |         |  |   | (579.1   | )       
|Income tax (expense) benefit                                                   |                                                              |                | 0.3                          |                |    |             | 23.2         |              |   |   | (0.6    | )       |  |   | 22.9     |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) from continuing operations                                              |                                                              |                | (1,115.7                     | )              |    |             | (409.7       | )            |   |   | 969.2   |         |  |   | (556.2   | )       
|Discontinued operations:                                                       |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                               | (Loss) from discontinued operations, net of taxes            |                |                              | (7,643.9       | )  |             |              | (1,868.8     | ) |   |         | 7,105.2 |  |   |          | (2,407.5 | )
|                                                                               | (Loss) gain on sale of discontinued operations,
net of taxes |                |                              |               |    |             |              |             |   |   |         |        |  |   |          |         |  
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) from discontinued operations                                            |                                                              |                | (7,643.9                     | )              |    |             | (1,868.8     | )            |   |   | 7,105.2 |         |  |   | (2,407.5 | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         
|Net (loss)                                                                     |                                                              | $              | (8,759.6                     | )              |    | $           | (2,278.5     | )            |   | $ | 8,074.4 |         |  | $ | (2,963.7 | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |  |   |          |         

F-52



---



##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|------------------------------------------------ |  | ----------------- | -------- | -------------- |  | ------------ | -------- | ------------ |  | - | --------- | - |  | - | -------- | -
|                                                 |  | December 31, 2002
|                                                 |  |                  
|                                                 |  |                   |          |                |  | Entities Not |          |              |  |   |           |   |  |  
|                                                 |  | Entities in       |          | in             |  |              |          |              |  |   |           |  
|Balance Sheets                                   |  | Reorganization    |          | Reorganization |  | Adjustments  |          | Consolidated
|                                                 |  |                   |          |                |  |              |          |             
|Current assets                                   |  | $                 | 241.4    |                |  | $            | 386.7    |              |  | $ | (39.6     | ) |  | $ | 588.5    |  
|Discontinued operations                          |  |                   | 809.6    |                |  |              | 12,692.6 |              |  |   | (534.1    | ) |  |   | 12,968.1 |  
|Investments in and loans to affiliates, net      |  |                   | 23,001.2 |                |  |              | 16.1     |              |  |   | (23,004.3 | ) |  |   | 13.0     |  
|Fixed and noncurrent assets                      |  |                   | 67.5     |                |  |              | 2,213.5  |              |  |   | (1.2      | ) |  |   | 2,279.8  |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|Total assets                                     |  | $                 | 24,119.7 |                |  | $            | 15,308.9 |              |  | $ | (23,579.2 | ) |  | $ | 15,849.4 |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|Current liabilities                              |  | $                 | 12.2     |                |  | $            | 5,399.9  |              |  | $ | (2,271.9  | ) |  | $ | 3,140.2  |  
|Discontinued operations                          |  |                   | 13,331.4 |                |  |              | 14,764.0 |              |  |   | (10,139.2 | ) |  |   | 17,956.2 |  
|Noncurrent liabilities                           |  |                   | 12,838.0 |                |  |              | 356.3    |              |  |   | (12,835.6 | ) |  |   | 358.7    |  
|Liabilities subject to compromise                |  |                   | 4,310.4  |                |  |              |         |              |  |   | (16.3     | ) |  |   | 4,294.1  |  
|Shareholders (deficiency)                       |  |                   | (6,372.3 | )              |  |              | (5,211.3 | )            |  |   | 1,683.8   |   |  |   | (9,899.8 | )
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|Total liabilities and shareholders (deficiency) |  | $                 | 24,119.7 |                |  | $            | 15,308.9 |              |  | $ | (23,579.2 | ) |  | $ | 15,849.4 |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  

|                                                 |  |                   |           |                |  |              |          |              |  |   |          |   |  |   |          |  
|------------------------------------------------ |  | ----------------- | --------- | -------------- |  | ------------ | -------- | ------------ |  | - | -------- | - |  | - | -------- | -
|                                                 |  | December 31, 2001
|                                                 |  |                  
|                                                 |  |                   |           |                |  | Entities Not |          |              |  |   |          |   |  |  
|                                                 |  | Entities in       |           | in             |  |              |          |              |  |   |          |  
|Balance Sheets                                   |  | Reorganization    |           | Reorganization |  | Adjustments  |          | Consolidated
|                                                 |  |                   |           |                |  |              |          |             
|Current assets                                   |  | $                 | 134.3     |                |  | $            | 833.3    |              |  | $ | (477.2   | ) |  | $ | 490.4    |  
|Discontinued operations                          |  |                   | 414.0     |                |  |              | 12,713.6 |              |  |   | 203.4    |   |  |   | 13,331.0 |  
|Investments and loans to affiliates, net         |  |                   | 5,962.3   |                |  |              | 56.9     |              |  |   | (5,751.4 | ) |  |   | 267.8    |  
|Fixed and noncurrent assets                      |  |                   | 78.3      |                |  |              | 2,655.5  |              |  |   | 35.9     |   |  |   | 2,769.7  |  
|                                                 |  |                   |           |                |  |              |          |              |  |   |          |   |  |   |          |  
|Total assets                                     |  | $                 | 6,588.9   |                |  | $            | 16,259.3 |              |  | $ | (5,989.3 | ) |  | $ | 16,858.9 |  
|                                                 |  |                   |           |                |  |              |          |              |  |   |          |   |  |   |          |  
|Current liabilities                              |  | $                 | 186.8     |                |  | $            | 4,802.3  |              |  | $ | (1,108.9 | ) |  | $ | 3,880.2  |  
|Discontinued operations                          |  |                   | 9,598.8   |                |  |              | 12,748.7 |              |  |   | (5,921.3 | ) |  |   | 16,426.2 |  
|Noncurrent liabilities                           |  |                   | 10,670.7  |                |  |              | 272.8    |              |  |   | (7,848.6 | ) |  |   | 3,094.9  |  
|Liabilities subject to compromise                |  |                   |          |                |  |              |         |              |  |   |         |   |  |   |         |  
|Shareholders (deficiency)                       |  |                   | (13,867.4 | )              |  |              | (1,564.5 | )            |  |   | 8,889.5  |   |  |   | (6,542.4 | )
|                                                 |  |                   |           |                |  |              |          |              |  |   |          |   |  |   |          |  
|Total liabilities and shareholders (deficiency) |  | $                 | 6,588.9   |                |  | $            | 16,259.3 |              |  | $ | (5,989.3 | ) |  | $ | 16,858.9 |  
|                                                 |  |                   |           |                |  |              |          |              |  |   |          |   |  |   |          |  

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  
|------------------------------------------------------------------------ |  | ---------------------------- | -------- | -------------- |  | ------------ | ------ | ------------ |  | - | -------- | - |  | - | ------ | -
|                                                                         |  | Year Ended December 31, 2002
|                                                                         |  |                             
|                                                                         |  |                              |          |                |  | Entities Not |        |              |  |   |          |   |  |  
|                                                                         |  | Entities in                  |          | in             |  |              |        |              |  |   |          |  
|Statements of Cash Flows                                                 |  | Reorganization               |          | Reorganization |  | Adjustments  |        | Consolidated
|                                                                         |  |                              |          |                |  |              |        |             
|Net cash provided by (used in) operating activities                      |  | $                            | (4,517.3 | )              |  | $            | 285.4  |              |  | $ | 4,387.0  |   |  | $ | 155.1  |  
|Net cash provided by (used in) investing activities                      |  |                              | 4,317.8  |                |  |              | (826.1 | )            |  |   | (4,084.0 | ) |  |   | (592.3 | )
|Net cash provided by financing activities                                |  |                              | 230.4    |                |  |              | 733.3  |              |  |   | (302.8   | ) |  |   | 660.9  |  
|Effect of exchange rate changes on cash and cash
equivalents             |  |                              |         |                |  |              | 51.2   |              |  |   |         |   |  |   | 51.2   |  
|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  
|Increase in cash and cash equivalents                                    |  |                              | 30.9     |                |  |              | 243.8  |              |  |   | 0.2      |   |  |   | 274.9  |  
|Cash and cash equivalents at beginning of year 
continuing operations   |  |                              | 127.3    |                |  |              | 101.0  |              |  |   |         |   |  |   | 228.3  |  
|Cash and cash equivalents at beginning of year 
discontinued operations |  |                              | 78.9     |                |  |              | 197.4  |              |  |   |         |   |  |   | 276.3  |  
|Cash and cash equivalents at end of year 
discontinued operations       |  |                              | (56.3    | )              |  |              | (445.7 | )            |  |   |         |   |  |   | (502.0 | )
|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  
|Cash and cash equivalents at end of year 
continuing operations         |  | $                            | 180.8    |                |  | $            | 96.5   |              |  | $ | 0.2      |   |  | $ | 277.5  |  
|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  

|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|------------------------------------------------------------------------ |  | ---------------------------- | --------- | -------------- |  | ------------ | -------- | ------------ |  | - | --------- | - |  | - | -------- | -
|                                                                         |  | Year Ended December 31, 2001
|                                                                         |  |                             
|                                                                         |  |                              |           |                |  | Entities Not |          |              |  |   |           |   |  |  
|                                                                         |  | Entities in                  |           | in             |  |              |          |              |  |   |           |  
|Statements of Cash Flows                                                 |  | Reorganization               |           | Reorganization |  | Adjustments  |          | Consolidated
|                                                                         |  |                              |           |                |  |              |          |             
|Net cash provided by (used in) operating activities                      |  | $                            | (24,348.7 | )              |  | $            | 814.1    |              |  | $ | 22,936.8  |   |  | $ | (597.8   | )
|Net cash provided by (used in) investing activities                      |  |                              | 22,332.3  |                |  |              | (2,093.4 | )            |  |   | (22,338.7 | ) |  |   | (2,099.8 | )
|Net cash provided by financing activities                                |  |                              | 1,982.1   |                |  |              | 1,249.8  |              |  |   | (598.0    | ) |  |   | 2,633.9  |  
|Effect of exchange rate changes on cash and cash equivalents             |  |                              |          |                |  |              | (11.1    | )            |  |   |          |   |  |   | (11.1    | )
|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|(Decrease) in cash and cash equivalents                                  |  |                              | (34.3     | )              |  |              | (40.6    | )            |  |   | 0.1       |   |  |   | (74.8    | )
|Cash and cash equivalents at beginning of year  continuing operations   |  |                              | 71.8      |                |  |              | 54.7     |              |  |   | (0.1      | ) |  |   | 126.4    |  
|Cash and cash equivalents at beginning of year  discontinued operations |  |                              | 168.7     |                |  |              | 284.3    |              |  |   |          |   |  |   | 453.0    |  
|Cash and cash equivalents at end of year  discontinued operations       |  |                              | (78.9     | )              |  |              | (197.4   | )            |  |   |          |   |  |   | (276.3   | )
|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|Cash and cash equivalents at end of year 
continuing operations         |  | $                            | 127.3     |                |  | $            | 101.0    |              |  | $ |          |   |  | $ | 228.3    |  
|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |          |  

F-54



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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |           |  
|------------------------------------------------------------------------ |  | ---------------------------- | --------- | -------------- |  | ------------ | -------- | ------------ |  | - | --------- | - |  | - | --------- | -
|                                                                         |  | Year Ended December 31, 2000
|                                                                         |  |                             
|                                                                         |  |                              |           |                |  | Entities Not |          |              |  |   |           |   |  |  
|                                                                         |  | Entities in                  |           | in             |  |              |          |              |  |   |           |  
|Statements of Cash Flows                                                 |  | Reorganization               |           | Reorganization |  | Adjustments  |          | Consolidated
|                                                                         |  |                              |           |                |  |              |          |             
|Net cash provided by (used in) operating activities                      |  | $                            | (5,323.1  | )              |  | $            | 1,049.4  |              |  | $ | 3,983.5   |   |  | $ | (290.2    | )
|Net cash provided by (used in) investing activities                      |  |                              | (12,922.0 | )              |  |              | (7,159.6 | )            |  |   | 6,653.4   |   |  |   | (13,428.2 | )
|Net cash provided by financing activities                                |  |                              | 16,096.1  |                |  |              | 6,269.2  |              |  |   | (10,636.9 | ) |  |   | 11,728.4  |  
|Effect of exchange rate changes on cash and cash
equivalents             |  |                              | (12.2     | )              |  |              | (15.8    | )            |  |   | 0.2       |   |  |   | (27.8     | )
|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |           |  
|Increase (decrease) in cash and cash equivalents                         |  |                              | (2,161.2  | )              |  |              | 143.2    |              |  |   | 0.2       |   |  |   | (2,017.8  | )
|Cash and cash equivalents at beginning of year 
continuing operations   |  |                              | 1,501.4   |                |  |              | 9.1      |              |  |   | (0.3      | ) |  |   | 1,510.2   |  
|Cash and cash equivalents at beginning of year 
discontinued operations |  |                              | 900.3     |                |  |              | 186.7    |              |  |   |          |   |  |   | 1,087.0   |  
|Cash and cash equivalents at end of year 
discontinued operations       |  |                              | (168.7    | )              |  |              | (284.3   | )            |  |   |          |   |  |   | (453.0    | )
|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |           |  
|Cash and cash equivalents at end of year 
continuing operations         |  | $                            | 71.8      |                |  | $            | 54.7     |              |  | $ | (0.1      | ) |  | $ | 126.4     |  
|                                                                         |  |                              |           |                |  |              |          |              |  |   |           |   |  |   |           |  

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

25. Quarterly Financial Information (Unaudited)

The following is a summary of the quarterly results of operations for the years ended December 31, 2002 and 2001.

|                                            |                                     |   |                    |       |          |   |               |       |              |   |        |       |   |   |          |       |   |   |          |        |  
|------------------------------------------- | ----------------------------------- | - | ------------------ | ----- | -------- | - | ------------- | ----- | ------------ | - | ------ | ----- | - | - | -------- | ----- | - | - | -------- | ------ | -
|                                            |                                     |   | (in millions)     
|                                            |                                     |   |                   
|                                            |                                     |   | 2002(1,2)         
|                                            |                                     |   |                   
|                                            |                                     |   | Three Months Ended |       |          |   |              
|                                            |                                     |   |                    |       |          |   |              
|                                            |                                     |   | March 31,          |       | June 30, |   | September 30, |       | December 31, |   | Total 
|                                            |                                     |   |                    |       |          |   |               |       |              |   |       
|Revenues                                    |                                     | $ | 88.6               |       |          | $ | 100.2         |       |              | $ | 109.7  |       |   | $ | 137.4    |       |   | $ | 435.9    |       
|Operating (loss)                            |                                     |   | (61.4              | )     |          |   | (83.8         | )     |              |   | (64.1  | )     |   |   | (856.5   | )     |   |   | (1,065.8 | )     
|(Loss) from continuing operations           |                                     |   | (135.4             | )     |          |   | (147.7        | )     |              |   | (152.9 | )     |   |   | (912.6   | )     |   |   | (1,348.6 | )     
|(Loss) from discontinued operations         |                                     |   | (470.5             | )     |          |   | (408.4        | )     |              |   | (295.9 | )     |   |   | (931.5   | )     |   |   | (2,106.3 | )     
|Net (loss)                                  |                                     |   | (605.9             | )     |          |   | (556.1        | )     |              |   | (448.8 | )     |   |   | (1,844.1 | )     |   |   | (3,454.9 | )     
|Preferred stock dividends                   |                                     |   | (98.4              | )     |          |   | (43.5         | )     |              |   | (1.6   | )     |   |   | (1.6     | )     |   |   | (145.1   | )     
|Net (loss) available to common
shareholders |                                     |   | (704.3             | )     |          |   | (599.6        | )     |              |   | (450.4 | )     |   |   | (1,845.7 | )     |   |   | (3,600.0 | )     
|Basic and diluted net loss per share:       |                                     |   |                    |       |          |   |               |       |              |   |        |       |   |   |          |       |   |   |          |       
|                                            | (Loss) from continuing operations   |   | $                  | (0.85 | )        |   | $             | (0.69 | )            |   | $      | (0.56 | ) |   | $        | (3.30 | ) |   | $        | (5.40  | )
|                                            | (Loss) from discontinued operations |   |                    | (1.70 | )        |   |               | (1.48 | )            |   |        | (1.07 | ) |   |          | (3.37 | ) |   |          | (7.62  | )
|                                            |                                     |   |                    |       |          |   |               |       |              |   |        |       |   |   |          |       |   |   |          |       
|                                            | Net (loss) per common share         |   | $                  | (2.55 | )        |   | $             | (2.17 | )            |   | $      | (1.63 | ) |   | $        | (6.67 | ) |   | $        | (13.02 | )
|                                            |                                     |   |                    |       |          |   |               |       |              |   |        |       |   |   |          |       |   |   |          |       
|Weighted average shares                     |                                     |   | 276.6              |       |          |   | 276.6         |       |              |   | 276.6  |       |   |   | 276.6    |       |   |   | 276.6    |       

|                                            |                                     |   |                    |       |          |   |               |       |              |   |          |       |   |   |           |        |   |   |           |        |  
|------------------------------------------- | ----------------------------------- | - | ------------------ | ----- | -------- | - | ------------- | ----- | ------------ | - | -------- | ----- | - | - | --------- | ------ | - | - | --------- | ------ | -
|                                            |                                     |   | (in millions)     
|                                            |                                     |   |                   
|                                            |                                     |   | 2001(1,3)         
|                                            |                                     |   |                   
|                                            |                                     |   | Three Months Ended |       |          |   |              
|                                            |                                     |   |                    |       |          |   |              
|                                            |                                     |   | March 31,          |       | June 30, |   | September 30, |       | December 31, |   | Total   
|                                            |                                     |   |                    |       |          |   |               |       |              |   |         
|Revenues                                    |                                     | $ | 93.1               |       |          | $ | 92.8          |       |              | $ | 79.4     |       |   | $ | 126.3     |        |   | $ | 391.6     |       
|Operating (loss)                            |                                     |   | (124.1             | )     |          |   | (137.6        | )     |              |   | (139.8   | )     |   |   | (1,109.9  | )      |   |   | (1,511.4  | )     
|(Loss) from continuing operations           |                                     |   | (205.8             | )     |          |   | (227.4        | )     |              |   | (220.4   | )     |   |   | (1,714.8  | )      |   |   | (2,368.4  | )     
|(Loss) from discontinued operations         |                                     |   | (837.1             | )     |          |   | (801.8        | )     |              |   | (811.1   | )     |   |   | (9,422.9  | )      |   |   | (11,872.9 | )     
|Net (loss)                                  |                                     |   | (1,042.9           | )     |          |   | (1,029.2      | )     |              |   | (1,031.5 | )     |   |   | (11,137.7 | )      |   |   | (14,241.3 | )     
|Preferred stock dividends                   |                                     |   | (65.1              | )     |          |   | (75.8         | )     |              |   | (88.7    | )     |   |   | (96.1     | )      |   |   | (325.7    | )     
|Net (loss) available to common
shareholders |                                     |   | (1,108.0           | )     |          |   | (1,105.0      | )     |              |   | (1,120.2 | )     |   |   | (11,233.8 | )      |   |   | (14,567.0 | )     
|Basic and diluted net loss per share:       |                                     |   |                    |       |          |   |               |       |              |   |          |       |   |   |           |        |   |   |           |       
|                                            | (Loss) from continuing operations   |   | $                  | (0.99 | )        |   | $             | (1.10 | )            |   | $        | (1.11 | ) |   | $         | (6.56  | ) |   | $         | (9.76  | )
|                                            | (Loss) from discontinued operations |   |                    | (3.05 | )        |   |               | (2.90 | )            |   |          | (2.93 | ) |   |           | (34.14 | ) |   |           | (43.02 | )
|                                            |                                     |   |                    |       |          |   |               |       |              |   |          |       |   |   |           |        |   |   |           |       
|                                            | Net (loss) per common share         |   | $                  | (4.04 | )        |   | $             | (4.00 | )            |   | $        | (4.04 | ) |   | $         | (40.70 | ) |   | $         | (52.78 | )
|                                            |                                     |   |                    |       |          |   |               |       |              |   |          |       |   |   |           |        |   |   |           |       
|Weighted average shares                     |                                     |   | 274.5              |       |          |   | 276.3         |       |              |   | 276.5    |       |   |   | 276.6     |        |   |   | 276.0     |       



|(1) |  | As more fully described in Notes 1, 2 and 3 to the Consolidated Financial
Statements, on May 8, 2002, Old NTL filed the Plan which became effective on
January 10, 2003. Under the terms of the Plan, the operations of New NTL have
been accounted for as a discontinued operation of the Company, beginning with
the quarter ended September 30, 2002 and, accordingly, its operating results
have been excluded from the Companys results from continuing operations for
the periods presented. In addition, the operating results for NTL Australia
and Rediffusion also qualified for discontinued operations treatment (because
both units were sold during the current year) for all periods presented.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | During the fourth quarter of 2002, the Company recorded an asset
impairment charge of $838.8 million, which was associated with a goodwill
impairment provision at Cablecom. The fourth quarter loss in 2002 from
discontinued operations also included an asset impairment charge of $418.5
million and a restructuring charge of $99.2 million relating to the operations
of New NTL.                                                                                                                                                                                                                                                                                                                        

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|(3) |  | During the fourth quarter of 2001, the Company recorded an asset
impairment charge of $912.1 million, which was associated with a goodwill
impairment provision at Cablecom and the write-down of various long-term assets
at Premium TV. The fourth quarter loss in 2001 from discontinued operations
also included an asset impairment charge of $8,161.6 million and a
restructuring charge of $202.8 million relating to the operations of New NTL.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant
Condensed Balance Sheets
(dollars in millions)

|                                                                                         |                                        |   |              |           |      |   |          |           |  
|---------------------------------------------------------------------------------------- | -------------------------------------- | - | ------------ | --------- | ---- | - | -------- | --------- | -
|                                                                                         |                                        |   | December 31,
|                                                                                         |                                        |   |             
|                                                                                         |                                        |   | 2002         |           | 2001
|                                                                                         |                                        |   |              |           |     
|Assets                                                                                   |                                        |   |              |           |      |   |          |          
|Current assets:                                                                          |                                        |   |              |           |      |   |          |          
|                                                                                         | Cash and cash equivalents              |   | $            | 70.4      |      |   | $        | 124.3     |  
|                                                                                         | Marketable securities                  |   |              | 4.3       |      |   |          |          |  
|                                                                                         | Other                                  |   |              | 0.4       |      |   |          | 0.5       |  
|                                                                                         |                                        |   |              |           |      |   |          |           |  
|Total current assets                                                                     |                                        |   | 75.1         |           |      |   | 124.8    |          
|Deferred financing costs, net of accumulated
amortization of $0.7 (2002) and $0.3 (2001) |                                        |   | 3.5          |           |      |   | 3.9      |          
|Note receivable from CoreComm Limited, net of allowance of $17.6 (2002)
and $7.0 (2001)  |                                        |   |             |           |      |   | 9.2      |          
|Other assets                                                                             |                                        |   |             |           |      |   | 0.5      |          
|                                                                                         |                                        |   |              |           |      |   |          |          
|Total assets                                                                             |                                        | $ | 78.6         |           |      | $ | 138.4    |          
|                                                                                         |                                        |   |              |           |      |   |          |          
|Liabilities and shareholders (deficiency)                                               |                                        |   |              |           |      |   |          |          
|Liabilities not subject to compromise                                                    |                                        |   |              |           |      |   |          |          
|Current liabilities                                                                      |                                        | $ | 2.7          |           |      | $ | 148.1    |          
|Liabilities subject to compromise                                                        |                                        |   | 3,066.7      |           |      |   |         |          
|Investments in and loans to discontinued operations                                      |                                        |   | 4,986.1      |           |      |   | 3,095.2  |          
|Investments in and loans to affiliates, net                                              |                                        |   | 1,922.9      |           |      |   | 663.8    |          
|Long-term debt                                                                           |                                        |   |             |           |      |   |         |          
|Redeemable preferred stock                                                               |                                        |   |             |           |      |   | 2,773.7  |          
|Shareholders (deficiency):                                                              |                                        |   |              |           |      |   |          |          
|                                                                                         | Common stock                           |   |              | 2.8       |      |   |          | 2.8       |  
|                                                                                         | Additional paid-in capital             |   |              | 13,574.9  |      |   |          | 13,720.0  |  
|                                                                                         | Accumulated other comprehensive (loss) |   |              | (830.2    | )    |   |          | (1,072.8  | )
|                                                                                         | (Deficit)                              |   |              | (22,647.3 | )    |   |          | (19,192.4 | )
|                                                                                         |                                        |   |              |           |      |   |          |          
|                                                                                         |                                        |   | (9,899.8     | )         |      |   | (6,542.4 | )        
|                                                                                         |                                        |   |              |           |      |   |          |          
|Total liabilities and shareholders (deficiency)                                         |                                        | $ | 78.6         |           |      | $ | 138.4    |          
|                                                                                         |                                        |   |              |           |      |   |          |          

See accompanying notes.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Condensed Statements of Operations
(dollars in millions)

|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |          |  
|--------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | - | ----------------------- | -------- | ---- | - | --------- | --------- | - | - | -------- | -------- | -
|                                                                                                                            |                                                                                                                |   | Year Ended December 31,
|                                                                                                                            |                                                                                                                |   |                        
|                                                                                                                            |                                                                                                                |   | 2002                    |          | 2001 |   | 2000     
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |          
|Cost and expenses                                                                                                           |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Corporate expenses                                                                                                          |                                                                                                                | $ | 11.1                    |          |      | $ | 29.4      |           |   | $ | 9.4      |         
|Amortization                                                                                                                |                                                                                                                |   | 0.4                     |          |      |   | 0.3       |           |   |   |         |         
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Operating (loss)                                                                                                            |                                                                                                                |   | (11.5                   | )        |      |   | (29.7     | )         |   |   | (9.4     | )       
|Other income (expense)                                                                                                      |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Interest income and other, net                                                                                              |                                                                                                                |   | (7.8                    | )        |      |   | 4.7       |           |   |   | 10.9     |         
|Interest expense (contractual interest of $25.3 (2002))                                                                     |                                                                                                                |   | (3.8                    | )        |      |   | (5.3      | )         |   |   |         |         
|Foreign currency transaction gains (losses)                                                                                 |                                                                                                                |   | 0.2                     |          |      |   | (0.4      | )         |   |   | 1.9      |         
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) income before recapitalization items, income taxes,
equity in net (loss) of subsidiaries and discontinued operations |                                                                                                                |   | (22.9                   | )        |      |   | (30.7     | )         |   |   | 3.4      |         
|Recapitalization items, net                                                                                                 |                                                                                                                |   | 6.6                     |          |      |   |          |           |   |   |         |         
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) income before income taxes, equity in net (loss) of
subsidiaries and discontinued operations                         |                                                                                                                |   | (16.3                   | )        |      |   | (30.7     | )         |   |   | 3.4      |         
|Income tax (expense) benefit                                                                                                |                                                                                                                |   | (1.3                    | )        |      |   |          |           |   |   | 0.3      |         
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) income before equity in net (loss) of subsidiaries                                                                   |                                                                                                                |   | (17.6                   | )        |      |   | (30.7     | )         |   |   | 3.7      |         
|Equity in net (loss) of subsidiaries                                                                                        |                                                                                                                |   | (1,331.0                | )        |      |   | (2,337.7  | )         |   |   | (559.9   | )       
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) from continuing operations                                                                                           |                                                                                                                |   | (1,348.6                | )        |      |   | (2,368.4  | )         |   |   | (556.2   | )       
|Discontinued operations:                                                                                                    |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|                                                                                                                            | (Loss) from discontinued operations, net of income tax
benefit of $26.3 (2002), $114.1 (2001) and $88.1 (2000) |   |                         | (2,100.6 | )    |   |           | (11,872.9 | ) |   |          | (2,407.5 | )
|                                                                                                                            | Net (loss) on sales of discontinued operations, net of income
tax expense of $4.6 (2002)                       |   |                         | (5.7     | )    |   |           |          |   |   |          |         |  
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) from discontinued operations                                                                                         |                                                                                                                |   | (2,106.3                | )        |      |   | (11,872.9 | )         |   |   | (2,407.5 | )       
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Net (loss)                                                                                                                  |                                                                                                                |   | (3,454.9                | )        |      |   | (14,241.3 | )         |   |   | (2,963.7 | )       
|Preferred stock dividends (contractual dividends of $370.6 (2002))                                                          |                                                                                                                |   | (145.1                  | )        |      |   | (325.7    | )         |   |   | (194.0   | )       
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Net (loss) available to common shareholders                                                                                 |                                                                                                                | $ | (3,600.0                | )        |      | $ | (14,567.0 | )         |   | $ | (3,157.7 | )       
|                                                                                                                            |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         

See accompanying notes.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Condensed Statements of Cash Flows
(dollars in millions)

|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|---------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                                 |  | Year Ended December 31,
|                                                                 |  |                        
|                                                                 |  | 2002                    |          | 2001 |  | 2000
|                                                                 |  |                         |          |      |  |     
|Net cash (used in) operating activities                          |  | $                       | (2,109.0 | )    |  | $    | (11,873.3 | ) |  | $ | (2,407.3 | )
|Investing activities                                             |  |                         |          |      |  |      |           |   |  |   |          |  
|Purchase of marketable securities                                |  |                         | (29.4    | )    |  |      |          |   |  |   | (96.9    | )
|Proceeds from sales of marketable securities                     |  |                         | 25.2     |      |  |      | 60.3      |   |  |   | 202.6    |  
|Investments in and loans to affiliates                           |  |                         | (91.2    | )    |  |      | (200.6    | ) |  |   | 2,466.8  |  
|(Increase) decrease in other assets                              |  |                         | (1.8     | )    |  |      | 0.1       |   |  |   |         |  
|Due from CoreComm Limited                                        |  |                         |         |      |  |      | (15.0     | ) |  |   |         |  
|Distribution to NTL (Delaware), Inc.                             |  |                         |         |      |  |      |          |   |  |   | (4.3     | )
|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash (used in) provided by continuing operations             |  |                         | (97.2    | )    |  |      | (155.2    | ) |  |   | 2,568.2  |  
|Net cash provided by (used in) discontinued operations           |  |                         | 2,152.3  |      |  |      | 11,974.7  |   |  |   | (4,288.1 | )
|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash provided by (used in) investing activities              |  |                         | 2,055.1  |      |  |      | 11,819.5  |   |  |   | (1,719.9 | )
|Financing activities                                             |  |                         |          |      |  |      |           |   |  |   |          |  
|Proceeds from borrowings, net of financing costs                 |  |                         |         |      |  |      | 95.9      |   |  |   |         |  
|Proceeds from issuance of common stock                           |  |                         |         |      |  |      | 13.0      |   |  |   | 2,327.6  |  
|Proceeds from exercise of stock options and warrants             |  |                         |         |      |  |      |          |   |  |   | 6.8      |  
|Proceeds from issuance of preferred stock                        |  |                         |         |      |  |      |          |   |  |   | 1,862.0  |  
|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash provided by continuing operations                       |  |                         |         |      |  |      | 108.9     |   |  |   | 4,196.4  |  
|Net cash provided by discontinued operations                     |  |                         |         |      |  |      |          |   |  |   |         |  
|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash provided by financing activities                        |  |                         |         |      |  |      | 108.9     |   |  |   | 4,196.4  |  
|(Decrease) increase in cash and cash equivalents                 |  |                         | (53.9    | )    |  |      | 55.1      |   |  |   | 69.2     |  
|Cash and cash equivalents at beginning of year                   |  |                         | 124.3    |      |  |      | 69.2      |   |  |   |         |  
|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Cash and cash equivalents at end of year                         |  | $                       | 70.4     |      |  | $    | 124.3     |   |  | $ | 69.2     |  
|                                                                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Supplemental disclosure of cash flow information                 |  |                         |          |      |  |      |           |   |  |   |          |  
|Cash paid for interest                                           |  | $                       | 2.5      |      |  | $    | 3.1       |   |  | $ |         |  
|Supplemental schedule of non-cash financing activities           |  |                         |          |      |  |      |           |   |  |   |          |  
|Accretion of dividends and discount on preferred stock           |  | $                       | 145.1    |      |  | $    | 220.8     |   |  | $ | 78.1     |  
|Conversion of notes, net of unamortized deferred financing
Costs |  |                         |         |      |  |      | 128.3     |   |  |   |         |  
|Common stock issued for acquisitions                             |  |                         |         |      |  |      | 4.3       |   |  |   |         |  
|Redeemable preferred stock issued for investment in affiliates   |  |                         |         |      |  |      | 518.0     |   |  |   |         |  
|Conversion of series preferred stock                             |  |                         |         |      |  |      |          |   |  |   | 7.6      |  

See accompanying notes.

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Notes to Condensed Financial Statements

1. Corporate Restructuring

The accompanying financial statements do not reflect any adjustments in
connection with the emergence of NTL Europe, Inc. (NTL Europe or the
Company) from Chapter 11 reorganization.

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

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

Historical Structure of the Company

On May 18, 2000, the entity formerly known as NTL Incorporated (currently
named NTL (Delaware), Inc. (NTL Delaware)) completed a corporate
restructuring to create a holding company structure. The formation of the
holding company was part of NTL Delaware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 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 was called NTL Incorporated (which is now known as NTL
Europe, Inc.) and the holding companys subsidiary simultaneously changed its
name to NTL (Delaware), Inc.

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

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.

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Notes to Condensed Financial Statements

3. Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

|                            |                   |                                                    |                                       |       |         |               |         | 
|--------------------------- | ----------------- | -------------------------------------------------- | ------------------------------------- | ----- | ------- | ------------- | ------- | 
|                            |                   |                                                    |                                       |       |         | December 31, 
|                            |                   |                                                    |                                       |       |         | 2002         
|                            |                   |                                                    |                                       |       |         |              
|                            |                   |                                                    |                                       |       |         | (in millions)
|Accounts payable            |                   | $                                                  | 0.3                                   |      
|Interest payable            |                   |                                                    | 3.2                                   |      
|Dividends payable           |                   |                                                    | 109.9                                 |      
|Redeemable preferred stock: |                   |                                                    |                                       |      
|                            |                   | Cumulative Convertible Preferred Stock             |                                       |       | 2,077.3 |              
|                            |                   | Variable Coupon Redeemable Preferred Stock         |                                       |       | 484.2   |              
|                            |                   | 6.5% Redeemable Preferred Stock                    |                                       |       | 98.4    |              
|                            |                   | 13% Senior Redeemable Exchangeable Preferred Stock |                                       |       | 193.4   |              
|Long term debt:             |                   |                                                    |                                       |      
|                            | NTL Europe, Inc.: |                                                    |                                       |       |        
|                            |                   |                                                    | 5 3/4% Convertible Subordinated Notes |       |         | 100.0         |        
|                            |                   |                                                    |                                       |      
|                            |                   |                                                    |                                       | Total |         | $             | 3,066.7 | 
|                            |                   |                                                    |                                       |      

Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
all of the outstanding preferred stock of Old NTL and long-term debt of Old NTL
were canceled.

4. Redeemable Preferred Stock

All of Old NTLs redeemable preferred stock was canceled on the Effective Date
pursuant to the Plan.

Dividends on the Cumulative Convertible Preferred Stock, Series A (Convertible
Preferred Stock) were payable quarterly in additional shares of Convertible
Preferred Stock, at the following quarterly dividend rates: (i) from September
12, 2001 through March 26, 2002, $13.44 per share, (ii) from March 27, 2002
through March 26, 2003, $21.23 per share and (iii) from March 27, 2003 through
March 26, 2004, $26.61 per share. In March 2002, Old NTL elected to delay the
conversion of the Convertible Preferred Stock until at least March 27, 2003.
The Convertible Preferred Stock had a stated value and liquidation preference
of $1,075.17 per share and was mandatorily redeemable for cash by Old NTL on
March 27, 2009. Holders of Convertible Preferred Stock other than any
commercial bank or their affiliates had the option to elect, subject to some
conditions, to exchange their Convertible Preferred Stock for up to a 50%
interest in an entity holding Old NTLs Swiss operations.

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

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##### Table of Contents



NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Notes to Condensed Financial Statements

4. Redeemable Preferred Stock (continued)

Dividends on the 6.5% Fixed Coupon Redeemable Preferred Stock, Series A (6.5%
Redeemable Preferred Stock) were cumulative and were payable at a rate of 6.5%
per annum in cash upon redemption. The 6.5% Redeemable Preferred Stock had a
stated value and liquidation preference of $10,000 per share and was
mandatorily redeemable for cash by Old NTL on May 18, 2007.

Dividends on the 13% Senior Redeemable Exchangeable Preferred Stock (the
Redeemable Preferred Stock) accrued at 13% per annum ($130 per share) and
were payable quarterly in arrears. Dividends accruing on or prior to February
15, 2004 may, at the option of Old NTL, be paid in cash, by the issuance of
additional Redeemable Preferred Stock or in any combination of the foregoing.
The Redeemable Preferred Stock was redeemable, at Old NTL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 declined annually
to 100% in 2005, in each case together with accrued and unpaid dividends to the
redemption date. The Redeemable Preferred Stock was subject to mandatory
redemption on February 15, 2009.

5. Note Payable to NTL Incorporated

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

6. Other

No cash dividends were paid to Old NTL by subsidiaries for the years ended
December 31, 2002 and 2001 and during the period from May 18, 2000 to December
31, 2000.

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

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NTL Europe, Inc. (formerly NTL Incorporated) (Debtor-in-Possession)
Schedule II  Valuation and Qualifying Accounts

|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |      | 
|---------------------------- | ------------------------------- | ------ | ---------- | -------- | --------- | -------- | --------- | -------- | ------------ | --------- | ------- | - |  |  | - | ----- | ---- |  | - | ---- | 
|Col. A                       |                                 | Col. B |            | Col. C   |           | Col. D   |           | Col. E  
|                             |                                 |        |            |          |           |          |           |         
|                             |                                 |        |            |          |           |          | Additions |          |              |           |         |   |  |  |  
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |  
|                             |                                 |        |            |          |           |          |           |          |              |           | (2)     |   |  |  |   |       |      |  |  
|                             |                                 |        |            |          |           |          | (1)       |          | Charged      |           |         |   |  |  |   |       |     
|                             |                                 |        | Balance at |          | Charged   |          | to        |          |              |           |         |   |  |  |  
|                             |                                 |        | Beginning  |          | to        |          | Other     |          | (Deductions) |           | Balance
|                             |                                 |        | of         |          | Costs and |          | Accounts  |          | /Additions   |           | at End 
|Description                  |                                 | Period |            | Expenses |           | Describe |           | Describe |              | of Period
|                             |                                 |        |            |          |           |          |           |          |              |          
|Year ended December 31, 2002 |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|                             | Allowance for doubtful accounts |        | $          | 6.6      |           |          | $         | 7.2      |              |           | $       |  |  |  | $ | (4.4  | )(a) |  | $ | 9.4  | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|                             | Allowance for loans receivable  |        | $          | 37.2     |           |          | $         | 21.0     |              |           | $       |  |  |  | $ | (40.6 | )(b) |  | $ | 17.6 | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|Year ended December 31, 2001 |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|                             | Allowance for doubtful accounts |        | $          | 6.2      |           |          | $         | 2.5      |              |           | $       |  |  |  | $ | (2.1  | )(c) |  | $ | 6.6  | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|                             | Allowance for loans receivable  |        | $          |         |           |          | $         | 37.2     |              |           | $       |  |  |  | $ |      |      |  | $ | 37.2 | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|Year ended December 31, 2000 |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     
|                             | Allowance for doubtful accounts |        | $          | 0.7      |           |          | $         | 0.4      |              |           | $       |  |  |  | $ | 5.1   | (d)  |  | $ | 6.2  | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |       |      |  |   |     



|(a) |  | Uncollectible accounts written-off, net of recoveries of $5.9 million,
offset by $1.5 million foreign currency exchange translation adjustments.                                                                                             
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Write off of loan receivable from Football League Joint Venture.                                                                                                                                                                             
|   
|(c) |  | Uncollectible accounts written-off, net of recoveries of $2.0 million and
$0.1 million foreign currency translation adjustments.                                                                                                             
|   
|(d) |  | Recoveries, net of uncollectible accounts written-off of $1.2 million
plus $0.2 million foreign currency exchange translation adjustments and
$3.7 million allowance for doubtful accounts as of acquisition dates of
purchased subsidiaries.

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries

Consolidated Financial Statements and Financial Statement Schedules

[remainder of page intentionally left blank]

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholder
NTL (Delaware), Inc.

We have audited the consolidated balance sheets of NTL (Delaware), Inc. and
Subsidiaries as of December 31, 2002 and 2001, and the related consolidated
statements of operations, shareholders (deficiency) and cash flows for each of
the three years in the period ended December 31, 2002. Our audits also included
the financial statement schedules listed in the Index at Item 15(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
(Delaware), Inc. and Subsidiaries at December 31, 2002 and 2001, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2002, 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.

As discussed in Note 5, the Company changed its method of accounting for
goodwill and other intangibles effective January 1, 2002.

/s/ ERNST & YOUNG LLP

New York, New York
May 28, 2003

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Balance Sheets
(dollars in millions)

|                                                                                  |                                                                                                  |   |              |          |      |   |          |          | 
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | - | ------------ | -------- | ---- | - | -------- | -------- | 
|                                                                                  |                                                                                                  |   | December 31,
|                                                                                  |                                                                                                  |   |             
|                                                                                  |                                                                                                  |   | 2002         |          | 2001
|                                                                                  |                                                                                                  |   |              |          |     
|Assets                                                                            |                                                                                                  |   |              |          |      |   |          |         
|Current assets:                                                                   |                                                                                                  |   |              |          |      |   |          |         
|                                                                                  | Cash and cash equivalents                                                                        |   | $            | 204.9    |      |   | $        | 91.0     | 
|                                                                                  | Marketable securities                                                                            |   |              | 13.1     |      |   |          |         | 
|                                                                                  | Accounts receivable  trade, less allowance for doubtful
accounts of $9.4 (2002) and $6.6 (2001) |   |              | 240.7    |      |   |          | 192.1    | 
|                                                                                  | Affiliate Receivable                                                                             |   |              | 35.1     |      |   |          | 5.5      | 
|                                                                                  | Other                                                                                            |   |              | 48.7     |      |   |          | 66.7     | 
|                                                                                  | Discontinued operations                                                                          |   |              | 12,974.0 |      |   |          | 13,492.6 | 
|                                                                                  |                                                                                                  |   |              |          |      |   |          |         
|Total current assets                                                              |                                                                                                  |   | 13,516.5     |          |      |   | 13,847.9 |         
|Fixed assets, net                                                                 |                                                                                                  |   | 1,681.9      |          |      |   | 1,494.6  |         
|Goodwill                                                                          |                                                                                                  |   | 220.1        |          |      |   | 959.8    |         
|Customer lists, net of accumulated amortization of $171.4 (2002)
and $91.1 (2001) |                                                                                                  |   | 62.8         |          |      |   | 104.1    |         
|Investments in and loans to affiliates, net                                       |                                                                                                  |   | 7.8          |          |      |   | 216.1    |         
|Deferred tax asset                                                                |                                                                                                  |   | 200.9        |          |      |   | 20.4     |         
|Other assets, net of accumulated amortization of
$61.7 (2002) and $24.7 (2001)    |                                                                                                  |   | 117.3        |          |      |   | 175.8    |         
|                                                                                  |                                                                                                  |   |              |          |      |   |          |         
|Total assets                                                                      |                                                                                                  | $ | 15,807.3     |          |      | $ | 16,818.7 |         
|                                                                                  |                                                                                                  |   |              |          |      |   |          |         

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Balance Sheets  continued
(dollars in millions)

|                                                 |                                                                                                        |   |              |           |      |   |          |           |  
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | - | ------------ | --------- | ---- | - | -------- | --------- | -
|                                                 |                                                                                                        |   | December 31,
|                                                 |                                                                                                        |   |             
|                                                 |                                                                                                        |   | 2002         |           | 2001
|                                                 |                                                                                                        |   |              |           |     
|Liabilities and shareholders (deficiency)       |                                                                                                        |   |              |           |      |   |          |          
|Liabilities not subject to compromise            |                                                                                                        |   |              |           |      |   |          |          
|Current liabilities:                             |                                                                                                        |   |              |           |      |   |          |          
|                                                 | Accounts payable                                                                                       |   | $            | 48.3      |      |   | $        | 36.3      |  
|                                                 | Accrued expenses and other                                                                             |   |              | 87.4      |      |   |          | 111.2     |  
|                                                 | Interest payable                                                                                       |   |              | 43.5      |      |   |          | 48.4      |  
|                                                 | Deferred revenue                                                                                       |   |              | 235.6     |      |   |          | 173.2     |  
|                                                 | Affiliate payable                                                                                      |   |              | 7.8       |      |   |          | 34.9      |  
|                                                 | Current portion of long-term debt                                                                      |   |              | 2,719.3   |      |   |          | 3,360.2   |  
|                                                 | Discontinued operations (including liabilities subject to
compromise of $10,157.8)                     |   |              | 17,973.2  |      |   |          | 16,430.6  |  
|                                                 |                                                                                                        |   |              |           |      |   |          |          
|Total current liabilities                        |                                                                                                        |   | 21,115.1     |           |      |   | 20,194.8 |          
|Long-term debt                                   |                                                                                                        |   |             |           |      |   |         |          
|Other                                            |                                                                                                        |   | 164.8        |           |      |   | 123.1    |          
|Deferred income taxes                            |                                                                                                        |   | 231.6        |           |      |   | 164.6    |          
|Commitments and contingent liabilities           |                                                                                                        |   |              |           |      |   |          |          
|Liabilities subject to compromise                |                                                                                                        |   | 1,243.7      |           |      |   |         |          
|Shareholders (deficiency):                      |                                                                                                        |   |              |           |      |   |          |          
|                                                 | Common stock  $.01 par value; authorized 100 shares; issued and outstanding
11 shares (2002 and 2001) |   |              |          |      |   |          |          |  
|                                                 | Additional paid-in capital                                                                             |   |              | 16,193.8  |      |   |          | 16,070.1  |  
|                                                 | Accumulated other comprehensive (loss)                                                                 |   |              | (821.9    | )    |   |          | (1,072.7  | )
|                                                 | (Deficit)                                                                                              |   |              | (22,319.8 | )    |   |          | (18,661.2 | )
|                                                 |                                                                                                        |   |              |           |      |   |          |          
|                                                 |                                                                                                        |   | (6,947.9     | )         |      |   | (3,663.8 | )        
|                                                 |                                                                                                        |   |              |           |      |   |          |          
|Total liabilities and shareholders (deficiency) |                                                                                                        | $ | 15,807.3     |           |      | $ | 16,818.7 |          
|                                                 |                                                                                                        |   |              |           |      |   |          |          

See accompanying notes.

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Operations
(dollars in millions, except per share amounts)

|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |          |  
|------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------- | - | ----------------------- | -------- | ---- | - | --------- | --------- | - | - | -------- | -------- | -
|                                                                               |                                                                                                                |   | Year Ended December 31,
|                                                                               |                                                                                                                |   |                        
|                                                                               |                                                                                                                |   | 2002                    |          | 2001 |   | 2000     
|                                                                               |                                                                                                                |   |                         |          |      |   |          
|Revenues                                                                       |                                                                                                                | $ | 432.2                   |          |      | $ | 387.8     |           |   | $ | 226.8    |         
|Costs and expenses                                                             |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Operating expenses (exclusive of depreciation
shown separately below)          |                                                                                                                |   | 160.2                   |          |      |   | 161.6     |           |   |   | 88.9     |         
|Selling, general and administrative expenses                                   |                                                                                                                |   | 149.8                   |          |      |   | 183.8     |           |   |   | 103.1    |         
|Asset impairments                                                              |                                                                                                                |   | 854.3                   |          |      |   | 485.8     |           |   |   |         |         
|Other charges                                                                  |                                                                                                                |   | 3.5                     |          |      |   | 12.1      |           |   |   |         |         
|Corporate expenses                                                             |                                                                                                                |   | 0.6                     |          |      |   | 12.8      |           |   |   | 14.5     |         
|Depreciation                                                                   |                                                                                                                |   | 222.6                   |          |      |   | 168.0     |           |   |   | 87.4     |         
|Amortization                                                                   |                                                                                                                |   | 95.1                    |          |      |   | 388.0     |           |   |   | 299.3    |         
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|                                                                               |                                                                                                                |   | 1,486.1                 |          |      |   | 1,412.1   |           |   |   | 593.2    |         
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Operating (loss)                                                               |                                                                                                                |   | (1,053.9                | )        |      |   | (1,024.3  | )         |   |   | (366.4   | )       
|Other income (expense)                                                         |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Interest income and other, net                                                 |                                                                                                                |   | (6.3                    | )        |      |   | 22.2      |           |   |   | 34.1     |         
|Interest expense (contractual interest of $198.2 (2002))                       |                                                                                                                |   | (155.7                  | )        |      |   | (189.9    | )         |   |   | (139.7   | )       
|Share of (losses) from equity investments                                      |                                                                                                                |   | (199.2                  | )        |      |   | (619.9    | )         |   |   | (46.3    | )       
|Other gains (losses)                                                           |                                                                                                                |   | 3.0                     |          |      |   | (59.3     | )         |   |   |         |         
|Foreign currency transaction gains (losses)                                    |                                                                                                                |   | 9.0                     |          |      |   | (13.7     | )         |   |   | (64.4    | )       
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) before recapitalization items, income taxes and
discontinued operations |                                                                                                                |   | (1,403.1                | )        |      |   | (1,884.9  | )         |   |   | (582.7   | )       
|Recapitalization items, net                                                    |                                                                                                                |   | (4.8                    | )        |      |   |          |           |   |   |         |         
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) before income taxes and discontinued operations                         |                                                                                                                |   | (1,407.9                | )        |      |   | (1,884.9  | )         |   |   | (582.7   | )       
|Income tax benefit (expense)                                                   |                                                                                                                |   | 129.4                   |          |      |   | 51.0      |           |   |   | 23.2     |         
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) from continuing operations                                              |                                                                                                                |   | (1,278.5                | )        |      |   | (1,833.9  | )         |   |   | (559.5   | )       
|Discontinued operations:                                                       |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|                                                                               | (Loss) from discontinued operations, net of income tax
benefit of $26.3 (2002), $114.1 (2001) and $88.1
(2000) |   |                         | (2,374.4 | )    |   |           | (11,872.9 | ) |   |          | (2,407.5 | )
|                                                                               | Net (loss) on sales of discontinued operations, net of
income tax expense of $4.6 (2002)                       |   |                         | (5.7     | )    |   |           |          |   |   |          |         |  
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|(Loss) from discontinued operations                                            |                                                                                                                |   | (2,380.1                | )        |      |   | (11,872.9 | )         |   |   | (2,407.5 | )       
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         
|Net (loss)                                                                     |                                                                                                                | $ | (3,658.6                | )        |      | $ | (13,706.8 | )         |   | $ | (2,967.0 | )       
|                                                                               |                                                                                                                |   |                         |          |      |   |           |           |   |   |          |         

See accompanying notes.

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Shareholders (Deficiency) Equity
(dollars in millions)

|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |           |  
|--------------------------------------------- | ----- |  | ---------------- | - | -------------- | - | ---------- |  | ------------- |  | ------------ | - | ------ | - | ---- | - |  | - | --------------------- | - |  | - | --------- | --------- | -
|                                              |       |  | Series Preferred |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                      
|                                              |       |  | Stock $.01 Par   |   | Common Stock   |   |            |  |               |  |             
|                                              |       |  | Value            |   | $.01 Par Value |   | Additional |  |              
|                                              |       |  |                  |   |                |   | Paid-In    |  | Comprehensive
|                                              |       |  | Shares           |   | Par            |   | Shares     |  | Par           |  | Capital      |   | (Loss)
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |       
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | (Dollars in millions)
|Balance, December 31, 1999                    |       |  | 1,332,000        |   |                |   |           |  |               |  | 132,416,000  |   |        |   | 1.3  |   |  | $ | 4,125.1               |   |  |   |           |          
|Exercise of stock options                     |       |  |                  |   |                |   |            |  |               |  | 1,775,000    |   |        |   |     |   |  |   | 32.2                  |   |  |   |           |          
|Exercise of warrants                          |       |  |                  |   |                |   |            |  |               |  | 192,000      |   |        |   |     |   |  |   | 5.1                   |   |  |   |           |          
|Conversion of series preferred stock          |       |  | (528,000         | ) |                |   |           |  |               |  | 8,229,000    |   |        |   | 0.1  |   |  |   | (0.1                  | ) |  |   |           |          
|Preferred stock issued for dividends          |       |  | 9,000            |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | 9.4                   |   |  |   |           |          
|Accreted dividends on preferred stock         |       |  | 13,000           |   |                |   |           |  |               |  |              |   |        |   |      |   |  |   | (20.0                 | ) |  |   |           |          
|Accretion of discount on preferred stock      |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | (0.1                  | ) |  |   |           |          
|Contribution from NTL Incorporated            |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | 11,644.1              |   |  |   |           |          
|Corporate restructuring                       |       |  | (826,000         | ) |                |   |           |  |               |  | (142,611,989 | ) |        |   | (1.4 | ) |  |   |                       |   |  |   |           |          
|Comprehensive Loss:                           |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|Net loss for the year ended December 31, 2000 |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  | $ | (2,967.0  | )        
|Currency translation adjustment               |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (432.7    | )        
|Unrealized net losses on investments          |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (14.2     | )        
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|Total                                         |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  | $ | (3,413.9  | )        
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|Balance, December 31, 2000                    |       |  |                 |   |                |   |           |  |               |  | 11           |   |        |   |     |   |  |   | 15,795.7              |   |  |   |           |          
|Contribution from NTL Incorporated, net       |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | 243.8                 |   |  |   |           |          
|Non-cash compensation                         |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | 30.6                  |   |  |   |           |          
|Comprehensive loss:                           |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|Net loss for the year ended December 31, 2001 |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  | $ | (13,706.8 | )        
|Currency translation adjustment               |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (607.6    | )        
|Unrealized net losses on investments          |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (1.1      | )        
|Unrealized net losses on derivatives          |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (15.0     | )        
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|                                              | Total |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | $         | (14,330.5 | )
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|Balance, December 31, 2001                    |       |  |                 |   |                | $ |            |  |               |  | 11           |   |        | $ |      |   |  | $ | 16,070.1              |   |  |   |           |          
|Contribution from NTL Incorporated, net       |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   | 123.7                 |   |  |   |           |          
|Net loss for the year ended December 31, 2002 |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  | $ | (3,658.6  | )        
|Currency translation adjustment               |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | 280.6     |          
|Reclassification adjustment                   |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | 15.3      |          
|Additional minimum pension liability          |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (30.0     | )        
|Unrealized net losses on derivatives          |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | (15.1     | )        
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|                                              | Total |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   | $         | (3,407.8  | )
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          
|Balance, December 31, 2002                    |       |  |                 |   |                | $ |           |  |               |  | 11           |   |        | $ |     |   |  | $ | 16,193.8              |   |  |   |           |          
|                                              |       |  |                  |   |                |   |            |  |               |  |              |   |        |   |      |   |  |   |                       |   |  |   |           |          

See accompanying notes.

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Shareholders (Deficiency) Equity
(dollars in millions)

|                                              |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |   | 
|--------------------------------------------- | ----- | - | -------------------------------------- | - | ----------- | - | ----------- | - | ---------- | - | --------- | - |  | - | ----- | - |  | - | --------- | - | 
|                                              |       |   | Accumulated Other Comprehensive (Loss)
|                                              |       |   |                                       
|                                              |       |   |                                        |   |             |   | Unrealized  |   | Unrealized |   |           |   |  |   |       |   | 
|                                              |       |   | Foreign                                |   | Net Losses  |   | Net Losses  |   | Minimum    |   |           |   | 
|                                              |       |   | Currency                               |   | On          |   | On          |   | Pension    |   |           |   | 
|                                              |       |   | Translation                            |   | Investments |   | Derivatives |   | Liability  |   | (Deficit)
|                                              |       |   |                                        |   |             |   |             |   |            |   |          
|Balance, December 31, 1999                    |       | $ | (2.1                                   | ) |             |   |             |   |            |   |           |   |  |   |       |   |  | $ | (1,987.4  | )
|Exercise of stock options                     |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Exercise of warrants                          |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Conversion of series preferred stock          |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Preferred stock issued for dividends          |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Accreted dividends on preferred stock         |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Accretion of discount on preferred stock      |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Contribution from NTL Incorporated            |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Corporate restructuring                       |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Comprehensive Loss:                           |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Net loss for the year ended December 31, 2000 |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   | (2,967.0  | )
|Currency translation adjustment               |       |   | (432.7                                 | ) |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Unrealized net losses on investments          |       |   |                                        |   |             | $ | (14.2       | ) |            |   |           |   |  |   |       |   |  |   |           |  
|                                              | Total |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |   | 
|Balance, December 31, 2000                    |       |   | (434.8                                 | ) |             |   | (14.2       | ) |            |   |           |   |  |   |       |   |  |   | (4,954.4  | )
|Contribution from NTL Incorporated, net       |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Non-cash compensation                         |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Comprehensive loss:                           |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Net loss for the year ended December 31, 2001 |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   | (13,706.8 | )
|Currency translation adjustment               |       |   | (607.6                                 | ) |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Unrealized net losses on investments          |       |   |                                        |   |             |   | (1.1        | ) |            |   |           |   |  |   |       |   |  |   |           |  
|Unrealized net losses on derivatives          |       |   |                                        |   |             |   |             |   |            | $ | (15.0     | ) |  |   |       |   |  |   |           |  
|                                              | Total |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |   | 
|Balance, December 31, 2001                    |       | $ | (1,042.4                               | ) |             | $ | (15.3       | ) |            | $ | (15.0     | ) |  |   |       |   |  | $ | (18,661.2 | )
|Contribution from NTL Incorporated, net       |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Net loss for the year ended December 31, 2002 |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   | (3,658.6  | )
|Currency translation adjustment               |       |   | 280.6                                  |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  
|Reclassification adjustment                   |       |   |                                        |   |             |   | 15.3        |   |            |   |           |   |  |   |       |   |  |   |           |  
|Additional minimum pension liability          |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   | (30.0 | ) |  |   |           |  
|Unrealized net losses on derivatives          |       |   |                                        |   |             |   |             |   |            | $ | (15.1     | ) |  |   |       |   |  |   |           |  
|                                              | Total |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |   | 
|Balance, December 31, 2002                    |       | $ | (761.8                                 | ) |             |   |            |   |            | $ | (30.1     | ) |  | $ | (30.0 | ) |  | $ | (22,319.8 | )
|                                              |       |   |                                        |   |             |   |             |   |            |   |           |   |  |   |       |   |  |   |           |  

See accompanying notes.

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Cash Flows
(dollars in millions)

|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |        |  
|------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | - | ----------------------- | ------ | ---- | - | --------- | ----- | - | - | --------- | ------ | -
|                                                                                                        |                                                 |   | Year Ended December 31,
|                                                                                                        |                                                 |   |                        
|                                                                                                        |                                                 |   | 2002                    |        | 2001 |   | 2000     
|                                                                                                        |                                                 |   |                         |        |      |   |          
|Operating activities                                                                                    |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net (loss)                                                                                              |                                                 | $ | (3,658.6                | )      |      | $ | (13,706.8 | )     |   | $ | (2,967.0  | )     
|(Loss) from discontinued operations                                                                     |                                                 |   | (2,374.4                | )      |      |   | (11,872.9 | )     |   |   | (2,407.5  | )     
|Net (loss) on sales of discontinued operations                                                          |                                                 |   | (5.7                    | )      |      |   |          |       |   |   |          |       
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Loss from continuing operations                                                                         |                                                 |   | (1,278.5                | )      |      |   | (1,833.9  | )     |   |   | (559.5    | )     
|Adjustments to reconcile to net cash provided by
(used in) continuing operations:                       |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|                                                                                                        | Depreciation and amortization                   |   |                         | 317.7  |      |   |           | 556.2 |   |   |           | 386.7  |  
|                                                                                                        | Asset impairments                               |   |                         | 854.3  |      |   |           | 485.8 |   |   |           |       |  
|                                                                                                        | Write-down of other assets                      |   |                         | 17.2   |      |   |           |      |   |   |           |       |  
|                                                                                                        | Equity in losses of unconsolidated subsidiaries |   |                         | 199.2  |      |   |           | 619.9 |   |   |           | 46.3   |  
|                                                                                                        | (Gain) loss on sale of assets                   |   |                         | (6.2   | )    |   |           | 58.5  |   |   |           |       |  
|                                                                                                        | Provision for losses on accounts receivable     |   |                         | 7.2    |      |   |           | 32.7  |   |   |           | 0.4    |  
|                                                                                                        | Deferred income taxes                           |   |                         | (127.5 | )    |   |           | (50.3 | ) |   |           | (23.1  | )
|                                                                                                        | Amortization of original issue discount         |   |                         |       |      |   |           | 0.2   |   |   |           | 0.3    |  
|                                                                                                        | Other                                           |   |                         | (6.1   | )    |   |           | 50.0  |   |   |           | (2.1   | )
|Changes in operating assets and liabilities, net of
effect from business acquisitions and dispositions: |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|                                                                                                        | Accounts receivable                             |   |                         | (11.5  | )    |   |           | (9.3  | ) |   |           | (116.7 | )
|                                                                                                        | Other current assets                            |   |                         | (15.3  | )    |   |           | 24.6  |   |   |           | (106.8 | )
|                                                                                                        | Other assets                                    |   |                         | 2.9    |      |   |           | (3.6  | ) |   |           | 2.0    |  
|                                                                                                        | Accounts payable                                |   |                         | 8.3    |      |   |           | 1.4   |   |   |           | 11.4   |  
|                                                                                                        | Accrued expenses and other                      |   |                         | (27.6  | )    |   |           | 9.5   |   |   |           | 53.8   |  
|                                                                                                        | Deferred revenue                                |   |                         | 25.3   |      |   |           | 9.0   |   |   |           | 58.0   |  
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash (used in) continuing operations                                                                |                                                 |   | (40.6                   | )      |      |   | (49.3     | )     |   |   | (249.3    | )     
|Net cash provided by (used in) discontinued operations                                                  |                                                 |   | 251.9                   |        |      |   | (518.8    | )     |   |   | (129.0    | )     
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash provided by (used in) operating activities                                                     |                                                 |   | 211.3                   |        |      |   | (568.1    | )     |   |   | (378.3    | )     
|Investing activities                                                                                    |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Acquisitions, net of cash acquired                                                                      |                                                 |   |                        |        |      |   |          |       |   |   | (3,425.1  | )     
|Purchase of fixed assets                                                                                |                                                 |   | (120.8                  | )      |      |   | (244.9    | )     |   |   | (277.7    | )     
|Investments in and loans to affiliates                                                                  |                                                 |   | (10.9                   | )      |      |   | (119.9    | )     |   |   | (344.4    | )     
|Increase in other assets                                                                                |                                                 |   | (7.0                    | )      |      |   | (49.1     | )     |   |   | (120.8    | )     
|Proceeds from sales of assets                                                                           |                                                 |   | 432.2                   |        |      |   | 30.9      |       |   |   |          |       
|Purchase of marketable securities                                                                       |                                                 |   | (34.0                   | )      |      |   |          |       |   |   | (58.2     | )     
|Proceeds from sales of marketable securities                                                            |                                                 |   | 21.1                    |        |      |   |          |       |   |   | 241.7     |       
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash provided by (used in) continuing operations                                                    |                                                 |   | 280.6                   |        |      |   | (383.0    | )     |   |   | (3,984.5  | )     
|Net cash (used in) discontinued operations                                                              |                                                 |   | (734.4                  | )      |      |   | (1,906.0  | )     |   |   | (9,527.5  | )     
|                                                                                                        |                                                 |   |                         |        |      |   |           |       |   |   |           |       
|Net cash (used in) investing activities                                                                 |                                                 |   | (453.8                  | )      |      |   | (2,289.0  | )     |   |   | (13,512.0 | )     

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Cash Flows  continued
(dollars in millions)

|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|------------------------------------------------------------------------ |  | ----------------------- | ------ | ---- |  | ---- | ------- | - |  | - | -------- | -
|                                                                         |  | Year Ended December 31,
|                                                                         |  |                        
|                                                                         |  | 2002                    |        | 2001 |  | 2000
|                                                                         |  |                         |        |      |  |     
|Financing activities                                                     |  |                         |        |      |  |      |         |   |  |   |          |  
|Proceeds from borrowings, net of financing costs                         |  |                         | 104.1  |      |  |      | 365.4   |   |  |   | 1,860.3  |  
|Proceeds from issuance of redeemable preferred stock                     |  |                         |       |      |  |      |        |   |  |   | 1,850.0  |  
|Proceeds from exercise of stock options and warrants                     |  |                         |       |      |  |      |        |   |  |   | 37.3     |  
|Principal payments                                                       |  |                         | (2.9   | )    |  |      | (68.3   | ) |  |   | (39.1    | )
|Repayment of the NTL Australia bank loan                                 |  |                         | (121.7 | )    |  |      |        |   |  |   |         |  
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Net cash provided by (used in) continuing activities                     |  |                         | (20.5  | )    |  |      | 297.1   |   |  |   | 3,708.5  |  
|Net cash provided by discontinued activities                             |  |                         | 552.2  |      |  |      | 2,428.4 |   |  |   | 8,122.4  |  
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Net cash provided by financing activities                                |  |                         | 531.7  |      |  |      | 2,725.5 |   |  |   | 11,830.9 |  
|Effect of exchange rate changes on cash                                  |  |                         | 50.4   |      |  |      | (11.0   | ) |  |   | (27.9    | )
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Increase (decrease) increase in cash and cash equivalents                |  |                         | 339.6  |      |  |      | (142.6  | ) |  |   | (2,087.3 | )
|Cash and cash equivalents at beginning of year  continuing
operations   |  |                         | 91.0   |      |  |      | 56.9    |   |  |   | 1,511.6  |  
|Cash and cash equivalents at beginning of year  discontinued
operations |  |                         | 276.3  |      |  |      | 453.0   |   |  |   | 1,085.6  |  
|Cash and cash equivalents at end of year  discontinued operations       |  |                         | (502.0 | )    |  |      | (276.3  | ) |  |   | (453.0   | )
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Cash and cash equivalents at end of year  continuing operations         |  | $                       | 204.9  |      |  | $    | 91.0    |   |  | $ | 56.9     |  
|                                                                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Supplemental disclosure of cash flow information                         |  |                         |        |      |  |      |         |   |  |   |          |  
|Cash paid during the year for interest
exclusive of amounts capitalized  |  | $                       | 127.9  |      |  | $    | 168.1   |   |  | $ | 131.1    |  
|Income taxes paid                                                        |  |                         |       |      |  |      | 13.2    |   |  |   | 5.2      |  
|Supplemental schedule of non-cash financing activities                   |  |                         |        |      |  |      |         |   |  |   |          |  
|Accretion of dividend and discount on preferred stock                    |  |                         |       |      |  | $    |        |   |  | $ | 20.1     |  
|Conversion of notes, net of unamortized deferred financing costs         |  |                         |       |      |  |      | (109.5  | ) |  |   |         |  

See accompanying notes.

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements



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

Summary

The accompanying financial statements do not reflect any adjustments in
connection with the emergence of NTL (Delaware), Inc. (NTL Delaware or the
Company), a wholly-owned subsidiary of NTL Europe (as defined below) which
holds most of NTL Europes assets, from Chapter 11 reorganization nor the
likely deconsolidation of Cablecom GmbH, an indirect wholly-owned subsidiary of
the Company (Cablecom), and, therefore, are not indicative of the Companys
future results of operations, financial position or cash flows.

NTLs Completed Restructuring

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

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

New NTL has been accounted for as a discontinued operation beginning with the
quarter ended September 30, 2002 and, accordingly, it is excluded from assets
and liabilities of continuing operations as of December 31, 2002 and 2001, and
from results of continuing operations for the years ended December 31, 2002,
2001 and 2000.

With the separation of Old NTL into two entities, the majority of the
significant assets and holdings formerly owned and consolidated by Old NTL were
retained by New NTL. Generally, other than Cablecom (which is itself being
restructured as described below), the Companys assets are not material
compared to those of New NTL. In addition, as described in more detail in Note
22, as a result of the existing defaults under Cablecoms debt agreements and
its overindebtedness, in the near future, the Company expects its interest in
Cablecom to be reduced to, at most, a small minority position. Further, NTL
Europes board of directors and management will explore the strategic and
financial alternatives available to it, including NTL Europes possible
liquidation, a going-private transaction and the sale of its remaining assets.
Accordingly, the Companys historic financial statements presented herein are
not particularly meaningful to the Companys current and anticipated future
business and should not be relied upon as indicative of the Companys future
performance.

Historical Structure of the Company

On May 18, 2000, the entity then known as NTL Incorporated (currently named NTL
(Delaware), Inc.) completed a corporate restructuring to create a holding
company structure. The formation of the holding company was part of NTL
Delaware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 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 was called
NTL Incorporated (which is now known as NTL Europe, Inc.) and the holding
companys subsidiary simultaneously changed its name to NTL (Delaware), Inc.
NTL (Delaware), Inc. continues to be wholly-owned by NTL Europe.

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

F-74



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|1. |  | Organization and Business (continued)
|-- |  | -------------------------------------

Business

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

Cablecom has approximately CHF 3,792 million in bank debt (which includes
recently accrued interest payments) maturing on the business day following May
31, 2003 (with an additional automatic extension to June 30, 2003 under certain
circumstances), and insufficient resources to satisfy such obligation. In
addition, Cablecom and two of its subsidiaries are overindebted under Swiss
law and, accordingly, may be required to file for insolvency proceedings in
Switzerland. Cablecom and its lenders have been involved in ongoing
discussions regarding a complete financial restructuring of Cablecom which
will, among other things, reduce the amount of bank debt outstanding, extend
the maturity date thereof and resolve the Swiss overindebtedness issue. In the
event that such negotiations are unsuccessful, the Company expects to be
deprived of all of its ownership interest in Cablecom in the near future.
Further, even if such negotiations are successful, the Company expects to be
left with no more than a small minority interest in Cablecom. Accordingly, the
Company anticipates that, in the near future, the results of Cablecom will no
longer be reported as part of the Companys consolidated results of operations.
In that regard, it should also be noted that, in accordance with the terms of
the existing Cablecom credit agreement, no dividends, distributions or other
payments have ever been or will be made by Cablecom to the Company. Further,
the lenders under Cablecoms credit facility have no legal recourse to any
assets of the NTL Europe group, other than to the shares of Cablecom, certain
assets of the Cablecom group and certain assets of the Companys subsidiaries
which hold, directly or indirectly, the shares of the Cablecom group.

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

The Companys most significant holdings are currently being restructured, and
the Company is reviewing all of its holdings to determine the most appropriate
course of action, which may result in one or more of these holdings being sold,
transferred, foreclosed on, liquidated, wound-up or otherwise disposed of in
the near future or at a later date. The Company may not receive any proceeds
from any of these transactions after the payment of outstanding debt that some
of these companies may owe and any fees and expenses incurred in connection
with these transactions. See, in particular, Note 21 Commitments and
Contingent Liabilities  Cablecom. To the extent NTL Europe receives cash
proceeds from any asset sale it or its subsidiaries complete, the Preferred
Stock will be entitled to mandatory redemption in a like amount, subject to
some limited exceptions set forth in NTL Europes charter, until all shares of
the Preferred Stock (having an aggregate of $343 million in liquidation
preference) have been redeemed.



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

Background of Restructuring

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

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

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

F-75



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

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

As a result of the payment defaults, as well as the voluntary filing under
Chapter 11 by Old NTL and certain of its subsidiaries, on May 8, 2002, there
was an event of default under all of Old NTL and its subsidiaries credit
facilities and the indentures governing all of their publicly traded debt,
other than debt of NTL (Triangle) LLC.

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

Liquidity and Capital Resources

NTL Delaware emerged from bankruptcy on January 10, 2003, at which time, as
part of the reorganization plan, its debt was cancelled.

NTL Delaware is primarily a holding company for the stock of its subsidiaries
with no material independent source of cash in the next twelve months other
than approximately $1 million from the disposition of its interest in iesy (as
defined in Note 9) that was received in January 2003 and the expected
collection of a note receivable relating to the 2002 sale of NTL Australia in
the amount of approximately $6 million due in September 2003. At the time NTL
Delaware emerged from bankruptcy, it had no cash on hand. NTL Delaware does
not anticipate receiving any material cash proceeds from any of its
subsidiaries during 2003. NTL Delawares operating expenses are expected to be
minimal in 2003. NTL Delaware also had minimal liabilities upon emergence from
bankruptcy. However, NTL Delaware is the guarantor of approximately $42
million of commitments of one of its subsidiaries, Premium TV Limited. Premium
TV Limited is expected to have the resources to meet its obligations as they
come due in the normal course of business through at least January 1, 2004 and,
accordingly, management does not believe that NTL Delaware would be required to
pay any amounts in connection with the guarantees through such date.

As described in Notes 1, 2 and 21, the Company expects to either complete a
restructuring of the debt and equity of Cablecom, in the near future, which
would result in a dilution of the Companys ownership interest to less than
five percent or, if such restructuring is not successful, to file for the
insolvency of Cablecom in Switzerland, which would result in the Companys
having no remaining ownership in Cablecom. In either of these events, the
lenders under Cablecoms credit facility would have no legal recourse to any
assets of the NTL Europe group, other than to the shares of Cablecom, certain
assets of the Cablecom group and certain assets of the Companys subsidiaries
which hold, directly or indirectly, the shares of the Cablecom group.

F-76



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

Recapitalization Expense

The joint reorganization plan provided that recapitalization costs be allocated
among the Company, NTL Europe and New NTL.

Recapitalization items, net consist of the following:

|                                                                   |  |               |      |      |  |      |   |  |  |   |   | 
|------------------------------------------------------------------ |  | ------------- | ---- | ---- |  | ---- | - |  |  | - | - | 
|                                                                   |  | Year Ended   
|                                                                   |  | December 31, 
|                                                                   |  |              
|                                                                   |  | 2002          |      | 2001 |  | 2000
|                                                                   |  |               |      |      |  |     
|                                                                   |  | (in millions)
|Payroll and related costs paid                                     |  | $             | (0.1 | )    |  | $    |  |  |  | $ |  | 
|Professional fees                                                  |  |               | (6.9 | )    |  |      |  |  |  |   |  | 
|Interest earned on accumulated cash from Chapter 11 proceeding (1) |  |               | 2.2  |      |  |      |  |  |  |   |  | 
|                                                                   |  |               |      |      |  |      |   |  |  |   |   | 
|                                                                   |  | $             | (4.8 | )    |  | $    |  |  |  | $ |  | 
|                                                                   |  |               |      |      |  |      |   |  |  |   |   | 

Details of operating cash receipts and payments resulting from the
recapitalization are as follows. NTL Europe and NTL Delaware made payments on
behalf of New NTL which were charged to New NTL. The recapitalization items
charged to New NTL are included in loss from discontinued operations.

|                                                     |  |                   |       |  
|---------------------------------------------------- |  | ----------------- | ----- | -
|                                                     |  | Year Ended       
|                                                     |  | December 31, 2002
|                                                     |  |                  
|                                                     |  | (in millions)    
|Interest income (1)                                  |  | $                 | 2.2   |  
|Payroll and related costs paid                       |  |                   |      |  
|Professional fees                                    |  |                   | (45.9 | )
|                                                     |  |                   |       |  
|Net operating cash flows from recapitalization items |  | $                 | (43.7 | )
|                                                     |  |                   |       |  

(1)  Interest income resulting from the recapitalization is for the period May
8, 2002 through December 31, 2002.

Pro Forma Consolidated Balance Sheet

The following pro forma consolidated balance sheet as of December 31, 2002
gives effect to the Companys emergence from Chapter 11 reorganization and the
adoption of fresh-start reporting as if both had occurred on December 31, 2002.
The Company adopted fresh-start reporting in January 2003 in accordance with
AICPA Statement of Position 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code (SOP 90-7). The Company adopted
fresh-start reporting because the holders of Old NTLs voting common shares
immediately before filing and confirmation of the Plan received less than 50%
of the voting shares of the emerging company, and because the Companys
reorganization value is less than its post-petition liabilities and allowed
claims.

The adjustments entitled Emergence from Chapter 11 reflect the consummation
of the Plan, including the deconsolidation of New NTL.

The adjustments entitled Fresh-Start reflect the adoption of fresh-start
reporting. The Company engaged an independent financial advisor to assist in
the determination of the reorganization value (or fair value) of its assets and
the present value of its liabilities. This determination resulted in the
fresh-start reporting adjustments to write-down fixed assets and write-up of
intangible assets to their fair values. The determination of the
reorganization value is preliminary since the valuation of certain of the
Companys assets is still in process. In addition, the Companys total
reorganization value exceeded the amounts allocable to identifiable assets that
resulted in a new indefinite-lived intangible asset.

F-77



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

The emergence from Chapter 11 and the adoption of fresh-start reporting in
January 2003 resulted in the following items of income (expense) that will be
recognized in the Companys financial statements for the quarter ended March
31, 2003:

|                                               |  |               |         |  
|---------------------------------------------- |  | ------------- | ------- | -
|                                               |  | (in millions)
|                                               |  |              
|Gain on debt discharge                         |  | $             | 1,037.8 |  
|Gain related to deconsolidation of New NTL     |  |               | 4,999.2 |  
|Fresh-start adoption  intangible assets       |  |               | 142.1   |  
|Fresh-start adoption  long-term debt          |  |               | 1,284.9 |  
|Fresh-start adoption  deferred tax liability  |  |               | (13.5   | )
|Fresh-start adoption  non-current liabilities |  |               | (61.2   | )
|Fresh-start adoption  accrued expenses        |  |               |        |  
|Fresh-start adoption  fixed assets            |  |               | (507.0  | )
|Fresh-start adoption  other assets            |  |               | (33.5   | )
|                                               |  |               |         |  
|TOTAL                                          |  | $             | 6,848.8 |  
|                                               |  |               |         |  

The adjustments entitled Deconsolidation of Cablecom reflect the likelihood
that the Company will not retain a significant interest in Cablecom and that
Cablecom will no longer be reported as part of the Companys consolidated
results of operations. As described in more detail in Note 22 (Commitments and
Contingent Liabilities  Cablecom), Cablecom has approximately CHF 3,792
million in bank debt (which includes recently accrued interest payments)
maturing on the business day following May 31, 2003 (with an additional
automatic extension to June 30, 2003 under certain circumstances), and
insufficient resources to satisfy such obligation. In addition, Cablecom and
two of its subsidiaries are overindebted under Swiss law and, accordingly,
may be required to file for insolvency proceedings in Switzerland. Cablecom and
its lenders have been involved in ongoing discussions regarding a complete
financial restructuring of Cablecom which will, among other things, reduce the
amount of bank debt outstanding, extend the maturity date thereof and resolve
the Swiss overindebtedness issue. In the event that such negotiations are
unsuccessful, the Company expects to be deprived of all of its ownership
interest in Cablecom in the near future. Further, even if such negotiations
are successful, the Company expects to be left with no more than a small
minority interest in Cablecom. Accordingly, the Company anticipates that, in
the near future, the results of Cablecom will no longer be reported as part of
the Companys consolidated results of operations. In that regard, it should
also be noted that, in accordance with the terms of the existing Cablecom
credit agreement, no dividends, distributions or other payments have ever been
or will be made by Cablecom to the Company. Further, the lenders under
Cablecoms credit facility have no legal recourse to any assets of the NTL
Europe group, other than to the shares of Cablecom, certain assets of the
Cablecom group and certain assets of the Companys subsidiaries which hold,
directly or indirectly, the shares of the Cablecom group.

F-78



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|2. |  | Reorganization and Emergence from Chapter 11 (continued)
|-- |  | --------------------------------------------------------

|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|-------------------------------------------------------------------------- | --------------------------------------------------------------- | - | ----------------- | --------- | ---------- | - | --------- | --------- | --------------- | - | --------------- | --------- | ----------------- | - | ------- | ------- | --------- | - | -------- | -------- | - | - | ------- | ------- | 
|                                                                           |                                                                 |   | Historical        |           | Emergence  |   |           |           |                 |   | Before          |           |                   |   |         |         | Pro Forma
|                                                                           |                                                                 |   | as of             |           | from       |   | Fresh-    |           | Deconsolidation |   | Deconsolidation |           | as of            
|                                                                           |                                                                 |   | December 31, 2002 |           | Chapter 11 |   | Start     |           | of Cablecom     |   | of Cablecom     |           | December 31, 2002
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                  
|                                                                           |                                                                 |   | (in millions)    
|Assets                                                                     |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |        
|Current assets:                                                            |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |        
|                                                                           | Cash and cash equivalents                                       |   | $                 | 204.9     |            |   | $         | (110.4    | )               |   | $               |          |                   |   | $       | 94.5    |           |   | $        | (85.9    | ) |   | $       | 8.6     | 
|                                                                           | Marketable securities                                           |   |                   | 13.1      |            |   |           | (13.1     | )               |   |                 |          |                   |   |         |        |           |   |          |         |   |   |         |        | 
|                                                                           | Accounts receivable-trade, less allowance
for doubtful accounts |   |                   | 240.7     |            |   |           |          |                 |   |                 |          |                   |   |         | 240.7   |           |   |          | (230.8   | ) |   |         | 9.9     | 
|                                                                           | Affiliate receivable                                            |   |                   | 35.1      |            |   |           | (18.8     | )               |   |                 |          |                   |   |         | 16.3    |           |   |          |         |   |   |         | 16.3    | 
|                                                                           | Other                                                           |   |                   | 48.7      |            |   |           |          |                 |   |                 |          |                   |   |         | 48.7    |           |   |          | (38.5    | ) |   |         | 10.2    | 
|                                                                           | Discontinued operations                                         |   |                   | 12,974.0  |            |   |           | (12,974.0 | )               |   |                 |           |                   |   |         |        |           |   |          | 2,189.1  |   |   |         | 2,189.1 | 
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|Total current assets                                                       |                                                                 |   | 13,516.5          |           |            |   | (13,116.3 | )         |                 |   |                |           |                   |   | 400.2   |         |           |   | 1,833.9  |          |   |   | 2,234.1 |        
|Fixed assets, net                                                          |                                                                 |   | 1,681.9           |           |            |   |          |           |                 |   | (506.9          | )         |                   |   | 1,175.0 |         |           |   | (1,166.8 | )        |   |   | 8.2     |        
|Goodwill                                                                   |                                                                 |   | 220.1             |           |            |   | (1.4      | )         |                 |   | (218.7          | )         |                   |   |        |         |           |   |         |          |   |   |        |        
|Reorganization value in excess of amounts
Allocable to identifiable assets |                                                                 |   |                  |           |            |   |          |           |                 |   | 213.9           |           |                   |   | 213.9   |         |           |   | (213.9   | )        |   |   |        |        
|Customer lists, net                                                        |                                                                 |   | 62.8              |           |            |   |          |           |                 |   | 146.8           |           |                   |   | 209.6   |         |           |   | (209.6   | )        |   |   |        |        
|Investments in and loans to affiliates, net                                |                                                                 |   | 7.8               |           |            |   | (0.1      | )         |                 |   |                |           |                   |   | 7.7     |         |           |   | (7.7     | )        |   |   |        |        
|Deferred tax asset                                                         |                                                                 |   | 200.9             |           |            |   |          |           |                 |   | 69.2            |           |                   |   | 270.1   |         |           |   | (235.5   | )        |   |   | 34.6    |        
|Other assets, net                                                          |                                                                 |   | 117.3             |           |            |   | (19.0     | )         |                 |   | (50.8           | )         |                   |   | 47.5    |         |           |   | (0.4     | )        |   |   | 47.1    |        
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|Total assets                                                               |                                                                 | $ | 15,807.3          |           |            | $ | (13,136.8 | )         |                 | $ | (346.5          | )         |                   | $ | 2,324.0 |         |           | $ |         |          |   | $ | 2,324.0 |        
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|Liabilities and shareholders (deficiency)                                 |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |        
|Liabilities not subject to compromise                                      |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |        
|Current liabilities:                                                       |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |        
|                                                                           | Accounts payable                                                |   | $                 | 48.3      |            |   | $         |          |                 |   | $               |          |                   |   | $       | 48.3    |           |   | $        | (40.6    | ) |   | $       | 7.7     | 
|                                                                           | Accrued expenses and other                                      |   |                   | 87.4      |            |   |           |           |                 |   |                 |          |                   |   |         | 87.4    |           |   |          | (64.2    | ) |   |         | 23.2    | 
|                                                                           | Interest payable                                                |   |                   | 43.5      |            |   |           |          |                 |   |                 |          |                   |   |         | 43.5    |           |   |          | (43.5    | ) |   |         |        | 
|                                                                           | Deferred revenue                                                |   |                   | 235.6     |            |   |           |          |                 |   |                 |          |                   |   |         | 235.6   |           |   |          | (229.8   | ) |   |         | 5.8     | 
|                                                                           | Affiliate payable                                               |   |                   | 7.8       |            |   |           |          |                 |   |                 |          |                   |   |         | 7.8     |           |   |          |         |   |   |         | 7.8     | 
|                                                                           | Current portion of long-term debt                               |   |                   | 2,719.3   |            |   |           |          |                 |   |                 | (1,284.9  | )                 |   |         | 1,434.4 |           |   |          | (1,434.4 | ) |   |         |        | 
|                                                                           | Discontinued operations                                         |   |                   | 17,973.2  |            |   |           | (17,973.2 | )               |   |                 |          |                   |   |         |        |           |   |          | 2,189.1  |   |   |         | 2,189.1 | 
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|Total
current liabilities                                                  |                                                                 |   | 21,115.1          |           |            |   | (17,973.2 | )         |                 |   | (1,284.9        | )         |                   |   | 1,857.0 |         |           |   | 376.6    |          |   |   | 2,233.6 |        
|Long-term debt                                                             |                                                                 |   |                  |           |            |   |          |           |                 |   |                |           |                   |   |        |         |           |   |         |          |   |   |         |        
|Other                                                                      |                                                                 |   | 164.8             |           |            |   |          |           |                 |   | (16.2           | )         |                   |   | 148.6   |         |           |   | (96.9    | )        |   |   | 51.7    |        
|Deferred income taxes                                                      |                                                                 |   | 231.6             |           |            |   |          |           |                 |   | 82.7            |           |                   |   | 314.3   |         |           |   | (279.7   | )        |   |   | 34.6    |        
|Commitments and contingent liabilities                                     |                                                                 |   |                  |           |            |   |          |           |                 |   |                |           |                   |   |        |         |           |   |         |          |   |   |        |        
|Senior Redeemable Preferred                                                |                                                                 |   |                  |           |            |   |          |           |                 |   |                |           |                   |   |        |         |           |   |         |          |   |   |        |        
|Liabilities subject to compromise                                          |                                                                 |   | 1,243.7           |           |            |   | (1,243.7  | )         |                 |   |                |           |                   |   |        |         |           |   |         |          |   |   |        |        
|Shareholders (deficiency):                                                |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |        
|                                                                           | Common stock-old                                                |   |                   |          |            |   |           |          |                 |   |                 |          |                   |   |         |        |           |   |          |         |   |   |         |        | 
|                                                                           | Common stock-new                                                |   |                   |          |            |   |           |          |                 |   |                 |          |                   |   |         |        |           |   |          |         |   |   |         |        | 
|                                                                           | Additional paid-in capital                                      |   |                   | 16,193.8  |            |   |           |          |                 |   |                 | (16,189.7 | )                 |   |         | 4.1     |           |   |          |         |   |   |         | 4.1     | 
|                                                                           | Accumulated other comprehensive (loss)                          |   |                   | (821.9    | )          |   |           |          |                 |   |                 | 821.9     |                   |   |         |        |           |   |          |         |   |   |         |        | 
|                                                                           | (Deficit)                                                       |   |                   | (22,319.8 | )          |   |           | 6,080.1   |                 |   |                 | 16,239.7  |                   |   |         |        |           |   |          |         |   |   |         |        | 
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|Shareholders (deficiency)                                                 |                                                                 |   | (6,947.9          | )         |            |   | 6,080.1   |           |                 |   | 871.9           |           |                   |   | 4.1     |         |           |   |         |          |   |   | 4.1     |        
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 
|Total liabilities and shareholders
(deficiency)                           |                                                                 | $ | 15,807.3          |           |            | $ | (13,136.8 | )         |                 | $ | (346.5          | )         |                   | $ | 2,324.0 |         |           | $ |         |          |   | $ | 2,324.0 |        
|                                                                           |                                                                 |   |                   |           |            |   |           |           |                 |   |                 |           |                   |   |         |         |           |   |          |          |   |   |         |         | 

F-79



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies
|-- |  | -------------------------------

Basis of Presentation and Use of Estimates

The accompanying financial statements have been prepared on a going concern
basis. As described in Notes 1, 2 and 21, the Company expects to either
complete a restructuring of the debt and equity of Cablecom in the near future,
which would result in a dilution of the Companys ownership interest to less
than five percent or, if such restructuring is not successful, to file for the
insolvency of Cablecom in Switzerland, which would result in the Company having
no remaining ownership in Cablecom. In either of these events, the lenders
under Cablecoms credit facility would have no legal recourse to any assets of
the NTL Europe group, other than to the shares of Cablecom, certain assets of
the Cablecom group and certain assets of the Companys subsidiaries which hold,
directly or indirectly, the shares of the Cablecom group.

NTL Delaware is primarily a holding company for the stock of its subsidiaries
with no material independent source of cash in the next twelve months other
than approximately $1 million from the disposition of its interest in iesy that
was received in January 2003 and the expected collection of a note receivable
relating to the 2002 sale of NTL Australia in the amount of approximately $6
million due in September 2003. At the time NTL Delaware emerged from
bankruptcy, it had no cash on hand. NTL Delaware does not anticipate receiving
any material cash proceeds from any of its subsidiaries during 2003. NTL
Delawares operating expenses are expected to be minimal in 2003. NTL Delaware
also had minimal liabilities upon emergence from bankruptcy. However, NTL
Delaware is the guarantor of approximately $42 million of commitments of one of
its subsidiaries, Premium TV Limited. Premium TV Limited is expected to have
the resources to meet its obligations as they come due in the normal course of
business through at least January 1, 2004 and, accordingly, management does not
believe that NTL Delaware would be required to pay any amounts in connection
with the guarantees through such date.

The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States,
including AICPA Statement of Position 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code (SOP 90-7). Old NTL had determined
that there was insufficient collateral to cover the interest portion of
scheduled payments on certain of its prepetition debt obligations. Old NTL had
therefore discontinued accruing interest on these obligations. For the year
ended December 31, 2002, contractual interest was $198.2 million, which was
$42.5 million in excess of reported interest expense.

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

Principles of Consolidation

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

Reclassification

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

Foreign Currency Translation

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

F-80



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------

Cash Equivalents

Cash equivalents are short-term highly liquid investments purchased with a
maturity of three months or less. Cash equivalents were $105.3 million and
$1.6 million at December 31, 2002 and 2001, respectively, which consisted
primarily of bank time deposits and corporate commercial paper. At December
31, 2002 and 2001, none and $1.5 million, respectively, of the cash equivalents
were denominated in foreign currencies.

Marketable Securities

Marketable securities at December 31, 2002 consist of commercial paper.
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 are included in interest income. The cost of securities sold or
matured is based on the specific identification method. Interest on securities
is included in interest income.

During the years ended December 31, 2002, 2001 and 2000, there were no realized
gains or losses on sales of securities.

Fixed Assets

Fixed assets are stated at cost, which includes amounts capitalized for labor
and overhead expended in connection with the design and installation of
operating equipment. Internal costs directly related to the construction of
such facilities, including payroll and overhead costs of certain employees, are
capitalized. Depreciation is computed by the straight-line method over the
estimated useful lives of the assets. Estimated useful lives of fixed assets
range from 5 years to 30 years.

Intangible Assets

Intangible assets include goodwill and customer lists. Goodwill is the excess
of the purchase price over the fair value of net assets acquired in business
combinations accounted for as purchases. Prior to the adoption of SFAS No.
142, Goodwill and Other Intangible Assets, goodwill was amortized on a
straight-line basis over 10 years. Upon the adoption of SFAS No. 142,
goodwill is no longer amortized. Instead goodwill is reviewed annually (or more
frequently under certain conditions) for impairment in accordance with this
statement.

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.

Impairment of Long-Lived Assets

Long-lived assets, including fixed assets and amortizable definite lived
intangible 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.

Investments

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

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|3. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------

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

Deferred Financing Costs

Deferred financing costs, net of $33.9 million and $70.9 million as of December
31, 2002 and 2001, respectively, are included in other assets. Deferred
financing costs are incurred in connection with the issuance of debt and are
amortized over the term of the related debt.

Revenue Recognition

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

Cable Television System Costs, Expenses and Revenues

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

Advertising Expense

The Company charges the cost of advertising to expense as incurred.
Advertising costs were $9.4 million, $13.1 million and $19.0 million in 2002,
2001 and 2000, respectively.

Stock-Based Compensation

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

Had compensation for stock options granted by Old NTL been determined
consistent with the provisions of SFAS No. 123, the effect on the Companys net
loss would have been changed to the following pro forma amounts (See Note 18):

|                                           |  |                                         |          |      |  |      |           |   |  |   |          |  
|------------------------------------------ |  | --------------------------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                           |  | For the Year Ended December 31,        
|                                           |  |                                        
|                                           |  | 2002                                    |          | 2001 |  | 2000
|                                           |  |                                         |          |      |  |     
|                                           |  | (in millions, except per share amounts)
|Non-cash compensation expense, as reported |  | $                                       |         |      |  | $    | 30.6      |   |  | $ |         |  
|Non-cash compensation expense, pro forma   |  | $                                       | 264.3    |      |  | $    | 268.3     |   |  | $ | 255.8    |  
|Net loss, as reported                      |  | $                                       | (3,658.6 | )    |  | $    | (13,706.8 | ) |  | $ | (2,967.0 | )
|Net loss, pro forma                        |  | $                                       | (3,922.9 | )    |  | $    | (13,975.1 | ) |  | $ | (3,222.8 | )

Derivative Financial Instruments

Old NTL has used financial instruments to hedge a portion, but not all, of its
exposure from floating interest rate debt and from movements in foreign
exchange rates. Gains and losses on these instruments were deferred and
recognized in the statement of operations when the related hedged transactions
were 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.

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|4. |  | Discontinued Operations
|-- |  | -----------------------

Pursuant to the Plan, Old NTL was split into two separate companies on the
Effective Date. The entity formerly known as NTL Communications Corp. was
renamed NTL Incorporated and became the holding company for Old NTLs
principal UK and Ireland assets. Prior to consummation of the Plan, NTL
Communications Corp. was a wholly-owned subsidiary of Old NTL, which, pursuant
to the Plan, was renamed NTL Europe, Inc. and which became the holding
company for Old NTLs European and certain other assets. Pursuant to the Plan,
all of the outstanding securities of the Old NTL and certain of its
subsidiaries were canceled, and NTL Europe issued shares of its Common Stock
and Preferred Stock and New NTL issued shares of its common stock and Series A
warrants to various former creditors and stockholders of the Old NTL and its
subsidiaries. The precise mix of new securities received by holders of each
particular type of security of Old NTL and its subsidiaries was set forth in
the Plan.

New NTL is accounted for as a discontinued operation, and accordingly, it is
excluded from assets and liabilities of continuing operations as of December
31, 2002 and 2001, and from results of continuing operations for the years
ended December 31, 2002, 2001 and 2000.

On April 2, 2002, Old NTL had completed the previously announced sale of its
Australian broadcast business to Macquarie Communications Infrastructure
Holding Pty Limited for A$850 million (US$451.3 million). The net proceeds
from the sale after the repayment of the outstanding bank credit facility and
transaction related costs were approximately A$575.3 million (US$304.5
million). Old NTL recognized a gain on the sale of approximately US$7.5
million, net of income tax expense of US$4.6 million, in April 2002. NTL
Australia is accounted for as a discontinued operation and, accordingly, NTL
Australia is excluded from assets and liabilities of continuing operations as
of December 31, 2002 and 2001 and from results of continuing operations for the
years ended December 31, 2002, 2001 and 2000.

In October 2002, Cablecom sold its consumer electronics retail stores
(Rediffusion) for approximately CHF 5.0 million. The Company recognized a
loss on the sale of approximately US$13.2 million in October 2002. Rediffusion
is accounted for as a discontinued operation and, accordingly, Rediffusion is
excluded from assets and liabilities of continuing operations as of December
31, 2002 and 2001 and from results of continuing operations for the years ended
December 31, 2002, 2001 and 2000.

The following are the assets, liabilities and results of operations of New NTL, NTL Australia and Rediffusion:

|                                  |  |                   |          |           |  |             |   |       |  |   |   |  |  |   |          | 
|--------------------------------- |  | ----------------- | -------- | --------- |  | ----------- | - | ----- |  | - | - |  |  | - | -------- | 
|                                  |  | December 31, 2002
|                                  |  | (in millions)    
|                                  |  |                  
|                                  |  | New               |          | NTL       |  |             |   |       |  |   |   | 
|                                  |  | NTL               |          | Australia |  | Rediffusion |   | Total
|                                  |  |                   |          |           |  |             |   |      
|Current assets                    |  | $                 | 1,103.3  |           |  | $           |  |       |  | $ |  |  |  | $ | 1,103.3  | 
|Fixed assets, net                 |  |                   | 11,088.9 |           |  |             |  |       |  |   |  |  |  |   | 11,088.9 | 
|Other assets                      |  |                   | 781.8    |           |  |             |  |       |  |   |  |  |  |   | 781.8    | 
|                                  |  |                   |          |           |  |             |   |       |  |   |   |  |  |   |          | 
|Total assets                      |  | $                 | 12,974.0 |           |  | $           |  |       |  | $ |  |  |  | $ | 12,974.0 | 
|                                  |  |                   |          |           |  |             |   |       |  |   |   |  |  |   |          | 
|Current liabilities               |  | $                 | 7,746.2  |           |  | $           |  |       |  |   |  |  |  | $ | 7,746.2  | 
|Non current liabilities           |  |                   | 94.4     |           |  |             |  |       |  |   |  |  |  |   | 94.4     | 
|Liabilities subject to compromise |  |                   | 10,132.6 |           |  |             |  |       |  |   |  |  |  |   | 10,132.6 | 
|                                  |  |                   |          |           |  |             |   |       |  |   |   |  |  |   |          | 
|Total liabilities                 |  | $                 | 17,973.2 |           |  | $           |  |       |  | $ |  |  |  | $ | 17,973.2 | 
|                                  |  |                   |          |           |  |             |   |       |  |   |   |  |  |   |          | 

|                        |  |                   |          |           |  |             |       |       |  |   |      |  |  |   |          | 
|----------------------- |  | ----------------- | -------- | --------- |  | ----------- | ----- | ----- |  | - | ---- |  |  | - | -------- | 
|                        |  | December 31, 2001
|                        |  | (in millions)    
|                        |  |                  
|                        |  | New               |          | NTL       |  |             |       |       |  |   |      | 
|                        |  | NTL               |          | Australia |  | Rediffusion |       | Total
|                        |  |                   |          |           |  |             |       |      
|Current assets          |  | $                 | 1,164.3  |           |  | $           | 32.0  |       |  | $ | 32.1 |  |  | $ | 1,228.4  | 
|Fixed assets, net       |  |                   | 10,840.3 |           |  |             | 235.2 |       |  |   | 2.9  |  |  |   | 11,078.4 | 
|Other assets            |  |                   | 1,027.1  |           |  |             | 137.9 |       |  |   | 20.8 |  |  |   | 1,185.8  | 
|                        |  |                   |          |           |  |             |       |       |  |   |      |  |  |   |          | 
|Total assets            |  | $                 | 13,031.7 |           |  | $           | 405.1 |       |  | $ | 55.8 |  |  | $ | 13,492.6 | 
|                        |  |                   |          |           |  |             |       |       |  |   |      |  |  |   |          | 
|Current liabilities     |  | $                 | 16,091.7 |           |  | $           | 71.1  |       |  | $ | 29.3 |  |  | $ | 16,192.1 | 
|Non current liabilities |  |                   | 122.7    |           |  |             | 111.9 |       |  |   | 3.9  |  |  |   | 238.5    | 
|                        |  |                   |          |           |  |             |       |       |  |   |      |  |  |   |          | 
|Total liabilities       |  | $                 | 16,214.4 |           |  | $           | 183.0 |       |  | $ | 33.2 |  |  | $ | 16,430.6 | 
|                        |  |                   |          |           |  |             |       |       |  |   |      |  |  |   |          | 

F-83



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|4. |  | Discontinued Operations (continued)
|-- |  | -----------------------------------

|                 |  |                              |          |           |  |             |      |       |  |   |      |   |  |   |          |  
|---------------- |  | ---------------------------- | -------- | --------- |  | ----------- | ---- | ----- |  | - | ---- | - |  | - | -------- | -
|                 |  | Year Ended December 31, 2002
|                 |  | (in millions)               
|                 |  |                             
|                 |  | New                          |          | NTL       |  |             |      |       |  |   |      |  
|                 |  | NTL                          |          | Australia |  | Rediffusion |      | Total
|                 |  |                              |          |           |  |             |      |      
|Revenues         |  | $                            | 3,256.5  |           |  | $           | 17.3 |       |  | $ | 49.8 |   |  | $ | 3,323.6  |  
|Operating (loss) |  |                              | (1,128.4 | )         |  |             | 0.3  |       |  |   | (7.1 | ) |  |   | (1,135.2 | )
|Net (loss)       |  |                              | (2,367.2 | )         |  |             | (0.3 | )     |  |   | (6.9 | ) |  |   | (2,374.4 | )

|                 |  |                              |           |           |  |             |      |       |  |   |       |   |  |   |           |  
|---------------- |  | ---------------------------- | --------- | --------- |  | ----------- | ---- | ----- |  | - | ----- | - |  | - | --------- | -
|                 |  | Year Ended December 31, 2001
|                 |  | (in millions)               
|                 |  |                             
|                 |  | New                          |           | NTL       |  |             |      |       |  |   |       |  
|                 |  | NTL                          |           | Australia |  | Rediffusion |      | Total
|                 |  |                              |           |           |  |             |      |      
|Revenues         |  | $                            | 3,181.5   |           |  | $           | 61.8 |       |  | $ | 64.3  |   |  | $ | 3,307.6   |  
|Operating (loss) |  |                              | (10,409.7 | )         |  |             | (7.4 | )     |  |   | (15.4 | ) |  |   | (10,432.5 | )
|Net (loss)       |  |                              | (11,850.8 | )         |  |             | (6.5 | )     |  |   | (15.6 | ) |  |   | (11,872.9 | )

|                 |  |                              |          |           |  |             |       |       |  |   |      |  |  |   |          |  
|---------------- |  | ---------------------------- | -------- | --------- |  | ----------- | ----- | ----- |  | - | ---- |  |  | - | -------- | -
|                 |  | Year Ended December 31, 2000
|                 |  | (in millions)               
|                 |  |                             
|                 |  | New                          |          | NTL       |  |             |       |       |  |   |      | 
|                 |  | NTL                          |          | Australia |  | Rediffusion |       | Total
|                 |  |                              |          |           |  |             |       |      
|Revenues         |  | $                            | 2,484.2  |           |  | $           | 55.0  |       |  | $ | 74.7 |  |  | $ | 2,613.9  |  
|Operating (loss) |  |                              | (1,525.2 | )         |  |             | (19.5 | )     |  |   | 1.4  |  |  |   | (1,543.3 | )
|Net (loss)       |  |                              | (2,388.1 | )         |  |             | (20.9 | )     |  |   | 1.5  |  |  |   | (2,407.5 | )



|5. |  | Recent Accounting Pronouncements
|-- |  | --------------------------------

On December 31, 2002, Old NTL adopted the disclosure provisions of SFAS No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure.
SFAS No. 148 amends SFAS No. 123, Accounting for Stock Based Compensation, to
provide alternative methods of transition to SFAS No. 123s fair value method
of accounting for stock-based employee compensation. SFAS No. 148 also amends
the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, Interim
Financial Reporting.

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

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
which is effective for the Company on January 1, 2003. The adoption of SFAS
No. 145 will require any gain or loss recognized on the extinguishment of debt
to be classified as income or loss from continuing operations. Prior to SFAS
No. 145, gain or loss recognized on the extinguishment of debt was classified
as an extraordinary item.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which was effective for the Company on January
1, 2002. This Statement supercedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
and other related accounting guidance. The adoption of this new standard had
no effect on the results of operations, financial condition or cash flows of
the Company, except that it required the Company to treat NTL Australia as a
discontinued operation beginning in the first quarter of 2002. The Company
also accounted for NTL Communications and Rediffusion as discontinued
operations in the third and fourth quarter of 2002, respectively.

F-84



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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|5. |  | Recent Accounting Pronouncements (continued)
|-- |  | --------------------------------------------

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which is effective for the Company on January 1, 2003. This
Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible fixed assets and the associated
asset retirement costs. The adoption of this new standard is not expected to
have a significant effect on the results of operations, financial condition or
cash flows of the Company.

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination that is completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets. Instead,
these assets must be reviewed annually (or more frequently under certain
conditions) for impairment in accordance with this statement. This impairment
test uses a fair value approach rather than the undiscounted cash flow approach
previously required by SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. Old NTL
adopted SFAS No. 141 and SFAS No. 142 on January 1, 2002. Primarily due to the
significant impairment charge that Old NTL recorded in 2001, the adoption of
this new standard did not result in an impairment upon adoption. Amortization
of goodwill and license acquisition costs ceased effective January 1, 2002.
See Note 8.



|6. |  | Asset Impairments
|-- |  | -----------------

Asset impairment charges were $854.3 million in the year ended December 31,
2002 and almost exclusively apply to the Cablecom operations. These charges
are non-cash charges to write-down certain assets to their estimated fair
values based on an assessment that their carrying value was not recoverable.
These charges include fixed assets of $1.0 million, goodwill of $841.0 million
and other assets of $12.3 million. The charge with respect to fixed assets was
estimated based upon the technological obsolescence of certain network and
other equipment. The charge with respect to goodwill was determined in
accordance with SFAS No. 142.

As of December 31, 2001, Old NTL performed an analysis of the carrying values
of its long-lived assets including goodwill. During 1999 and 2000, acquisitions
were made against a background of increasing consolidation and record
valuations in the telecommunications industry. This analysis was initiated
because of the decline in Old NTLs stock price and significantly lower
valuations for companies within its industry. Additionally, at the time of Old
NTLs analysis, the book value of Old NTLs net assets significantly exceeded
its market capitalization. Accordingly, Old NTL performed an analysis of the
recoverability of its long-lived assets and associated goodwill. The fair
value of Old NTLs assets was determined by discounting Old NTLs estimates of
the expected future cash flows related to these investments when the
non-discounted cash flows indicated that the long-lived assets would not be
recoverable. Old NTL recorded a write-down of $9,511.3 million in the fourth
quarter of 2001 as a result of this analysis and review, of which $8,161.6
million is included in loss from discontinued operations, $912.1 million is
included in asset impairments and $437.6 million is included in share of losses
from equity investments. The asset impairment charge of $912.1 million
included goodwill of $762.7 million, investments in affiliates of $25.1 million
and other assets of $124.3 million.



|7. |  | Fixed Assets
|-- |  | ------------

Fixed assets consist of:

|                         |  |               |         |      |  |   |         |  
|------------------------ |  | ------------- | ------- | ---- |  | - | ------- | -
|                         |  | December 31, 
|                         |  |              
|                         |  | 2002          |         | 2001
|                         |  |               |         |     
|                         |  | (in millions)
|Operating equipment      |  | $             | 2,109.2 |      |  | $ | 1,691.4 |  
|Other equipment          |  |               | 109.1   |      |  |   | 64.4    |  
|Construction-in-progress |  |               | 25.1    |      |  |   | 2.8     |  
|                         |  |               |         |      |  |   |         |  
|                         |  |               | 2,243.4 |      |  |   | 1,758.6 |  
|Accumulated depreciation |  |               | (561.5  | )    |  |   | (264.0  | )
|                         |  |               |         |      |  |   |         |  
|                         |  | $             | 1,681.9 |      |  | $ | 1,494.6 |  
|                         |  |               |         |      |  |   |         |  

F-85



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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|8. |  | Cablecom Acquisition and Intangible Assets
|-- |  | ------------------------------------------

On March 28, 2000, Old NTL acquired the cable assets of the Cablecom group 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 Old NTLs issuance of $1,850.0 million of preferred
stock to France Telecom and a group of commercial banks. This acquisition was
accounted for as a purchase and, accordingly, the net assets and results of
operations of Cablecom have been included in the consolidated financial
statements from the date of acquisition. The aggregate purchase price of
$3,528.6 million, which includes costs incurred of $18.4 million, exceeded the
fair value of net tangible assets acquired by $2,282.2 million, which was
allocated as follows: $195.9 million to customer lists, $73.1 million to
deferred taxes and $2,159.4 million to goodwill.

The change in the carrying amount of goodwill during the year ended December
31, 2002 is as follows (in millions):

|                                                  |  |   |        |  
|------------------------------------------------- |  | - | ------ | -
|Goodwill  December 31, 2001                      |  | $ | 959.8  |  
|Impairment charge                                 |  |   | (841.0 | )
|Foreign currency exchange translation adjustments |  |   | 101.3  |  
|                                                  |  |   |        |  
|Goodwill  December 31, 2002                      |  | $ | 220.1  |  
|                                                  |  |   |        |  

Upon the adoption of SFAS No. 142, Old NTL performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separate from goodwill. Old NTL
also determined that no changes in the remaining useful lives of the customer
lists were required.

Old NTL also performed an evaluation for impairment of its goodwill as of
January 1, 2002 and determined that no impairment charge was required.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2002, as adjusted for the Companys emergence from
Chapter 11 reorganization, the adoption of fresh-start reporting, and prior to
the deconsolidation of Cablecom, would be approximately $10 million for each of
the next five years.

The following table shows the Companys net loss as adjusted for the adoption
of SFAS No. 142, had SFAS No. 142 been in effect on January 1 of each period
(unaudited) (in millions):

|                                              |          |   |              |   |      |   |          |       |  |   |        |       | 
|--------------------------------------------- | -------- | - | ------------ | - | ---- | - | -------- | ----- |  | - | ------ | ----- | 
|                                              |          |   | Year Ended  
|                                              |          |   | December 31,
|                                              |          |   |             
|                                              |          |   | 2002         |   | 2001 |   | 2000    
|                                              |          |   |              |   |      |   |         
|Loss from continuing operations  as reported |          | $ | (1,278.5     | ) |      | $ | (1,833.9 | )     |  | $ | (559.5 | )    
|Amortization of:                              |          |   |              |   |      |   |          |       |  |   |        |      
|                                              | Goodwill |   |              |  |      |   |          | 318.2 |  |   |        | 238.8 | 
|                                              | Other    |   |              |  |      |   |          | 32.8  |  |   |        | 0.8   | 
|                                              |          |   |              |   |      |   |          |       |  |   |        |      
|                                              |          |   |             |   |      |   | 351.0    |       |  |   | 239.6  |      
|                                              |          |   |              |   |      |   |          |       |  |   |        |      
|Loss from continuing operations  as adjusted |          | $ | (1,278.5     | ) |      | $ | (1,482.9 | )     |  | $ | (319.9 | )    
|                                              |          |   |              |   |      |   |          |       |  |   |        |      



|9. |  | Investments in and Loans to Affiliates
|-- |  | --------------------------------------

The Company has investments in various companies and joint ventures which are
accounted for under either the equity method or the cost method. The Companys
equity investments include its 50% interest in eKabel InvestCo, which owns 65%
of iesy Hessen GmbH (iesy), the largest cable television network in the
German province of Hessen, and its 34.01% interest in B2 (Bredband) AG (B2),
a company based in Sweden, which provides access to a broadband network that
provides transmission, both to and from the customer, at the same speed and at
the same time, but, as described more fully in this Form 10-K, the Company
entered into a settlement agreement on April 30, 2003, pursuant to which, among
other things, the Company agreed to sell all of its interest in B2 in the near
future.

F-86



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|9. |  | Investments in and Loans to Affiliates (continued)
|-- |  | --------------------------------------------------

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

B2 (Bredband)AG

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

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

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

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|9. |  | Investments in and Loans to Affiliates (continued)
|-- |  | --------------------------------------------------

Premium TV Limited

Premium TV, a wholly-owned subsidiary of NTL Delaware, is obliged to provide
funding of up to approximately £39 million ($62.8 million) to fund various of
its joint venture and other contractual interests. Of this amount, the payment
of approximately £26 million ($41.7 million) has been guaranteed by NTL
Delaware. If Premium TV fails to provide its committed funding under the
relevant shareholder arrangements relating to these joint ventures, Premium TV
and, in respect of the guaranteed amounts, NTL Delaware, may be sued for
non-payment. As a result of the recapitalization process, the relevant joint
venture partners may assert that they can compulsorily acquire Premium TVs
interest in the relevant joint venture at a third party appraisal valuation.
Premium TV is currently in discussions with certain of these joint venture
partners with a view to restructuring the relevant joint ventures. In the event
that these discussions do not reach a resolution acceptable to Premium TV,
Premium TV may seek to discontinue these joint ventures and terminate their
activities. The Company believes, however, that it has various defenses and
protections under the Bankruptcy Code against such actions and intends to
enforce vigorously its rights and protections.

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

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

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|9. |  | Investments in and Loans to Affiliates (continued)
|-- |  | --------------------------------------------------

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

|                         |  |                       |       |                   |  |           |     |         |  |  |       |   |  |   |       | 
|------------------------ |  | --------------------- | ----- | ----------------- |  | --------- | --- | ------- |  |  | ----- | - |  | - | ----- | 
|                         |  | December 31, 2002     |       | December 31, 2001
|                         |  |                       |       |                  
|                         |  | Ownership             |       | Balance           |  | Ownership |     | Balance
|                         |  |                       |       |                   |  |           |     |        
|                         |  | (dollars in millions)
|B2                       |  |                       | 34.01 | %                 |  | $         |    |         |  |  | 34.01 | % |  | $ | 92.5  | 
|iesy                     |  |                       | 32.50 | %                 |  |           |    |         |  |  | 32.50 | % |  |   | 73.0  | 
|Others                   |  |                       |       |                   |  |           |    |         |  |  |       |   |  |   | 44.0  | 
|                         |  |                       |       |                   |  |           |     |         |  |  |       |   |  |   |       | 
|Total equity investments |  |                       |       |                   |  |           |    |         |  |  |       |   |  |   | 209.5 | 
|Total cost investments   |  |                       |       |                   |  |           | 7.8 |         |  |  |       |   |  |   | 6.6   | 
|                         |  |                       |       |                   |  |           |     |         |  |  |       |   |  |   |       | 
|Total                    |  |                       |       |                   |  | $         | 7.8 |         |  |  |       |   |  | $ | 216.1 | 
|                         |  |                       |       |                   |  |           |     |         |  |  |       |   |  |   |       | 

The Company has reclassified $16.7 million of credit balances to Other
Long-Term Liabilities, which related to investments where the Company has
funding commitments and losses to date, which have exceeded the Companys
investment.

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

|                                           |  |               |       |              |  |   |         | 
|------------------------------------------ |  | ------------- | ----- | ------------ |  | - | ------- | 
|                                           |  | December 31,  |       | December 31,
|                                           |  | 2002          |       | 2001        
|                                           |  |               |       |             
|                                           |  | (in millions)
|Current assets                             |  | $             | 157.7 |              |  | $ | 284.9   | 
|Fixed assets, net                          |  |               | 414.5 |              |  |   | 391.7   | 
|Other assets                               |  |               | 385.2 |              |  |   | 801.4   | 
|                                           |  |               |       |              |  |   |         | 
|Total assets                               |  | $             | 957.4 |              |  | $ | 1,478.0 | 
|                                           |  |               |       |              |  |   |         | 
|Current liabilities                        |  | $             | 138.2 |              |  | $ | 185.5   | 
|Non current liabilities                    |  |               | 891.5 |              |  |   | 837.6   | 
|Total shareholders equity                 |  |               | (72.3 | )            |  |   | 454.9   | 
|                                           |  |               |       |              |  |   |         | 
|Total liabilities and shareholders equity |  | $             | 957.4 |              |  | $ | 1,478.0 | 
|                                           |  |               |       |              |  |   |         | 

|                 |  |               |        |      |  |      |        |   |  |   |        |  
|---------------- |  | ------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                 |  | Year Ended   
|                 |  | December 31  
|                 |  |              
|                 |  | 2002          |        | 2001 |  | 2000
|                 |  |               |        |      |  |     
|                 |  | (in millions)
|Revenues         |  | $             | 145.4  |      |  | $    | 126.2  |   |  | $ | 115.3  |  
|Operating (loss) |  |               | (431.5 | )    |  |      | (254.7 | ) |  |   | (225.1 | )
|Net (loss)       |  |               | (412.4 | )    |  |      | (374.5 | ) |  |   | (296.6 | )

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



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

Liabilities subject to compromise consist of the following:

|                        |                                       |       |      |               |         | 
|----------------------- | ------------------------------------- | ----- | ---- | ------------- | ------- | 
|                        |                                       |       |      | December 31, 
|                        |                                       |       |      | 2002         
|                        |                                       |       |      |              
|                        |                                       |       |      | (in millions)
|Interest payable        |                                       |       | 27.2 |              
|Accrued expenses        |                                       |       | 0.2  |              
|Payable to subsidiaries |                                       |       | 16.3 |              
|Long term debt:         |                                       |       |      |              
|                        | 5 3/4% Convertible Subordinated Notes |       |      | 1,200.0       |        
|                        |                                       |       |      |              
|                        |                                       | Total |      | $             | 1,243.7 | 
|                        |                                       |       |      |              

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



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

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

|                     |                                       |   |               |         |              |   |         |         | 
|-------------------- | ------------------------------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                     |                                       |   | December 31,  |         | December 31,
|                     |                                       |   | 2002          |         | 2001        
|                     |                                       |   |               |         |             
|                     |                                       |   | (in millions)
|                     | 5 3/4% Convertible Subordinated Notes |   | $             |        |              |   | $       | 1,200.0 | 
|Cablecom:            |                                       |   |               |         |              |   |         |        
|                     | Term Loan Facility                    |   |               | 1,951.8 |              |   |         | 1,626.8 | 
|                     | Revolving Facility                    |   |               | 762.7   |              |   |         | 527.2   | 
|                     | Other                                 |   |               | 4.8     |              |   |         | 6.2     | 
|                     |                                       |   |               |         |              |   |         |         | 
|                     |                                       |   | 2,719.3       |         |              |   | 3,360.2 |        
|Less current portion |                                       |   | 2,719.3       |         |              |   | 3,360.2 |        
|                     |                                       |   |               |         |              |   |         |         | 
|                     |                                       | $ |              |         |              | $ |        |        
|                     |                                       |   |               |         |              |   |         |         | 

NTL Delaware had $1,200.0 million 5 3/4% Convertible Subordinated Notes due
December 15, 2009 which were canceled on the Effective Date pursuant to the
Plan. Interest of 5 3/4% per annum was payable semiannually from June 15, 2000.
The notes were convertible into shares of Old NTLs common stock at a
conversion price of $108.18 per share.

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|11. |  | Long-Term Debt (continued)
|--- |  | --------------------------

In March 2000, Cablecom borrowed CHF 2,700.0 million ($1,951.8 million and
$1,626.8 million at December 31, 2002 and 2001, respectively) under its term
loan facility in connection with the acquisition of the Cablecom business.
Interest is payable at least every six months at Swiss LIBOR plus a margin rate
of 2.5% per annum, which is subject to adjustment. The effective interest rate
was 3.51% and 5.27% at December 31, 2002 and 2001, respectively. Although the
term loan facility was originally scheduled to mature on April 30, 2003, upon
the request of Cablecom, the maturity date has been extended to the business
day following May 31, 2003, with an additional automatic extension to June 30,
2003 under certain circumstances.

Cablecom had the option to draw on a revolving facility of up to an additional
CHF 1,400 million. The amount available had been capped at CHF 1,055 million
although the availability may be increased with the consent of the requisite
majority of the lenders. At December 31, 2002 and 2001, Cablecom had borrowed
CHF 1,055.0 million ($762.7 million) and CHF 875.0 million ($527.2 million),
respectively, and Cablecom has subsequently borrowed an additional CHF 37
million for accrued interest payments. Interest is payable at least every six
months at Swiss LIBOR plus a margin rate of 2.5% per annum, which is subject to
adjustment. The effective rate of interest was 3.71% and 5.49% at December 31,
2002 and 2001, respectively. The unused portion of the commitment is subject
to a commitment fee of 0.75% payable quarterly, which is reduced to 0.50% when
over 50% of the commitment is utilized. Although the revolving facility was
originally scheduled to mature on April 30, 2003, upon the request of Cablecom,
the maturity date has been extended to the business day following May 31, 2003,
with an additional automatic extension to June 30, 2003 under certain
circumstances.

As described in more detail in Note 21 (Commitments and Contingent Liabilities
 Cablecom), Cablecom does not have sufficient resources to satisfy these bank
obligations. In addition, Cablecom and two of its subsidiaries are
overindebted under Swiss law and, accordingly, may be required to file for
insolvency proceedings in Switzerland. Cablecom and its lenders have been
involved in ongoing discussions regarding a complete financial restructuring of
Cablecom which will, among other things, reduce the amount of bank debt
outstanding, extend the maturity date thereof and resolve the Swiss
overindebtedness issue. In the event that such negotiations are unsuccessful,
the Company expects to be deprived of all of its ownership interest in Cablecom
in the near future. Further, even if such negotiations are successful, the
Company expects to be left with no more than a small minority interest in
Cablecom. Accordingly, the Company anticipates that, in the near future, the
results of Cablecom will no longer be reported as part of the Companys
consolidated results of operations. In that regard, it should also be noted
that, in accordance with the terms of the existing Cablecom credit agreement,
no dividends, distributions or other payments have ever been or will be made by
Cablecom to the Company.

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

Long-term debt repayments are due as follows (in millions). The table reflects
the Companys contractual obligations as of December 31, 2002 as adjusted for
the emergence from Chapter 11 reorganization.

|                         |  |   |         | 
|------------------------ |  | - | ------- | 
|Year ending December 31: |  |   |         | 
|2003                     |  | $ | 2,714.7 | 
|2004                     |  |   | 0.9     | 
|2005                     |  |   | 0.1     | 
|2006                     |  |   | 0.1     | 
|2007                     |  |   | 0.1     | 
|Thereafter               |  |   | 3.4     | 
|                         |  |   |         | 
|Total debt repayments    |  |   | 2,719.3 | 
|Less: current portion    |  |   | 2,719.3 | 
|                         |  |   |         | 
|                         |  | $ |        | 
|                         |  |   |         | 

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|12. |  | Derivative Financial Instruments
|--- |  | --------------------------------

Effective January 1, 2001, Old NTL 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 loss, depending on whether a derivative is designated as a fair
value or cash flow hedge. The ineffective portion of all hedges is recognized
in the results of operations. Beginning in October 1, 2001, Old NTL has
recorded the change in the fair value of derivatives related to changes in time
value each period in other comprehensive loss for certain qualifying cash flow
hedges.

On January 1, 2001, Old NTL and its subsidiaries recorded all of their
outstanding derivative instruments at their fair value. The outstanding
derivative instruments were comprised of a number of zero cost collars to hedge
exposure to floating interest rates on certain of its debt. The aggregate fair
value on January 1, 2001 was a liability of $2.2 million, which was recorded as
other comprehensive loss.

At December 31, 2002, Cablecom had zero cost collars, with a notional amount of
CHF 1,200.0 million, to hedge exposure to the floating interest rate
indebtedness incurred under the Cablecom term loan facility and revolving loan
facility.



|13. |  | Non-Cash Compensation
|--- |  | ---------------------

In July 2001, the Compensation and Option Committee of Old NTLs Board of
Directors approved modifications to certain stock options. The latest possible
expiration date of options to purchase an aggregate of approximately 4.7
million shares of Old NTLs common stock with exercise prices from $0.17 to
$14.76 per share was extended from July 30, 2001 to October 2004, as
applicable, to January 30, 2006. Old NTL recognized non-cash compensation
expense of $30.6 million based on the excess of the quoted market price of Old
NTLs common stock on the date of the modification of $12.05 per share over the
exercise price per share. All options to purchase shares of Old NTLs common
stock were canceled on the Effective Date pursuant to the Plan.



|14. |  | Other Charges Including Restructuring Charges
|--- |  | ---------------------------------------------

Other charges of $3.5 million in 2002 are for the integration of acquired
companies, mostly related to information technology integration, as well as
costs incurred for business rationalization consulting. Other charges
of $12.1 million in 2001 include restructuring charges of
$6.8 million and costs of $5.3 million incurred primarily to integrate the acquired companies, mostly related
to information technology integration, as well as costs incurred for business
rationalization consulting.

Restructuring charges of $6.8 million for the year ended December 31, 2001
relates to Old NTLs actions to reorganize, re-size and reduce operating costs
and create greater efficiency in various areas. These costs were for
approximately 225 employees to be terminated, none of whom are still employed
by the Company as of December 31, 2002.

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|14. |  | Other Charges Including Restructuring Charges (continued)
|--- |  | ---------------------------------------------------------

The following table summarizes the restructuring charges incurred and utilized
in 2001 and 2002:

|                           |  |                   |      |  
|-------------------------- |  | ----------------- | ---- | -
|                           |  | Employee         
|                           |  | Severance        
|                           |  | and Related Costs
|                           |  |                  
|Charged to expense         |  | $                 | 6.8  |  
|Utilized                   |  |                   |     |  
|                           |  |                   |      |  
|Balance, December 31, 2001 |  |                   | 6.8  |  
|Utilized                   |  |                   | (4.6 | )
|                           |  |                   |      |  
|Balance, December 31, 2002 |  | $                 | 2.2  |  
|                           |  |                   |      |  



|15. |  | Income Taxes
|--- |  | ------------

Significant components of the provision/(benefit) for income taxes attributable
to continuing operations consists of the following:

|               |         |   |                         |        |      |   |       |       |   |   |       |       |  
|-------------- | ------- | - | ----------------------- | ------ | ---- | - | ----- | ----- | - | - | ----- | ----- | -
|               |         |   | Year Ended December 31,
|               |         |   |                        
|               |         |   | 2002                    |        | 2001 |   | 2000 
|               |         |   |                         |        |      |   |      
|               |         |   | (in millions)          
|Current:       |         |   |                         |        |      |   |       |       |   |   |       |      
|               | Federal |   | $                       | (4.6   | )    |   | $     |      |   |   | $     |      |  
|               | Foreign |   |                         | 3.4    |      |   |       | 0.3   |   |   |       |      |  
|               |         |   |                         |        |      |   |       |       |   |   |       |       |  
|Total current  |         |   | (1.2                    | )      |      |   | 0.3   |       |   |   |      |      
|               |         |   |                         |        |      |   |       |       |   |   |       |       |  
|Deferred:      |         |   |                         |        |      |   |       |       |   |   |       |      
|               | Foreign |   |                         | (128.2 | )    |   |       | (51.3 | ) |   |       | (23.2 | )
|               |         |   |                         |        |      |   |       |       |   |   |       |       |  
|Total deferred |         |   | (128.2                  | )      |      |   | (51.3 | )     |   |   | (23.2 | )    
|               |         |   |                         |        |      |   |       |       |   |   |       |       |  
|               |         | $ | (129.4                  | )      |      | $ | (51.0 | )     |   | $ | (23.2 | )    
|               |         |   |                         |        |      |   |       |       |   |   |       |       |  

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|15. |  | Income Taxes (continued)
|--- |  | ------------------------

The Companys deferred tax benefit relates primarily to operating loss
carryforwards for which benefit was recognized to the extent of deferred tax
liabilities. In addition, during the year ended December 31, 2002, Old NTL
merged certain Swiss subsidiaries and identified additional tax losses within
the merged entity, which allowed Old NTL to recognize a deferred tax benefit
for tax losses to the extent that the tax losses offset existing deferred tax
liabilities of the newly merged entity. The federal current benefit relates to
utilization of operating losses to offset income from discontinued operations
related to the sale of NTL Australia.

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

|                                            |                      |   |               |       |      |   |        |       | 
|------------------------------------------- | -------------------- | - | ------------- | ----- | ---- | - | ------ | ----- | 
|                                            |                      |   | December 31, 
|                                            |                      |   |              
|                                            |                      |   | 2002          |       | 2001
|                                            |                      |   |               |       |     
|                                            |                      |   | (in millions)
|Deferred tax liabilities:                   |                      |   |               |       |      |   |        |      
|                                            | Intangibles          |   | $             | 15.9  |      |   | $      | 23.0  | 
|                                            | Fixed assets         |   |               | 137.4 |      |   |        | 139.4 | 
|                                            | Accounts receivable  |   |               | 78.0  |      |   |        |      | 
|                                            | Other                |   |               | 0.3   |      |   |        | 2.2   | 
|                                            |                      |   |               |       |      |   |        |       | 
|Total deferred tax liabilities              |                      |   | 231.6         |       |      |   | 164.6  |      
|Deferred tax assets:                        |                      |   |               |       |      |   |        |      
|                                            | Net operating losses |   |               | 751.9 |      |   |        | 174.9 | 
|                                            | Investment and other |   |               | 65.9  |      |   |        | 46.0  | 
|                                            |                      |   |               |       |      |   |        |       | 
|Total deferred tax assets                   |                      |   | 817.8         |       |      |   | 220.9  |      
|Valuation allowance for deferred tax assets |                      |   | (616.9        | )     |      |   | (200.5 | )    
|                                            |                      |   |               |       |      |   |        |       | 
|Net deferred tax assets                     |                      |   | 200.9         |       |      |   | 20.4   |      
|                                            |                      |   |               |       |      |   |        |       | 
|Net deferred tax (assets) liabilities       |                      | $ | 30.7          |       |      | $ | 144.2  |      
|                                            |                      |   |               |       |      |   |        |       | 

At December 31, 2002, Old NTL 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, 2002, Old NTL had net operating loss carryforwards of
approximately $300 million for U.S. federal income tax purposes that expire in
varying amounts commencing in 2009. Old NTL also has Swiss net operating loss
carryforwards of approximately $2.5 billion that expire in varying amounts
commencing in 2008.

As discussed in Note 1, the Company emerged from Chapter 11 bankruptcy on
January 10, 2003. A restructuring of the Companys debt will give rise to
cancellation of indebtedness income (COD) in 2003, which will be non-taxable
since the debt cancellation is in connection with a bankruptcy reorganization.
However, to the extent that such amount is excluded from U.S. taxable income,
certain tax attributes are subject to reduction, including certain U.S. net
operating loss carryforwards and U.S. capital loss carryforwards. The
reduction of tax attributes should have no material impact on the Companys
financial statement position since the deferred tax assets related to these tax
attributes are offset by a corresponding valuation allowance. Furthermore, the
reorganization will cause an ownership change pursuant to Internal Revenue Code
Section 382. Section 382 will severely limit the Companys ability to utilize
any remaining U.S. net operating loss carryforwards and may limit the Companys
ability to deduct any built-in losses recognized within the subsequent
five-year period.

In 2002, the Internal Revenue Service completed its federal income tax audit of
Old NTL for the years 1996, 1997 and 1998. The audit resulted in a reduction
in U.S. net operating loss carryforwards that had no material impact on the
Company.

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|15. |  | Income Taxes (continued)
|--- |  | ------------------------

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

|                                                             |                                  |   |                         |       |      |   |        |       |  |   |        |       |  
|------------------------------------------------------------ | -------------------------------- | - | ----------------------- | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- | -
|                                                             |                                  |   | Year Ended December 31,
|                                                             |                                  |   |                        
|                                                             |                                  |   | 2002                    |       | 2001 |   | 2000  
|                                                             |                                  |   |                         |       |      |   |       
|                                                             |                                  |   | (in millions)          
|Expected tax expense/benefit at federal statutory
rate (35%) |                                  | $ | (493.2                  | )     |      | $ | (659.7 | )     |  | $ | (203.9 | )    
|Increase/(decrease) resulting from:                          |                                  |   |                         |       |      |   |        |       |  |   |        |      
|                                                             | Non-deductible asset impairments |   |                         | 299.0 |      |   |        | 323.2 |  |   |        |      |  
|                                                             | Foreign losses with no benefit   |   |                         | (0.1  | )    |   |        | 171.5 |  |   |        | 200.3 |  
|                                                             | U.S. losses with no benefits     |   |                         | 61.8  |      |   |        | 113.8 |  |   |        | (19.6 | )
|                                                             | Other                            |   |                         | 2.9   |      |   |        | 0.2   |  |   |        |      |  
|                                                             |                                  |   |                         |       |      |   |        |       |  |   |        |      
|                                                             |                                  | $ | (129.4                  | )     |      | $ | (51.0  | )     |  | $ | (23.2  | )    
|                                                             |                                  |   |                         |       |      |   |        |       |  |   |        |      



|16. |  | Fair Values of Financial Instruments
|--- |  | ------------------------------------

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

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

Marketable securities:The carrying amounts reported in the consolidated
balance sheets approximate fair value.

Long-term debt:The December 31, 2001 carrying amounts of the Old NTL
bank credit facilities approximate their fair values. The fair values
presented for the credit facilities at December 31, 2002, represent the values
calculated in accordance with the application of fresh-start accounting, used
in connection with the Companys emergence from bankruptcy. The fair values
of Old NTLs other now-canceled debt at December 31, 2001 were based on their
quoted market prices. At December 31, 2002, the fair value of the Convertible
Notes, represents the approximate distribution value, which the holders of
such debt received upon the Companys emergence from bankruptcy on January 10,
2003.

The carrying amounts and fair values of Old NTLs financial instruments are as
follows:

|                          |                          |   |                   |         |                   |   |          |         |       |   |      |         |  |   |      |         | 
|------------------------- | ------------------------ | - | ----------------- | ------- | ----------------- | - | -------- | ------- | ----- | - | ---- | ------- |  | - | ---- | ------- | 
|                          |                          |   | December 31, 2002 |         | December 31, 2001
|                          |                          |   |                   |         |                  
|                          |                          |   | Carrying          |         | Fair              |   | Carrying |         | Fair 
|                          |                          |   | Amount            |         | Value             |   | Amount   |         | Value
|                          |                          |   |                   |         |                   |   |          |         |      
|                          |                          |   | (in millions)    
|Cash and cash equivalents |                          | $ | 204.9             |         |                   | $ | 204.9    |         |       | $ | 91.0 |         |  | $ | 91.0 |        
|Marketable securities     |                          |   | 13.1              |         |                   |   | 13.1     |         |       |   |     |         |  |   |     |        
|Long-term debt:           |                          |   |                   |         |                   |   |          |         |       |   |      |         |  |   |      |        
|                          | 5 3/4% Convertible Notes |   |                   | 1,200.0 |                   |   |          | 250.8   |       |   |      | 1,200.0 |  |   |      | 132.0   | 
|                          | Term loan facility       |   |                   | 1,951.8 |                   |   |          | 1,031.4 |       |   |      | 1,626.8 |  |   |      | 1,626.8 | 
|                          | Revolving facility       |   |                   | 762.7   |                   |   |          | 403.0   |       |   |      | 527.2   |  |   |      | 527.2   | 

F-95



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|17. |  | Related Party Transactions
|--- |  | --------------------------

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

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

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

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

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

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

Certain former officers and directors of Old NTL were also officers and
directors of ATX Communications, Inc. (ATX) (formerly known as CoreComm
Holdco, Inc.). On April 12, 2001, Old NTL purchased $15.0 million of an
unsecured convertible note from ATX and received warrants to purchase 770,000
shares of ATX common stock at an exercise price of $0.01 per share that expire
in April 2011. In addition, concurrently with the note purchase and without
additional compensation, Old NTL entered into a network and software agreement
with ATX, which agreement is now with New NTL. Under the agreement, ATX will provide U.S. network for Internet
traffic from New NTLs UK customers for three years, as well as a royalty free
license to use certain billing and provisioning software and know-how.
Interest on the notes is at 10.75% per annum, payable semiannually beginning on
October 15, 2001. The interest is payable in kind by the issuance of
additional notes in such principal amount equal to the interest payment that is
then due. The notes are convertible into ATX common stock prior to maturity at
a conversion price of $1.00 per share, subject to adjustment. Additional notes
issued for interest will have an initial conversion price equal to 120% of the
weighted average closing price of ATX common stock for a specified period. Old
NTL and ATX agreed to certain modifications to the conversion feature in
connection with ATXs recapitalization in December 2001.

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

F-96



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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)



|17. |  | Related Party Transactions (continued)
|--- |  | --------------------------------------

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



|18. |  | Shareholders Equity
|--- |  | --------------------

Sales of Preferred Stock, Common Stock and Warrants

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% Cumulative
Participating Convertible 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 sated value per share. Dividends were payable when and if declared by the
Board of Directors.

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

|                                    |  |             |   |          |  |          |          |       |  |    |         |   |  |  |          |   |  |  |          |  
|----------------------------------- |  | ----------- | - | -------- |  | -------- | -------- | ----- |  | -- | ------- | - |  |  | -------- | - |  |  | -------- | -
|                                    |  | Convertible |   | 9.9%     |  | 9.9%     |          |       |  |    |         |   |  | 
|                                    |  | Series A    |   | Series A |  | Series B |          | 5.25% |  | 5%
|                                    |  |             |   |          |  |          |          |       |  |   
|Balance, December 31, 1998          |  |             |  |          |  |          | 125,000  |       |  |    | 52,000  |   |  |  |         |   |  |  |         |  
|Issued for cash                     |  |             |  |          |  |          |         |       |  |    |        |   |  |  | 500,000  |   |  |  | 750,000  |  
|Issued for dividends                |  |             |  |          |  |          |         |       |  |    |        |   |  |  | 25,000   |   |  |  | 5,000    |  
|Redemption                          |  |             |  |          |  |          | (125,000 | )     |  |    |        |   |  |  |         |   |  |  |         |  
|                                    |  |             |   |          |  |          |          |       |  |    |         |   |  |  |          |   |  |  |          |  
|Balance, December 31, 1999          |  |             |  |          |  |          |         |       |  |    | 52,000  |   |  |  | 525,000  |   |  |  | 755,000  |  
|Issued for dividends                |  |             |  |          |  |          |         |       |  |    |        |   |  |  | 3,000    |   |  |  | 19,000   |  
|Conversion into common stock        |  |             |  |          |  |          |         |       |  |    |        |   |  |  | (528,000 | ) |  |  |         |  
|Corporate restructuring             |  |             |  |          |  |          |         |       |  |    | (52,000 | ) |  |  |         |   |  |  | (774,000 | )
|                                    |  |             |   |          |  |          |          |       |  |    |         |   |  |  |          |   |  |  |          |  
|Balance, December 31, 2001 and 2000 |  |             |  |          |  |          |         |       |  |    |        |   |  |  |         |   |  |  |         |  
|                                    |  |             |   |          |  |          |          |       |  |    |         |   |  |  |          |   |  |  |          |  

F-97



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Stock Options

All of Old NTLs outstanding stock options were canceled on the Effective Date
pursuant to the Plan. The stock option plans described below covered certain
of the Companys employees, as well as employees of the discontinued
operations.

There were 335,000 shares and 2,733,000 shares of common stock reserved for
issuance under the 1991 Stock Option Plan and the 1993 Stock Option Plan,
respectively. These plans provided that incentive stock options (ISOs) would
be granted at the fair market value of Old NTLs common stock on the date of
grant, and nonqualified stock options (NQSOs) would be granted at not less
than 85% of the fair market value of Old NTLs common stock on the date of
grant. Options were exercisable as to 20% of the shares subject thereto on the
date of grant and became exercisable as to an additional 20% of the shares
subject thereto on each January 1 thereafter, while the optionee remained an
employee of Old NTL. Options expired ten years after the date of the grant.

There were 16,000 shares and 67,000 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 would be granted to
members of the Board of Directors who were not employees of Old NTL or any of
its affiliates. These plans provided that all options would be granted at the
fair market value of Old NTLs common stock on the date of grant, and options
would expire ten years after the date of the grant. Options were exercisable as
to 20% of the shares subject thereto on the date of grant and became
exercisable as to an additional 20% of the shares subject thereto on each
subsequent anniversary of the grant date while the optionee remained a director
of Old NTL. Options expired ten years after the date of the grant.

There were 19,684,000 shares of common stock reserved for issuance under the
1998 Non-Qualified Stock Option Plan. The exercise price of a NQSO would have
been determined by the Compensation and Option Committee. Options were
generally exercisable ratably over five to ten years while the optionee
remained an employee of Old NTL. Options expired ten years after the date of
the grant.

In December 2000, the Board of Directors of Old NTL approved the rescission of
the exercise of ISOs for 156,000 shares of Old NTLs common stock, and Old NTL
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, Old NTL 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 Old NTL 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 2002, 2001 and 2000: risk-free interest rates of 4.47%, 4.47%
and 5.30%, respectively, dividend yield of 0%, volatility factor of the
expected market price of Old NTLs common stock of .702, .702 and .385,
respectively, and a weighted-average expected life of the option of 10 years.

F-98



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

18. Shareholders Equity (continued)

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 Old NTLs stock options have characteristics significantly different
from those of traded options and because changes in the subjective input
assumptions can materially affect the fair value estimate, in managements
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options vesting period. The effects of
applying SFAS No. 123 on pro forma disclosures of net loss and net loss per
share for the years ended December 31, 2002, 2001 and 2000 are not likely to be
representative of the pro forma effects on net loss and net loss per share in
future years. Had compensation for stock options granted by Old NTL been
determined consistent with the provisions of SFAS No. 123, the effect on the
Companys net loss would have been changed to the following pro forma amounts:

|                     |  |                                      |          |      |  |      |           |   |  |   |          |  
|-------------------- |  | ------------------------------------ | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                     |  | Year Ended December 31,             
|                     |  |                                     
|                     |  | 2002                                 |          | 2001 |  | 2000
|                     |  |                                      |          |      |  |     
|                     |  | (in millions, except per share data)
|Net (loss)           |  | $                                    | (3,658.6 | )    |  | $    | (13,706.8 | ) |  | $ | (2,967.0 | )
|Pro forma net (loss) |  | $                                    | (3,922.9 | )    |  | $    | (13,975.1 | ) |  | $ | (3,222.8 | )

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

|                                |  |               |      |               |  |               |       |          |  |           |      |           |  |   |       |  |  |           |      |   |  |   |       | 
|------------------------------- |  | ------------- | ---- | ------------- |  | ------------- | ----- | -------- |  | --------- | ---- | --------- |  | - | ----- |  |  | --------- | ---- | - |  | - | ----- | 
|                                |  | 2002          |      | 2001          |  | 2000         
|                                |  |               |      |               |  |              
|                                |  |               |      |               |  | Weighted-     |       |          |  |           |      | Weighted- |  |   |       |  |  | Weighted-
|                                |  |               |      |               |  | Average       |       |          |  |           |      | Average   |  |   |       |  |  | Average  
|                                |  | Number of     |      | Exercise      |  | Number of     |       | Exercise |  | Number of |      | Exercise 
|                                |  | Options       |      | Price         |  | Options       |       | Price    |  | Options   |      | Price    
|                                |  |               |      |               |  |               |       |          |  |           |      |          
|                                |  | (in millions) |      | (in millions) |  | (in millions)
|Outstanding  beginning of year |  |               | 71.9 |               |  | $             | 36.13 |          |  |           | 61.4 |           |  | $ | 41.52 |  |  |           | 29.2 |   |  | $ | 24.60 | 
|Granted                         |  |               |     |               |  |               |      |          |  |           | 14.3 |           |  |   | 12.55 |  |  |           | 34.8 |   |  |   | 54.90 | 
|Exercised                       |  |               |     |               |  |               |      |          |  |           | (1.1 | )         |  |   | 11.93 |  |  |           | (2.1 | ) |  |   | 17.13 | 
|Forfeited                       |  |               | (3.7 | )             |  |               | 39.09 |          |  |           | (2.7 | )         |  |   | 42.46 |  |  |           | (0.5 | ) |  |   | 83.31 | 
|                                |  |               |      |               |  |               |       |          |  |           |      |           |  |   |       |  |  |           |      |   |  |   |       | 
|Outstanding  end of year       |  |               | 68.2 |               |  | $             | 36.06 |          |  |           | 71.9 |           |  | $ | 36.13 |  |  |           | 61.4 |   |  | $ | 41.52 | 
|                                |  |               |      |               |  |               |       |          |  |           |      |           |  |   |       |  |  |           |      |   |  |   |       | 
|Exercisable at end of year      |  |               | 34.3 |               |  | $             | 30.37 |          |  |           | 24.7 |           |  | $ | 27.50 |  |  |           | 16.3 |   |  | $ | 21.82 | 
|                                |  |               |      |               |  |               |       |          |  |           |      |           |  |   |       |  |  |           |      |   |  |   |       | 

Weighted-average fair value of options, calculated using the Black-Scholes
option pricing model, granted during 2002, 2001 and 2000 is $5.69, $5.69 and
$32.19 respectively.

F-99



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

18. Shareholders Equity (continued)

The following table summarizes the status of the stock options outstanding and
exercisable at December 31, 2002:

|                 |  |           |      |                           |      |                           |  |           |        |           |  |  |     |               |  |           |        |  |  |  |  | 
|---------------- |  | --------- | ---- | ------------------------- | ---- | ------------------------- |  | --------- | ------ | --------- |  |  | --- | ------------- |  | --------- | ------ |  |  |  |  | 
|                 |  |           |      | Stock Options Outstanding |      | Stock Options Exercisable
|                 |  |           |      |                           |      |                          
|                 |  |           |      |                           |      |                           |  | Weighted- |        | Weighted- |  |  |     |               |  | Weighted-
|                 |  |           |      |                           |      |                           |  | Remaining |        | Average   |  |  |     |               |  | Average  
|Range of         |  | Number of |      | Contractual               |      | Exercise                  |  | Number of |        | Exercise 
|Exercise Prices  |  | Options   |      | Life                      |      | Price                     |  | Options   |        | Price    
|                 |  |           |      |                           |      |                           |  |           |        |          
|                 |  |           |      | (in millions)             |      |                           |  |           |        |           |  |  |     | (in millions) |  |           |        | 
|$  0.35 to $9.36 |  |           | 4.4  |                           |      | 3.1 Years                 |  | $         | 5.434  |           |  |  | 4.3 |               |  | $         | 5.434  | 
|$10.00 to $18.40 |  |           | 14.8 |                           |      | 4.2 Years                 |  | $         | 11.136 |           |  |  | 8.0 |               |  | $         | 12.082 | 
|$19.86 to $27.84 |  |           | 12.9 |                           |      | 6.6 Years                 |  | $         | 23.395 |           |  |  | 8.2 |               |  | $         | 23.305 | 
|$28.06 to $35.64 |  |           | 0.6  |                           |      | 6.3 Years                 |  | $         | 30.372 |           |  |  | 0.5 |               |  | $         | 30.477 | 
|$36.12 to $40.19 |  |           | 0.8  |                           |      | 7.2 Years                 |  | $         | 38.823 |           |  |  | 0.5 |               |  | $         | 38.629 | 
|$42.44 to $47.44 |  |           | 13.0 |                           |      | 7.4 Years                 |  | $         | 44.437 |           |  |  | 4.5 |               |  | $         | 44.397 | 
|$48.38 to $53.76 |  |           | 4.6  |                           |      | 6.6 Years                 |  | $         | 50.383 |           |  |  | 3.2 |               |  | $         | 50.400 | 
|$57.60 to $63.63 |  |           | 16.6 |                           |      | 6.8 Years                 |  | $         | 63.409 |           |  |  | 4.7 |               |  | $         | 62.986 | 
|$68.20 to $75.56 |  |           | 0.1  |                           |      | 7.1 Years                 |  | $         | 75.413 |           |  |  | 0.1 |               |  | $         | 75.401 | 
|$91.13 to $97.50 |  |           | 0.4  |                           |      | 7.1 Years                 |  | $         | 93.713 |           |  |  | 0.3 |               |  | $         | 93.713 | 
|                 |  |           |      |                           |      |                           |  |           |        |           |  |  |     |               |  |           |        |  |  | 
|                 |  | Total     |      |                           | 68.2 |                           |  |           |        |           |  |  |     |               |  |           | 34.3   |  |  |  |  | 
|                 |  |           |      |                           |      |                           |  |           |        |           |  |  |     |               |  |           |        |  |  | 

As of December 31, 2002, Old NTL had 171.8 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, all of which have now been canceled.

19. Employee Benefit Plans

Cablecom operates a defined benefit pension plan in Switzerland. The assets of
the Plan 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.

F-100



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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Employee Benefit Plans (continued)

At December 31, 2002, the projected benefit obligations of Old NTLs defined
benefit pension plans exceeded the fair value of the plan assets by $44.5
million. The projected benefit obligations, accumulated benefit obligations
and fair value of plan assets were $156.4 million, $125.1 million and $112.0
million, respectively, at December 31, 2002.

|                                                                      |  |               |       |      |  |   |       |  
|--------------------------------------------------------------------- |  | ------------- | ----- | ---- |  | - | ----- | -
|                                                                      |  | Year Ended   
|                                                                      |  | December 31, 
|                                                                      |  |              
|                                                                      |  | 2002          |       | 2001
|                                                                      |  |               |       |     
|                                                                      |  | (in millions)
|Change in benefit obligation                                          |  |               |       |      |  |   |       |  
|Benefit obligation at beginning of year                               |  | $             | 145.7 |      |  | $ | 122.2 |  
|Disposition                                                           |  |               | (21.8 | )    |  |   |      |  
|Service cost                                                          |  |               | 7.4   |      |  |   | 7.4   |  
|Interest cost                                                         |  |               | 6.3   |      |  |   | 5.5   |  
|Actuarial losses (gains)                                              |  |               | 10.3  |      |  |   | 12.4  |  
|Benefits paid                                                         |  |               | (4.2  | )    |  |   | (3.1  | )
|Foreign currency exchange rate changes                                |  |               | 12.7  |      |  |   | 1.2   |  
|                                                                      |  |               |       |      |  |   |       |  
|Benefit obligation at end of year                                     |  | $             | 156.4 |      |  | $ | 145.6 |  
|                                                                      |  |               |       |      |  |   |       |  
|Change in plan assets                                                 |  |               |       |      |  |   |       |  
|Fair value of plan assets at beginning of year                        |  | $             | 142.3 |      |  | $ | 151.0 |  
|Disposition                                                           |  |               | (15.8 | )    |  |   |      |  
|Actual return on plan assets                                          |  |               | (30.9 | )    |  |   | (15.0 | )
|Company contributions                                                 |  |               | 4.7   |      |  |   | 4.5   |  
|Plan participants contributions                                      |  |               | 3.5   |      |  |   | 3.4   |  
|Benefits paid                                                         |  |               | (4.2  | )    |  |   | (3.1  | )
|Foreign currency exchange rates changes                               |  |               | 12.4  |      |  |   | 1.5   |  
|                                                                      |  |               |       |      |  |   |       |  
|Fair value of plan assets at end of year                              |  | $             | 112.0 |      |  | $ | 142.3 |  
|                                                                      |  |               |       |      |  |   |       |  
|Funded status of the plan                                             |  | $             | (44.5 | )    |  | $ | (3.4  | )
|Unrecognized net actuarial (gains) losses                             |  |               | 61.3  |      |  |   | 17.8  |  
|Unrecognized transition obligation                                    |  |               | 0.5   |      |  |   | 0.8   |  
|                                                                      |  |               |       |      |  |   |       |  
|Net amount recognized                                                 |  | $             | 17.3  |      |  | $ | 15.2  |  
|                                                                      |  |               |       |      |  |   |       |  
|Amounts recognized in the statement of financial position consist of: |  |               |       |      |  |   |       |  
|Prepaid benefit cost                                                  |  | $             | 16.8  |      |  | $ | 14.4  |  
|Accrued benefit liability                                             |  |               | (30.5 | )    |  |   |      |  
|Intangible asset                                                      |  |               | 1.0   |      |  |   | 0.8   |  
|Accumulated other comprehensive loss                                  |  |               | 30.0  |      |  |   |      |  
|                                                                      |  |               |       |      |  |   |       |  
|Net amount recognized                                                 |  | $             | 17.3  |      |  | $ | 15.2  |  
|                                                                      |  |               |       |      |  |   |       |  

|                       |                                                  |  |                         |      |      |  |  |      |  
|---------------------- | ------------------------------------------------ |  | ----------------------- | ---- | ---- |  |  | ---- | -
|                       |                                                  |  | Year Ended December 31,
|                       |                                                  |  |                        
|                       |                                                  |  | 2002                    |      | 2001
|                       |                                                  |  |                         |      |     
|Actuarial assumptions: |                                                  |  |                         |      |      |  |  |     
|                       | Discount rate                                    |  |                         | 4.00 | %    |  |  | 4.50 | %
|                       | Rate of compensation increase                    |  |                         | 1.00 | %    |  |  | 2.00 | %
|                       | Expected long-term rate of return on plan assets |  |                         | 4.00 | %    |  |  | 5.50 | %

F-101



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

19. Employee Benefit Plans (continued)

The components of net pension costs are as follows:

|                                 |  |                         |      |      |  |      |      |   |  |   |       |  
|-------------------------------- |  | ----------------------- | ---- | ---- |  | ---- | ---- | - |  | - | ----- | -
|                                 |  | Year Ended December 31,
|                                 |  |                        
|                                 |  | 2002                    |      | 2001 |  | 2000
|                                 |  |                         |      |      |  |     
|                                 |  | (in millions)          
|Service cost                     |  | $                       | 7.4  |      |  | $    | 7.4  |   |  | $ | 6.1   |  
|Interest cost                    |  |                         | 6.3  |      |  |      | 5.5  |   |  |   | 5.5   |  
|Expected return on plan assets   |  |                         | (6.3 | )    |  |      | (8.7 | ) |  |   | (13.7 | )
|Plan participants contributions |  |                         | (3.5 | )    |  |      | (3.4 | ) |  |   | (2.8  | )
|Net amortization and deferral    |  |                         |     |      |  |      | (0.5 | ) |  |   | 4.0   |  
|                                 |  |                         |      |      |  |      |      |   |  |   |       |  
|                                 |  | $                       | 3.9  |      |  | $    | 0.3  |   |  | $ | (0.9  | )
|                                 |  |                         |      |      |  |      |      |   |  |   |       |  

20. Leases

Future minimum annual payments at December 31, 2002 are as follows (in
millions). The table reflects Old NTLs contractual obligations.

|                             |  |           |      | 
|---------------------------- |  | --------- | ---- | 
|                             |  | Operating
|                             |  | Leases   
|                             |  |          
|Year ending December 31:     |  |           |      | 
|2003                         |  | $         | 4.8  | 
|2004                         |  |           | 5.1  | 
|2005                         |  |           | 5.1  | 
|2006                         |  |           | 5.3  | 
|2007                         |  |           | 5.5  | 
|Thereafter                   |  |           | 6.9  | 
|                             |  |           |      | 
|Total minimum lease payments |  | $         | 32.7 | 
|                             |  |           |      | 

Leases for buildings, office space and equipment extend through 2019. Total
rental expense for the years ended December 31, 2002, 2001 and 2000 under
operating leases was $7.0 million, $16.4 million and $10.0 million,
respectively.

21. Commitments and Contingent Liabilities

At December 31, 2002, Old NTL was committed to pay approximately $121.8 million
for equipment and services and for investments in and loans to affiliates.
This amount included approximately $48.7 million for operations and other
commitments from January 1, 2004 to 2013. The aggregate amount of the fixed
and determinable portion of these obligations for the succeeding fiscal years
is as follows (in millions):

|     |  |              |      | 
|---- |  | ------------ | ---- | 
|     |  | Year Ending 
|     |  | December 31:
|     |  |             
|2003 |  | $            | 73.1 | 
|2004 |  |              | 9.2  | 
|2005 |  |              | 9.2  | 
|2006 |  |              | 1.4  | 
|2007 |  |              | 1.4  | 
|     |  |              |      | 
|     |  | $            | 94.3 | 
|     |  |              |      | 

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.

F-102



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

21. Commitments and Contingent Liabilities (continued)

Morgan Stanley

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

B2 (Bredband) AG

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

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

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

Cablecom

Cablecom is the principal borrower under an amended and restated credit
agreement dated as of April 30, 2002 and effective as of May 2, 2002. Under
the credit agreement, Cablecom and one of its subsidiaries are indebted in an
amount of approximately CHF 3,792 million (which includes recent accrued
interest payments). Although the credit facility was originally scheduled to
mature on April 30, 2003, upon the request of Cablecom, the maturity date has
been extended to the business day following May 31, 2003, with an additional
automatic extension to June 30, 2003 under certain circumstances. In addition,
Cablecom has been notified by the lenders that it is in default under the
credit agreement. Accordingly, the lenders could seek to accelerate the
maturity of the credit facility at any time.

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

F-103



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

21. Commitments and Contingent Liabilities (continued)

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

In order to seek to address the foregoing issues, Cablecom is currently in
negotiations with its lenders regarding an overall financial restructuring of
Cablecom. If consummated, such restructuring is expected to include a
reduction in the amount of debt outstanding, an extension of maturity date of
such debt and control of Cablecom being assumed by the lenders. As part of
such negotiations, the Company is seeking to retain a small minority interest
in Cablecom in consideration for its cooperation in permitting Cablecom to
reach a consensual restructuring plan with its lenders. There is, however, no
assurance that such negotiations will be successful. Further, whether or not
such negotiations are successful, the Company expects to be deprived of the
Companys controlling interest in Cablecom in the near future. After such
occurrence, the results of Cablecom will not be reported as part of the
Companys consolidated results of operations.

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

22. Geographic Information

|                  |  |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|----------------- |  | ------------- | ---- | ----------- |  | ----- | ------- | ----- |  | - | ----- |  |  | - | ------- | 
|                  |  | United States |      | Switzerland |  | Other |         | Total
|                  |  |               |      |             |  |       |         |      
|                  |  | (in millions)
|2002              |  |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|Revenues          |  | $             |     |             |  | $     | 401.6   |       |  | $ | 30.6  |  |  | $ | 432.2   | 
|Long-lived assets |  |               | 19.1 |             |  |       | 2,196.8 |       |  |   | 74.9  |  |  |   | 2,290.8 | 
|2001              |  |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|Revenues          |  | $             |     |             |  | $     | 329.2   |       |  | $ | 58.6  |  |  | $ | 387.8   | 
|Long-lived assets |  |               | 28.1 |             |  |       | 2,631.6 |       |  |   | 311.1 |  |  |   | 2,970.8 | 
|2000              |  |               |      |             |  |       |         |       |  |   |       |  |  |   |         | 
|Revenues          |  | $             |     |             |  | $     | 202.5   |       |  | $ | 24.3  |  |  | $ | 226.8   | 
|Long-lived assets |  |               | 16.7 |             |  |       | 3,828.1 |       |  |   | 910.2 |  |  |   | 4,755.0 | 

F-104



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

23. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization

The following consolidating financial statements of Old NTL and subsidiaries as
of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001
and 2000 is being provided pursuant to AICPA Statement of Position 90-7. Old
NTL, NTL Delaware, NTL Communications Corp., Diamond Cable Communications
Limited, Diamond Holdings Limited and Communications Cable Funding Corp. are
included in Entities in Reorganization. All other wholly owned direct and
indirect subsidiaries of Old NTL are included in Entities Not in
Reorganization.

(in millions)

|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------ | -------------- | ---------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ------- | ------- | - | - | -------- | -------- | -
|                                                                               |                                                              |                | Year Ended December 31, 2002
|                                                                               |                                                              |                |                             
|                                                                               |                                                              |                |                              |                |    |             | Entities Not |              |   |   |         |         |   |   |         
|                                                                               |                                                              |                | Entities in                  |                | in |             |              |              |   |   |         |         |  
|Statements of Operations                                                       |                                                              | Reorganization |                              | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                              |                |                              |                |    |             |              |             
|Revenue                                                                        |                                                              | $              |                             |                |    | $           | 432.2        |              |   | $ |        |         |   | $ | 432.2    |         
|Costs and expenses                                                             |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                              |                |                             |                |    |             | 160.2        |              |   |   |        |         |   |   | 160.2    |         
|Selling, general and administrative expenses                                   |                                                              |                | 3.7                          |                |    |             | 154.8        |              |   |   | (8.7    | )       |   |   | 149.8    |         
|Asset impairments                                                              |                                                              |                |                             |                |    |             | 854.3        |              |   |   |        |         |   |   | 854.3    |         
|Other charges                                                                  |                                                              |                |                             |                |    |             | 3.5          |              |   |   |        |         |   |   | 3.5      |         
|Corporate expenses                                                             |                                                              |                | 0.6                          |                |    |             |             |              |   |   |         |         |   |   | 0.6      |         
|Depreciation                                                                   |                                                              |                | 0.7                          |                |    |             | 221.9        |              |   |   |        |         |   |   | 222.6    |         
|Amortization                                                                   |                                                              |                | 12.7                         |                |    |             | 82.4         |              |   |   |        |         |   |   | 95.1     |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|                                                                               |                                                              |                | 17.7                         |                |    |             | 1,477.1      |              |   |   | (8.7    | )       |   |   | 1,486.1  |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Operating loss                                                                 |                                                              |                | (17.7                        | )              |    |             | (1,044.9     | )            |   |   | 8.7     |         |   |   | (1,053.9 | )       
|Other income (expense)                                                         |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Interest income and other, net                                                 |                                                              |                | 6.5                          |                |    |             | (13.0        | )            |   |   | 0.2     |         |   |   | (6.3     | )       
|Interest expense (contractual interest of $198.2
(2002))                       |                                                              |                | (24.3                        | )              |    |             | (128.0       | )            |   |   | (3.4    | )       |   |   | (155.7   | )       
|Share of (losses) from equity investments                                      |                                                              |                | (1,353.5                     | )              |    |             | (22.4        | )            |   |   | 1,176.7 |         |   |   | (199.2   | )       
|Other gains (losses)                                                           |                                                              |                | 1.1                          |                |    |             | 1.9          |              |   |   |        |         |   |   | 3.0      |         
|Foreign currency transaction gains                                             |                                                              |                | 9.1                          |                |    |             |             |              |   |   | (0.1    | )       |   |   | 9.0      |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                              |                | (1,378.8                     | )              |    |             | (1,206.4     | )            |   |   | 1,182.1 |         |   |   | (1,403.1 | )       
|Recapitalization items, net                                                    |                                                              |                | (7.1                         | )              |    |             | (5.2         | )            |   |   | 7.5     |         |   |   | (4.8     | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) before income taxes and discontinued
operations                         |                                                              |                | (1,385.9                     | )              |    |             | (1,211.6     | )            |   |   | 1,189.6 |         |   |   | (1,407.9 | )       
|Income tax (expense) benefit                                                   |                                                              |                | 4.6                          |                |    |             | 129.4        |              |   |   | (4.6    | )       |   |   | 129.4    |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) from continuing operations                                              |                                                              |                | (1,381.3                     | )              |    |             | (1,082.2     | )            |   |   | 1,185.0 |         |   |   | (1,278.5 | )       
|Discontinued operations:                                                       |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|                                                                               | (Loss) from discontinued operations, net of taxes            |                |                              | (4,762.0       | )  |             |              | (1,737.4     | ) |   |         | 4,125.0 |   |   |          | (2,374.4 | )
|                                                                               | (Loss) gain on sale of discontinued operations,
net of taxes |                |                              | (5.7           | )  |             |              | 31.4         |   |   |         | (31.4   | ) |   |          | (5.7     | )
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|(Loss) from discontinued operations                                            |                                                              |                | (4,767.7                     | )              |    |             | (1,706.0     | )            |   |   | 4,093.6 |         |   |   | (2,380.1 | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         
|Net (loss)                                                                     |                                                              | $              | (6,149.0                     | )              |    | $           | (2,788.2     | )            |   | $ | 5,278.6 |         |   | $ | (3,658.6 | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |         |         |   |   |          |         

F-105



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

23. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |           |  
|------------------------------------------------------------------------------ | ----------------------------------------------------- | -------------- | ---------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ------- | ---- |  | - | --------- | --------- | -
|                                                                               |                                                       |                | Year Ended December 31, 2001
|                                                                               |                                                       |                |                             
|                                                                               |                                                       |                |                              |                |    |             | Entities Not |              |   |   |         |      |  |   |          
|                                                                               |                                                       |                | Entities in                  |                | in |             |              |              |   |   |         |      | 
|Statements of Operations                                                       |                                                       | Reorganization |                              | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                       |                |                              |                |    |             |              |             
|Revenue                                                                        |                                                       | $              |                             |                |    | $           | 387.8        |              |   | $ |        |      |  | $ | 387.8     |          
|Costs and expenses                                                             |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                       |                |                             |                |    |             | 161.6        |              |   |   |        |      |  |   | 161.6     |          
|Selling, general and administrative expenses                                   |                                                       |                | 5.9                          |                |    |             | 186.0        |              |   |   | (8.1    | )    |  |   | 183.8     |          
|Asset impairments                                                              |                                                       |                |                             |                |    |             | 887.0        |              |   |   | (401.2  | )    |  |   | 485.8     |          
|Other charges                                                                  |                                                       |                |                             |                |    |             | 12.1         |              |   |   |         |      |  |   | 12.1      |          
|Corporate expenses                                                             |                                                       |                | 12.8                         |                |    |             |             |              |   |   |         |      |  |   | 12.8      |          
|Depreciation                                                                   |                                                       |                | 2.7                          |                |    |             | 165.3        |              |   |   |         |      |  |   | 168.0     |          
|Amortization                                                                   |                                                       |                | 2.9                          |                |    |             | 385.1        |              |   |   |         |      |  |   | 388.0     |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|                                                                               |                                                       |                | 24.3                         |                |    |             | 1,797.1      |              |   |   | (409.3  | )    |  |   | 1,412.1   |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|Operating loss                                                                 |                                                       |                | (24.3                        | )              |    |             | (1,409.3     | )            |   |   | 409.3   |      |  |   | (1,024.3  | )        
|Other income (expense)                                                         |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|Interest income and other, net                                                 |                                                       |                | 5.7                          |                |    |             | 14.2         |              |   |   | 2.3     |      |  |   | 22.2      |          
|Interest expense                                                               |                                                       |                | (69.0                        | )              |    |             | (126.0       | )            |   |   | 5.1     |      |  |   | (189.9    | )        
|Share of (losses) from equity investments                                      |                                                       |                | (1,635.7                     | )              |    |             | (40.6        | )            |   |   | 1,056.4 |      |  |   | (619.9    | )        
|Other gains (losses)                                                           |                                                       |                | (109.3                       | )              |    |             | 50.4         |              |   |   | (0.4    | )    |  |   | (59.3     | )        
|Foreign currency transaction (losses)                                          |                                                       |                | (9.7                         | )              |    |             | (4.0         | )            |   |   |        |      |  |   | (13.7     | )        
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                       |                | (1,842.3                     | )              |    |             | (1,515.3     | )            |   |   | 1,472.7 |      |  |   | (1,884.9  | )        
|Recapitalization items, net                                                    |                                                       |                |                             |                |    |             |             |              |   |   |        |      |  |   |          |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|(Loss) before income taxes and discontinued operations                         |                                                       |                | (1,842.3                     | )              |    |             | (1,515.3     | )            |   |   | 1,472.7 |      |  |   | (1,884.9  | )        
|Income tax benefit                                                             |                                                       |                | 2.4                          |                |    |             | 48.6         |              |   |   |        |      |  |   | 51.0      |          
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|(Loss) from continuing operations                                              |                                                       |                | (1,839.9                     | )              |    |             | (1,466.7     | )            |   |   | 1,472.7 |      |  |   | (1,833.9  | )        
|Discontinued operations:                                                       |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|                                                                               | (Loss) from discontinued operations, net of taxes     |                |                              | (11,867.1      | )  |             |              | (30.7        | ) |   |         | 24.9 |  |   |           | (11,872.9 | )
|                                                                               | Gain on sale of discontinued operations, net of
taxes |                |                              |               |    |             |              |             |   |   |         |     |  |   |           |          |  
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|(Loss) from discontinued operations                                            |                                                       |                | (11,867.1                    | )              |    |             | (30.7        | )            |   |   | 24.9    |      |  |   | (11,872.9 | )        
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          
|Net (loss)                                                                     |                                                       | $              | (13,707.0                    | )              |    | $           | (1,497.4     | )            |   | $ | 1,497.6 |      |  | $ | (13,706.8 | )        
|                                                                               |                                                       |                |                              |                |    |             |              |              |   |   |         |      |  |   |           |          

F-106



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

23. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------ | -------------- | ---------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ----- | ---- |  | - | -------- | -------- | -
|                                                                               |                                                              |                | Year Ended December 31, 2000
|                                                                               |                                                              |                |                             
|                                                                               |                                                              |                |                              |                |    |             | Entities Not |              |   |   |       |      |  |   |         
|                                                                               |                                                              |                | Entities in                  |                | in |             |              |              |   |   |       |      | 
|Statements of Operations                                                       |                                                              | Reorganization |                              | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                              |                |                              |                |    |             |              |             
|Revenue                                                                        |                                                              | $              |                             |                |    | $           | 226.8        |              |   | $ |      |      |  | $ | 226.8    |         
|Costs and expenses                                                             |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                              |                |                             |                |    |             | 88.9         |              |   |   |      |      |  |   | 88.9     |         
|Selling, general and administrative expenses                                   |                                                              |                |                             |                |    |             | 103.1        |              |   |   |      |      |  |   | 103.1    |         
|Asset impairments                                                              |                                                              |                |                             |                |    |             |             |              |   |   |       |      |  |   |         |         
|Other charges                                                                  |                                                              |                |                             |                |    |             |             |              |   |   |       |      |  |   |         |         
|Corporate expenses                                                             |                                                              |                | 14.5                         |                |    |             |             |              |   |   |       |      |  |   | 14.5     |         
|Depreciation                                                                   |                                                              |                | 2.3                          |                |    |             | 99.3         |              |   |   | (14.2 | )    |  |   | 87.4     |         
|Amortization                                                                   |                                                              |                | 2.7                          |                |    |             | 282.0        |              |   |   | 14.6  |      |  |   | 299.3    |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|                                                                               |                                                              |                | 19.5                         |                |    |             | 573.3        |              |   |   | 0.4   |      |  |   | 593.2    |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|Operating loss                                                                 |                                                              |                | (19.5                        | )              |    |             | (346.5       | )            |   |   | (0.4  | )    |  |   | (366.4   | )       
|Other income (expense)                                                         |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|Interest income and other, net                                                 |                                                              |                | 29.1                         |                |    |             | (2.6         | )            |   |   | 7.6   |      |  |   | 34.1     |         
|Interest expense                                                               |                                                              |                | (68.6                        | )              |    |             | (84.0        | )            |   |   | 12.9  |      |  |   | (139.7   | )       
|Share of (losses) from equity investments                                      |                                                              |                | (437.5                       | )              |    |             |             |              |   |   | 391.2 |      |  |   | (46.3    | )       
|Other gains (losses)                                                           |                                                              |                |                             |                |    |             |             |              |   |   |      |      |  |   |         |         
|Foreign currency transaction gains                                             |                                                              |                | (63.0                        | )              |    |             |             |              |   |   | (1.4  | )    |  |   | (64.4    | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                              |                | (559.5                       | )              |    |             | (433.1       | )            |   |   | 409.9 |      |  |   | (582.7   | )       
|Recapitalization items, net                                                    |                                                              |                |                             |                |    |             |             |              |   |   |      |      |  |   |         |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|(Loss) before income taxes and discontinued
operations                         |                                                              |                | (559.5                       | )              |    |             | (433.1       | )            |   |   | 409.9 |      |  |   | (582.7   | )       
|Income tax (expense) benefit                                                   |                                                              |                |                              |                |    |             | 23.2         |              |   |   |       |      |  |   | 23.2     |         
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|(Loss) from continuing operations                                              |                                                              |                | (559.5                       | )              |    |             | (409.9       | )            |   |   | 409.9 |      |  |   | (559.5   | )       
|Discontinued operations:                                                       |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|                                                                               | (Loss) from discontinued operations, net of taxes            |                |                              | (2,407.5       | )  |             |              | (19.7        | ) |   |       | 19.7 |  |   |          | (2,407.5 | )
|                                                                               | (Loss) gain on sale of discontinued operations,
net of taxes |                |                              |               |    |             |              |             |   |   |       |     |  |   |          |         |  
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|(Loss) from discontinued operations                                            |                                                              |                | (2,407.5                     | )              |    |             | (19.7        | )            |   |   | 19.7  |      |  |   | (2,407.5 | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         
|Net (loss)                                                                     |                                                              | $              | (2,967.0                     | )              |    | $           | (429.6       | )            |   | $ | 429.6 |      |  | $ | (2,967.0 | )       
|                                                                               |                                                              |                |                              |                |    |             |              |              |   |   |       |      |  |   |          |         

F-107



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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

23. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|------------------------------------------------ |  | ----------------- | -------- | -------------- |  | ------------ | -------- | ------------ |  | - | --------- | - |  | - | -------- | -
|                                                 |  | December 31, 2002
|                                                 |  |                  
|                                                 |  |                   |          |                |  | Entities Not |          |              |  |   |           |   |  |  
|                                                 |  | Entities in       |          | in             |  |              |          |              |  |   |           |  
|Balance Sheets                                   |  | Reorganization    |          | Reorganization |  | Adjustments  |          | Consolidated
|                                                 |  |                   |          |                |  |              |          |             
|Current assets                                   |  | $                 | 166.3    |                |  | $            | 376.5    |              |  | $ | (0.3      | ) |  | $ | 542.5    |  
|Discontinued operations                          |  |                   | 809.6    |                |  |              | 12,692.6 |              |  |   | (528.2    | ) |  |   | 12,974.0 |  
|Investments in and loans to affiliates, net      |  |                   | 23,001.2 |                |  |              | 16.1     |              |  |   | (23,009.5 | ) |  |   | 7.8      |  
|Fixed and noncurrent assets                      |  |                   | 64.0     |                |  |              | 2,219.0  |              |  |   |          |   |  |   | 2,283.0  |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|Total assets                                     |  | $                 | 24,041.1 |                |  | $            | 15,304.2 |              |  | $ | (23,538.0 | ) |  | $ | 15,807.3 |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|Current liabilities                              |  | $                 | 9.5      |                |  | $            | 5,391.5  |              |  | $ | (2,259.1  | ) |  | $ | 3,141.9  |  
|Discontinued operations                          |  |                   | 13,331.4 |                |  |              | 14,764.0 |              |  |   | (10,122.2 | ) |  |   | 17,973.2 |  
|Noncurrent liabilities                           |  |                   | 5,927.0  |                |  |              | 361.9    |              |  |   | (5,892.5  | ) |  |   | 396.4    |  
|Liabilities subject to compromise                |  |                   | 1,243.7  |                |  |              |         |              |  |   |          |   |  |   | 1,243.7  |  
|Shareholders (deficiency)                       |  |                   | 3,529.5  |                |  |              | (5,213.2 | )            |  |   | (5,264.2  | ) |  |   | (6,947.9 | )
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  
|Total liabilities and shareholders (deficiency) |  | $                 | 24,041.1 |                |  | $            | 15,304.2 |              |  | $ | (23,538.0 | ) |  | $ | 15,807.3 |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |           |   |  |   |          |  

|                                                 |  |                   |          |                |  |              |          |              |  |   |          |   |  |   |          |  
|------------------------------------------------ |  | ----------------- | -------- | -------------- |  | ------------ | -------- | ------------ |  | - | -------- | - |  | - | -------- | -
|                                                 |  | December 31, 2001
|                                                 |  |                  
|                                                 |  |                   |          |                |  | Entities Not |          |              |  |   |          |   |  |  
|                                                 |  | Entities in       |          | In             |  |              |          |              |  |   |          |  
|Balance Sheets                                   |  | Reorganization    |          | Reorganization |  | Adjustments  |          | Consolidated
|                                                 |  |                   |          |                |  |              |          |             
|Current assets                                   |  | $                 | 10.1     |                |  | $            | 815.9    |              |  | $ | (470.6   | ) |  | $ | 355.3    |  
|Discontinued operations                          |  |                   | 414.0    |                |  |              | 12,713.6 |              |  |   | 365.0    |   |  |   | 13,492.6 |  
|Investments and loans to affiliates, net         |  |                   | 5,962.3  |                |  |              | 56.9     |              |  |   | (5,803.1 | ) |  |   | 216.1    |  
|Fixed and noncurrent assets                      |  |                   | 64.2     |                |  |              | 2,655.2  |              |  |   | 35.3     |   |  |   | 2,754.7  |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |          |   |  |   |          |  
|Total assets                                     |  | $                 | 6,450.5  |                |  | $            | 16,241.6 |              |  | $ | (5,873.4 | ) |  | $ | 16,818.7 |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |          |   |  |   |          |  
|Current liabilities                              |  | $                 | 38.7     |                |  | $            | 4,787.1  |              |  | $ | (1,061.6 | ) |  | $ | 3,764.2  |  
|Discontinued operations                          |  |                   | 9,598.8  |                |  |              | 12,748.7 |              |  |   | (5,916.9 | ) |  |   | 16,430.6 |  
|Noncurrent liabilities                           |  |                   | 4,138.0  |                |  |              | 272.8    |              |  |   | (4,123.1 | ) |  |   | 287.7    |  
|Liabilities subject to compromise                |  |                   |         |                |  |              |         |              |  |   |         |   |  |   |         |  
|Shareholders (deficiency)                       |  |                   | (7,325.0 | )              |  |              | (1,567.0 | )            |  |   | 5,228.2  |   |  |   | (3,663.8 | )
|                                                 |  |                   |          |                |  |              |          |              |  |   |          |   |  |   |          |  
|Total liabilities and shareholders (deficiency) |  | $                 | 6,450.5  |                |  | $            | 16,241.6 |              |  | $ | (5,873.4 | ) |  | $ | 16,818.7 |  
|                                                 |  |                   |          |                |  |              |          |              |  |   |          |   |  |   |          |  

F-108



---



##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

23. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  
|------------------------------------------------------------------------ |  | ---------------------------- | -------- | -------------- |  | ------------ | ------ | ------------ |  | - | -------- | - |  | - | ------ | -
|                                                                         |  | Year Ended December 31, 2002
|                                                                         |  |                             
|                                                                         |  |                              |          |                |  | Entities Not |        |              |  |   |          |   |  |  
|                                                                         |  | Entities in                  |          | In             |  |              |        |              |  |   |          |  
|Statements of Cash Flows                                                 |  | Reorganization               |          | Reorganization |  | Adjustments  |        | Consolidated
|                                                                         |  |                              |          |                |  |              |        |             
|Net cash provided by (used in) operating activities                      |  | $                            | (2,390.9 | )              |  | $            | (36.0  | )            |  | $ | 2,638.2  |   |  | $ | 211.3  |  
|Net cash provided by (used in) investing activities                      |  |                              | 2,508.3  |                |  |              | (150.5 | )            |  |   | (2,811.6 | ) |  |   | (453.8 | )
|Net cash provided by financing activities                                |  |                              | (10.0    | )              |  |              | 153.1  |              |  |   | 388.6    |   |  |   | 531.7  |  
|Effect of exchange rate changes on cash and cash
equivalents             |  |                              |         |                |  |              | 14.6   |              |  |   | 35.8     |   |  |   | 50.4   |  
|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  
|Increase in cash and cash equivalents                                    |  |                              | 107.4    |                |  |              | (18.8  | )            |  |   | 251.0    |   |  |   | 339.6  |  
|Cash and cash equivalents at beginning of year 
continuing operations   |  |                              | 3.0      |                |  |              | 88.0   |              |  |   |         |   |  |   | 91.0   |  
|Cash and cash equivalents at beginning of year 
discontinued operations |  |                              |         |                |  |              | 25.2   |              |  |   | 251.1    |   |  |   | 276.3  |  
|Cash and cash equivalents at end of year 
discontinued operations       |  |                              |         |                |  |              |       |              |  |   | (502.0   | ) |  |   | (502.0 | )
|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  
|Cash and cash equivalents at end of year 
continuing operations         |  | $                            | 110.4    |                |  | $            | 94.4   |              |  | $ | 0.1      |   |  | $ | 204.9  |  
|                                                                         |  |                              |          |                |  |              |        |              |  |   |          |   |  |   |        |  

|                                                                         |  |                              |           |                |  |              |        |              |  |   |           |   |  |   |          |  
|------------------------------------------------------------------------ |  | ---------------------------- | --------- | -------------- |  | ------------ | ------ | ------------ |  | - | --------- | - |  | - | -------- | -
|                                                                         |  | Year Ended December 31, 2001
|                                                                         |  |                             
|                                                                         |  |                              |           |                |  | Entities Not |        |              |  |   |           |   |  |  
|                                                                         |  | Entities in                  |           | In             |  |              |        |              |  |   |           |  
|Statements of Cash Flows                                                 |  | Reorganization               |           | Reorganization |  | Adjustments  |        | Consolidated
|                                                                         |  |                              |           |                |  |              |        |             
|Net cash provided by (used in) operating activities                      |  | $                            | (12,013.3 | )              |  | $            | 12.1   |              |  | $ | 11,433.1  |   |  | $ | (568.1   | )
|Net cash provided by (used in) investing activities                      |  |                              | 11,813.2  |                |  |              | (393.6 | )            |  |   | (13,708.6 | ) |  |   | (2,289.0 | )
|Net cash provided by financing activities                                |  |                              | 200.5     |                |  |              | 414.1  |              |  |   | 2,110.9   |   |  |   | 2,725.5  |  
|Effect of exchange rate changes on cash and cash equivalents             |  |                              |          |                |  |              | (3.2   | )            |  |   | (7.8      | ) |  |   | (11.0    | )
|                                                                         |  |                              |           |                |  |              |        |              |  |   |           |   |  |   |          |  
|(Decrease) in cash and cash equivalents                                  |  |                              | 0.4       |                |  |              | 29.4   |              |  |   | (172.4    | ) |  |   | (142.6   | )
|Cash and cash equivalents at beginning of year  continuing operations   |  |                              | 2.6       |                |  |              | 54.3   |              |  |   |          |   |  |   | 56.9     |  
|Cash and cash equivalents at beginning of year  discontinued operations |  |                              |          |                |  |              | 29.5   |              |  |   | 423.5     |   |  |   | 453.0    |  
|Cash and cash equivalents at end of year  discontinued operations       |  |                              |          |                |  |              | (25.2  | )            |  |   | (251.1    | ) |  |   | (276.3   | )
|                                                                         |  |                              |           |                |  |              |        |              |  |   |           |   |  |   |          |  
|Cash and cash equivalents at end of year 
continuing operations         |  | $                            | 3.0       |                |  | $            | 88.0   |              |  | $ |          |   |  | $ | 91.0     |  
|                                                                         |  |                              |           |                |  |              |        |              |  |   |           |   |  |   |          |  

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NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

23. Consolidating Financial Statements of Entities in Reorganization and Entities Not in Reorganization (continued)

(in millions)

|                                                                         |  |                              |          |                |  |              |          |              |  |   |          |   |  |   |           |  
|------------------------------------------------------------------------ |  | ---------------------------- | -------- | -------------- |  | ------------ | -------- | ------------ |  | - | -------- | - |  | - | --------- | -
|                                                                         |  | Year Ended December 31, 2000
|                                                                         |  |                             
|                                                                         |  |                              |          |                |  | Entities Not |          |              |  |   |          |   |  |  
|                                                                         |  | Entities in                  |          | In             |  |              |          |              |  |   |          |  
|Statements of Cash Flows                                                 |  | Reorganization               |          | Reorganization |  | Adjustments  |          | Consolidated
|                                                                         |  |                              |          |                |  |              |          |             
|Net cash provided by (used in) operating activities                      |  | $                            | (2,526.0 | )              |  | $            | 38.9     |              |  | $ | 2,108.8  |   |  | $ | (378.3    | )
|Net cash provided by (used in) investing activities                      |  |                              | (5,158.2 | )              |  |              | (1,965.1 | )            |  |   | (6,388.7 | ) |  |   | (13,512.0 | )
|Net cash provided by financing activities                                |  |                              | 6,185.4  |                |  |              | 1,990.8  |              |  |   | 3,654.7  |   |  |   | 11,830.9  |  
|Effect of exchange rate changes on cash and cash
equivalents             |  |                              |         |                |  |              | (2.4     | )            |  |   | (25.5    | ) |  |   | (27.9     | )
|                                                                         |  |                              |          |                |  |              |          |              |  |   |          |   |  |   |           |  
|Increase (decrease) in cash and cash equivalents                         |  |                              | (1,498.8 | )              |  |              | 62.2     |              |  |   | (650.7   | ) |  |   | (2,087.3  | )
|Cash and cash equivalents at beginning of year 
continuing operations   |  |                              | 1,501.4  |                |  |              | 8.8      |              |  |   | 1.4      |   |  |   | 1,511.6   |  
|Cash and cash equivalents at beginning of year 
discontinued operations |  |                              |         |                |  |              | 12.8     |              |  |   | 1,072.8  |   |  |   | 1,085.6   |  
|Cash and cash equivalents at end of year 
discontinued operations       |  |                              |         |                |  |              | (29.5    | )            |  |   | (423.5   | ) |  |   | (453.0    | )
|                                                                         |  |                              |          |                |  |              |          |              |  |   |          |   |  |   |           |  
|Cash and cash equivalents at end of year 
continuing operations         |  | $                            | 2.6      |                |  | $            | 54.3     |              |  | $ |         |   |  | $ | 56.9      |  
|                                                                         |  |                              |          |                |  |              |          |              |  |   |          |   |  |   |           |  

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##### Table of Contents



NTL (Delaware), Inc. (Debtor-in-Possession) and Subsidiaries
Notes to Consolidated Financial Statements (continued)

24. Quarterly Financial Information (Unaudited)

The following is a summary of the quarterly results of operations for the years ended December 31, 2002 and 2001.

|                                    |  |                    |        |          |  |               |        |              |  |       |        |   |  |   |          |   |  |   |          |  
|----------------------------------- |  | ------------------ | ------ | -------- |  | ------------- | ------ | ------------ |  | ----- | ------ | - |  | - | -------- | - |  | - | -------- | -
|                                    |  | (in millions)     
|                                    |  |                   
|                                    |  | 2002(1,2)         
|                                    |  |                   
|                                    |  | Three Months Ended
|                                    |  | March 31,          |        | June 30, |  | September 30, |        | December 31, |  | Total
|                                    |  |                    |        |          |  |               |        |              |  |      
|Revenues                            |  | $                  | 87.7   |          |  | $             | 99.2   |              |  | $     | 108.8  |   |  | $ | 136.5    |   |  | $ | 432.2    |  
|Operating (loss)                    |  |                    | (44.0  | )        |  |               | (73.8  | )            |  |       | (62.0  | ) |  |   | (874.1   | ) |  |   | (1,053.9 | )
|(Loss) from continuing operations   |  |                    | (104.5 | )        |  |               | (124.1 | )            |  |       | (142.5 | ) |  |   | (907.4   | ) |  |   | (1,278.5 | )
|(Loss) from discontinued operations |  |                    | (464.9 | )        |  |               | (406.1 | )            |  |       | (583.5 | ) |  |   | (925.6   | ) |  |   | (2,380.1 | )
|Net (loss)                          |  |                    | (569.4 | )        |  |               | (530.2 | )            |  |       | (726.0 | ) |  |   | (1,833.0 | ) |  |   | (3,658.6 | )

|                                    |  |                    |          |          |  |               |          |              |  |       |          |   |  |   |           |   |  |   |           |  
|----------------------------------- |  | ------------------ | -------- | -------- |  | ------------- | -------- | ------------ |  | ----- | -------- | - |  | - | --------- | - |  | - | --------- | -
|                                    |  | (in millions)     
|                                    |  |                   
|                                    |  | 2001(1,3)         
|                                    |  |                   
|                                    |  | Three Months Ended
|                                    |  | March 31,          |          | June 30, |  | September 30, |          | December 31, |  | Total
|                                    |  |                    |          |          |  |               |          |              |  |      
|Revenues                            |  | $                  | 92.1     |          |  | $             | 91.8     |              |  | $     | 78.7     |   |  | $ | 125.2     |   |  | $ | 387.8     |  
|Operating (loss)                    |  |                    | (117.9   | )        |  |               | (126.9   | )            |  |       | (128.6   | ) |  |   | (650.9    | ) |  |   | (1,024.3  | )
|(Loss) from continuing operations   |  |                    | (199.1   | )        |  |               | (212.2   | )            |  |       | (195.2   | ) |  |   | (1,227.4  | ) |  |   | (1,833.9  | )
|(Loss) from discontinued operations |  |                    | (837.1   | )        |  |               | (801.8   | )            |  |       | (811.1   | ) |  |   | (9,422.9  | ) |  |   | (11,872.9 | )
|Net (loss)                          |  |                    | (1,036.2 | )        |  |               | (1,014.0 | )            |  |       | (1,006.3 | ) |  |   | (10,650.3 | ) |  |   | (13,706.8 | )



|(1) |  | As more fully described in Notes 1, 2 and 3 to the Consolidated Financial
Statements, on May 8, 2002, Old NTL filed the Plan which became effective on
January 10, 2003. Under the terms of the Plan, the operations of New NTL have
been accounted for as a discontinued operation of the Company, beginning with
the quarter ended September 30, 2002 and, accordingly, its operating results
have been excluded from the Companys results from continuing operations for
the periods presented. In addition, the operating results for NTL Australia
and Rediffusion also qualified for discontinued operations treatment (because
both units were sold during the current year) for all periods presented.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | During the fourth quarter of 2002, the Company recorded an asset
impairment charge of $838.8 million, which was associated with a goodwill
impairment provision at Cablecom. The fourth quarter loss in 2002 from
discontinued operations also included an asset impairment charge of $418.5
million and a restructuring charge of $99.2 million relating to the operations
of New NTL.                                                                                                                                                                                                                                                                                                                        
|   
|(3) |  | During the fourth quarter of 2001, the Company recorded an asset
impairment charge of $912.1 million, which was associated with a goodwill
impairment provision at Cablecom and the write-down of various long-term assets
at Premium TV. The fourth quarter loss in 2001 from discontinued operations
also included an asset impairment charge of $8,161.6 million and a
restructuring charge of $202.8 million relating to the operations of New NTL.                                                                                                                                                                                                                                                        

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NTL (Delaware), Inc. (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant
Condensed Balance Sheets
(dollars in millions)

|                                                                                          |                                        |   |              |           |      |   |          |           |  
|----------------------------------------------------------------------------------------- | -------------------------------------- | - | ------------ | --------- | ---- | - | -------- | --------- | -
|                                                                                          |                                        |   | December 31,
|                                                                                          |                                        |   |             
|                                                                                          |                                        |   | 2002         |           | 2001
|                                                                                          |                                        |   |              |           |     
|Assets                                                                                    |                                        |   |              |           |      |   |          |          
|Current assets:                                                                           |                                        |   |              |           |      |   |          |          
|                                                                                          | Cash and cash equivalents              |   | $            | 110.4     |      |   | $        | 3.0       |  
|                                                                                          | Marketable securities                  |   |              | 13.0      |      |   |          |          |  
|                                                                                          | Affiliate receivables                  |   |              | 35.1      |      |   |          | 5.5       |  
|                                                                                          | Other                                  |   |              | 7.8       |      |   |          | 1.5       |  
|                                                                                          |                                        |   |              |           |      |   |          |           |  
|Total current assets                                                                      |                                        |   | 166.3        |           |      |   | 10.0     |          
|Fixed assets, net                                                                         |                                        |   |             |           |      |   | 6.3      |          
|Deferred financing costs, net of accumulated
amortization of $18.5 (2002) and $5.7 (2001) |                                        |   | 19.1         |           |      |   | 21.8     |          
|Other assets                                                                              |                                        |   | 44.9         |           |      |   | 36.1     |          
|                                                                                          |                                        |   |              |           |      |   |          |          
|Total assets                                                                              |                                        | $ | 230.3        |           |      | $ | 74.2     |          
|                                                                                          |                                        |   |              |           |      |   |          |          
|Liabilities and shareholders (deficiency)                                                |                                        |   |              |           |      |   |          |          
|Liabilities not subject to compromise                                                     |                                        |   |              |           |      |   |          |          
|Current liabilities                                                                       |                                        | $ | 1.7          |           |      | $ | 5.3      |          
|Affiliate payable                                                                         |                                        |   | 7.8          |           |      |   | 33.4     |          
|                                                                                          |                                        |   |              |           |      |   |          |          
|Total current liabilities                                                                 |                                        |   | 9.5          |           |      |   | 38.7     |          
|Long-term debt                                                                            |                                        |   |             |           |      |   | 1,200.0  |          
|Liabilities subject to compromise                                                         |                                        |   | 1,243.7      |           |      |   |         |          
|Investments in and loans to discontinued operations                                       |                                        |   | 4,999.2      |           |      |   | 2,938.0  |          
|Investments in and loans to affiliates, net                                               |                                        |   | 925.8        |           |      |   | (438.7   | )        
|Shareholders (deficiency):                                                               |                                        |   |              |           |      |   |          |          
|                                                                                          | Common stock                           |   |              |          |      |   |          |          |  
|                                                                                          | Additional paid-in capital             |   |              | 16,193.9  |      |   |          | 16,070.1  |  
|                                                                                          | Accumulated other comprehensive (loss) |   |              | (821.9    | )    |   |          | (1,072.7  | )
|                                                                                          | (Deficit)                              |   |              | (22,319.9 | )    |   |          | (18,661.2 | )
|                                                                                          |                                        |   |              |           |      |   |          |          
|                                                                                          |                                        |   | (6,947.9     | )         |      |   | (3,663.8 | )        
|                                                                                          |                                        |   |              |           |      |   |          |          
|Total liabilities and shareholders (deficiency)                                          |                                        | $ | 230.3        |           |      | $ | 74.2     |          
|                                                                                          |                                        |   |              |           |      |   |          |          

See accompanying notes.

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NTL (Delaware), Inc. (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Condensed Statements of Operations
(dollars in millions)

|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                                                                                            |  | Year Ended December 31,
|                                                                                                                            |  |                        
|                                                                                                                            |  | 2002                    |          | 2001 |  | 2000
|                                                                                                                            |  |                         |          |      |  |     
|Cost and expenses                                                                                                           |  |                         |          |      |  |      |           |   |  |   |          |  
|Operating expenses (exclusive of depreciation shown
separately below)                                                       |  | $                       |         |      |  | $    |          |   |  | $ |         |  
|Selling, general and administrative expenses                                                                                |  |                         | 3.6      |      |  |      | 5.8       |   |  |   |         |  
|Asset impairments                                                                                                           |  |                         | 2.2      |      |  |      |          |   |  |   |         |  
|Other charges                                                                                                               |  |                         |         |      |  |      |          |   |  |   |         |  
|Corporate expenses                                                                                                          |  |                         | 0.6      |      |  |      | 12.8      |   |  |   | 14.5     |  
|Depreciation and amortization                                                                                               |  |                         | 13.4     |      |  |      | 5.5       |   |  |   | 5.0      |  
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|Operating (loss)                                                                                                            |  |                         | (19.8    | )    |  |      | (24.1     | ) |  |   | (19.5    | )
|Other income (expense)                                                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|Interest income and other, net                                                                                              |  |                         | 4.1      |      |  |      | 5.7       |   |  |   | 29.2     |  
|Interest expense                                                                                                            |  |                         | (24.3    | )    |  |      | (69.0     | ) |  |   | (68.6    | )
|Other gains (losses)                                                                                                        |  |                         | 1.1      |      |  |      | (109.3    | ) |  |   |         |  
|Foreign currency transaction gains (losses)                                                                                 |  |                         | 9.1      |      |  |      | (9.7      | ) |  |   | (63.0    | )
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) income before recapitalization items, income
taxes, equity in net (loss) of subsidiaries and
discontinued operations |  |                         | (29.8    | )    |  |      | (206.4    | ) |  |   | (121.9   | )
|Recapitalization items, net                                                                                                 |  |                         | (4.8     | )    |  |      |          |   |  |   |         |  
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) income before income taxes, equity in net (loss)
of subsidiaries and discontinued operations                         |  |                         | (34.6    | )    |  |      | (206.4    | ) |  |   | (121.9   | )
|Income tax (expense) benefit                                                                                                |  |                         | 4.6      |      |  |      | 2.4       |   |  |   |         |  
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) income before equity in net (loss) of subsidiaries                                                                   |  |                         | (30.0    | )    |  |      | (204.0    | ) |  |   | (121.9   | )
|Equity in net (loss) of subsidiaries                                                                                        |  |                         | (1,248.5 | )    |  |      | (1,635.7  | ) |  |   | (437.6   | )
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) from continuing operations                                                                                           |  |                         | (1,278.5 | )    |  |      | (1839.7   | ) |  |   | (559.6   | )
|Discontinued operations:                                                                                                    |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) from discontinued operations, net of income tax
benefit (charge) of $26.3 (2002), $114.1 (2001) and
$88.1 (2000)     |  |                         | (2,374.4 | )    |  |      | (11,867.1 | ) |  |   | (2,407.5 | )
|Net (loss) on sales of discontinued operations, net of
income tax expense of $4.6 (2002)                                    |  |                         | (5.7     | )    |  |      |          |   |  |   |         |  
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) from discontinued operations                                                                                         |  |                         | (2,380.1 | )    |  |      | (11,867.1 | ) |  |   | (2,407.5 | )
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|Net (loss)                                                                                                                  |  | $                       | (3,658.6 | )    |  | $    | (13,706.8 | ) |  | $ | (2,967.0 | )
|                                                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  

See accompanying notes.

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NTL (Delaware), Inc. (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Condensed Statements of Cash Flows
(dollars in millions)

|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|------------------------------------------------------ |  | ----------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                       |  | Year Ended December 31,
|                                                       |  |                        
|                                                       |  | 2002                    |          | 2001 |  | 2000
|                                                       |  |                         |          |      |  |     
|Net cash (used in) operating activities                |  | $                       | (3,744.4 | )    |  | $    | (13,531.2 | ) |  | $ | (2,963.5 | )
|Investing activities                                   |  |                         |          |      |  |      |           |   |  |   |          |  
|Purchase of marketable securities                      |  |                         | (34.0    | )    |  |      |          |   |  |   | (58.2    | )
|Proceeds from sales of marketable securities           |  |                         | 21.1     |      |  |      |          |   |  |   | 241.6    |  
|Purchase of fixed assets                               |  |                         |         |      |  |      |          |   |  |   | (4.0     | )
|Investments in and loans to affiliates                 |  |                         | (95.8    | )    |  |      | (88.2     | ) |  |   | (2,435.3 | )
|Increase(decrease) in other assets                     |  |                         |         |      |  |      | (5.5      | ) |  |   |         |  
|Proceeds from the sale of assets                       |  |                         | 8.9      |      |  |      |          |   |  |   |         |  
|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash (used in) provided by continuing operations   |  |                         | (99.8    | )    |  |      | (93.7     | ) |  |   | (2,255.9 | )
|Net cash provided by (used in) discontinued operations |  |                         | 1,655.4  |      |  |      | 1,517.9   |   |  |   | 437.5    |  
|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash provided by (used in) investing activities    |  |                         | 1,555.6  |      |  |      | 1,424.2   |   |  |   | (1,818.4 | )
|Financing activities                                   |  |                         |          |      |  |      |           |   |  |   |          |  
|Proceeds from borrowings, net of financing costs       |  |                         | (10.0    | )    |  |      |          |   |  |   | (0.8     | )
|Proceeds from issuance of common stock                 |  |                         |          |      |  |      |          |   |  |   | 37.3     |  
|Proceeds from issuance of preferred stock              |  |                         |         |      |  |      |          |   |  |   | 1,850.0  |  
|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash provided by (used in) continuing operations   |  |                         | (10.0    | )    |  |      |          |   |  |   | 1,886.5  |  
|Net cash provided by discontinued operations           |  |                         | 2,306.2  |      |  |      | 12,107.4  |   |  |   | 1,396.7  |  
|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|Net cash provided by financing activities              |  |                         | 2,296.2  |      |  |      | 12,107.4  |   |  |   | 3,283.2  |  
|Increase (decrease) in cash and cash equivalents       |  |                         | 107.4    |      |  |      | 0.4       |   |  |   | (1,498.7 | )
|Cash and cash equivalents at beginning of year         |  |                         | 3.0      |      |  |      | 2.6       |   |  |   | 1,501.3  |  
|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|Cash and cash equivalents at end of year               |  | $                       | 110.4    |      |  | $    | 3.0       |   |  | $ | 2.6      |  
|                                                       |  |                         |          |      |  |      |           |   |  |   |          |  
|Supplemental disclosure of cash flow information       |  |                         |          |      |  |      |           |   |  |   |          |  
|Cash paid for interest                                 |  |                         |         |      |  | $    | 69.0      |   |  | $ | 68.0     |  
|Supplemental schedule of non-cash financing activities |  |                         |          |      |  |      |           |   |  |   |          |  
|Accretion of dividends and discount on preferred stock |  |                         |         |      |  |      |          |   |  | $ | 10.6     |  

See accompanying notes.

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NTL (Delaware), Inc. (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Notes to Condensed Financial Statements

1. Corporate Restructuring

The accompanying financial statements do not reflect any adjustments in
connection with the emergence of NTL (Delaware), Inc. (NTL Delaware or the
Company), a wholly-owned subsidiary of NTL Europe (as defined below) which
holds must of NTL Europes assets, from Chapter 11 reorganization.

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

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

Historical Structure of the Company

On May 18, 2000, the entity formerly known as NTL Incorporated (currently
named NTL (Delaware), Inc.) completed a corporate restructuring to create a
holding company structure. The formation of the holding company was part of
NTL Delaware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 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 was
called NTL Incorporated (which is now known as NTL Europe, Inc.) and the
holding companys subsidiary simultaneously changed its name to NTL (Delaware),
Inc.

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

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.

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NTL (Delaware), Inc. (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant (continued)
Notes to Condensed Financial Statements

3. Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

|                        |                       |                                       |       |  |               |         | 
|----------------------- | --------------------- | ------------------------------------- | ----- |  | ------------- | ------- | 
|                        |                       |                                       |       |  | December 31, 
|                        |                       |                                       |       |  | 2002         
|                        |                       |                                       |       |  |              
|                        |                       |                                       |       |  | (in millions)
|Accounts payable        |                       | $                                     | 0.2   | 
|Interest payable        |                       |                                       | 27.2  | 
|Payable to subsidiaries |                       |                                       | 16.3  | 
|Long term debt:         |                       |                                       |       | 
|                        | NTL (Delaware), Inc.: |                                       |       |  |              
|                        |                       | 5 3/4% Convertible Subordinated Notes |       |  | 1,200.0       |        
|                        |                       |                                       |       | 
|                        |                       |                                       | Total |  | $             | 1,243.7 | 
|                        |                       |                                       |       | 

Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
all of the outstanding preferred stock of Old NTL and long-term debt of Old NTL
were canceled.

4. Note Payable to NTL Incorporated

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

5. Other

No cash dividends were paid to Old NTL by subsidiaries for the years ended
December 31, 2002 and 2001 and during the period from May 18, 2000 to December
31, 2000.

Old NTL was a joint obligor for the NTL Communications Corp. 7% Convertible
Subordinated Notes due December 15, 2008. Old NTL was a co-obligor on a
subordinated basis for the NTL Communications Corp. 6 3/4% Convertible Senior
Notes due May 15, 2008. All of this debt was subject to the provisions of the
Plan.

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NTL (Delaware), Inc. (Debtor-in-Possession)
Schedule II  Valuation and Qualifying Accounts

|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |      | 
|---------------------------- | ------------------------------- | ------ | ---------- | -------- | --------- | -------- | --------- | -------- | ------------ | --------- | ------- | - |  |  | - | ------ | ---- |  | - | ---- | 
|Col. A                       |                                 | Col. B |            | Col. C   |           | Col. D   |           | Col. E  
|                             |                                 |        |            |          |           |          |           |         
|                             |                                 |        |            |          |           |          | Additions |          |              |           |         |   |  |  |  
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |  
|                             |                                 |        |            |          |           |          |           |          |              |           | (2)     |   |  |  |   |        |      |  |  
|                             |                                 |        |            |          |           |          | (1)       |          | Charged      |           |         |   |  |  |   |        |     
|                             |                                 |        | Balance at |          | Charged   |          | to        |          |              |           |         |   |  |  |  
|                             |                                 |        | Beginning  |          | to        |          | Other     |          | (Deductions) |           | Balance
|                             |                                 |        | of         |          | Costs and |          | Accounts  |          | /Additions   |           | at End 
|Description                  |                                 | Period |            | Expenses |           | Describe |           | Describe |              | of Period
|                             |                                 |        |            |          |           |          |           |          |              |          
|Year ended December 31, 2002 |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|                             | Allowance for doubtful accounts |        | $          | 6.6      |           |          | $         | 7.2      |              |           | $       |  |  |  | $ | (4.4   | )(a) |  | $ | 9.4  | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|                             | Allowance for loans receivable  |        | $          | 37.2     |           |          | $         | 21.0     |              |           | $       |  |  |  | $ | (40.6) | (b)  |  | $ | 17.6 | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|Year ended December 31, 2001 |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|                             | Allowance for doubtful accounts |        | $          | 6.2      |           |          | $         | 2.5      |              |           | $       |  |  |  | $ | (2.1   | )(c) |  | $ | 6.6  | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|                             | Allowance for loans receivable  |        | $          |         |           |          | $         | 37.2     |              |           | $       |  |  |  | $ |       |      |  | $ | 37.2 | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|Year ended December 31, 2000 |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     
|                             | Allowance for doubtful accounts |        | $          | 0.7      |           |          | $         | 0.4      |              |           | $       |  |  |  | $ | 5.1    | (d)  |  | $ | 6.2  | 
|                             |                                 |        |            |          |           |          |           |          |              |           |         |   |  |  |   |        |      |  |   |     



|(a) |  | Uncollectible accounts written-off, net of recoveries of $5.9 million,
offset by $1.5 million foreign currency exchange translation adjustments.                                                                                             
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Write off of loan receivable from Football League Joint Venture.                                                                                                                                                                             
|   
|(c) |  | Uncollectible accounts written-off, net of recoveries of $2.0 million and
$0.1 million foreign currency translation adjustments.                                                                                                             
|   
|(d) |  | Recoveries, net of uncollectible accounts written-off of $1.2 million
plus $0.2 million foreign currency exchange translation adjustments and
$3.7 million allowance for doubtful accounts as of acquisition dates of
purchased subsidiaries.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Consolidated Financial Statements and Financial Statement Schedules

[remainder of page intentionally left blank]

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REPORT OF INDEPENDENT AUDITORS

The Board of Directors and
Shareholders
NTL Incorporated (formerly NTL Communications Corp.)

We have audited the consolidated balance sheets of NTL Incorporated (formerly
NTL Communications Corp.) and Subsidiaries as of December 31, 2002 and 2001,
and the related consolidated statements of operations, shareholders
equity (deficiency) and cash flows for each of the three years in the period
ended December 31, 2002. Our audits also included the financial statement
schedules listed in the Index at Item 15(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 (formerly NTL Communications Corp.) and Subsidiaries at December
31, 2002 and 2001, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended December 31, 2002,
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.

As discussed in Note 4, the Company changed its method of accounting for
goodwill and other intangibles effective January 1, 2002.

/s/ ERNST & YOUNG LLP


New York, New York
March 27, 2003

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Balance Sheets
(dollars in millions)

|                                                                                 |                                                                                                     |   |              |       |      |   |          |       | 
|-------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | - | ------------ | ----- | ---- | - | -------- | ----- | 
|                                                                                 |                                                                                                     |   | December 31,
|                                                                                 |                                                                                                     |   |             
|                                                                                 |                                                                                                     |   | 2002         |       | 2001
|                                                                                 |                                                                                                     |   |              |       |     
|Assets                                                                           |                                                                                                     |   |              |       |      |   |          |      
|Current assets:                                                                  |                                                                                                     |   |              |       |      |   |          |      
|                                                                                 | Cash and cash equivalents                                                                           |   | $            | 502.0 |      |   | $        | 251.1 | 
|                                                                                 | Marketable securities                                                                               |   |              | 5.2   |      |   |          |      | 
|                                                                                 | Accounts receivable  trade, less allowance for doubtful accounts of
$92.7 (2002) and $126.1 (2001) |   |              | 395.9 |      |   |          | 516.2 | 
|                                                                                 | Due from affiliates                                                                                 |   |              | 1.6   |      |   |          | 4.0   | 
|                                                                                 | Other                                                                                               |   |              | 192.7 |      |   |          | 238.8 | 
|                                                                                 | Due from NTL Europe, Inc.                                                                           |   |              | 73.3  |      |   |          | 2.9   | 
|                                                                                 |                                                                                                     |   |              |       |      |   |          |       | 
|Total current assets                                                             |                                                                                                     |   | 1,170.7      |       |      |   | 1,013.0  |      
|Fixed assets, net                                                                |                                                                                                     |   | 11,088.9     |       |      |   | 10,840.3 |      
|Goodwill                                                                         |                                                                                                     |   | 330.6        |       |      |   | 647.8    |      
|Intangible assets, net                                                           |                                                                                                     |   | 64.7         |       |      |   | 119.5    |      
|Investments in and loans to affiliates, net                                      |                                                                                                     |   | 8.4          |       |      |   | 4.4      |      
|Other assets, net of accumulated amortization of $184.8 (2002) and
$125.0 (2001) |                                                                                                     |   | 378.1        |       |      |   | 255.4    |      
|Loan to NTL Europe, Inc.                                                         |                                                                                                     |   |             |       |      |   | 150.0    |      
|                                                                                 |                                                                                                     |   |              |       |      |   |          |      
|Total assets                                                                     |                                                                                                     | $ | 13,041.4     |       |      | $ | 13,030.4 |      
|                                                                                 |                                                                                                     |   |              |       |      |   |          |      

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Balance Sheets (continued)
(dollars in millions)

|                                                 |                                                                                                             |   |              |           |      |   |          |           |  
|------------------------------------------------ | ----------------------------------------------------------------------------------------------------------- | - | ------------ | --------- | ---- | - | -------- | --------- | -
|                                                 |                                                                                                             |   | December 31,
|                                                 |                                                                                                             |   |             
|                                                 |                                                                                                             |   | 2002         |           | 2001
|                                                 |                                                                                                             |   |              |           |     
|Liabilities and shareholders (deficiency)       |                                                                                                             |   |              |           |      |   |          |          
|Liabilities not subject to compromise            |                                                                                                             |   |              |           |      |   |          |          
|Current liabilities:                             |                                                                                                             |   |              |           |      |   |          |          
|                                                 | Accounts payable                                                                                            |   | $            | 385.8     |      |   | $        | 390.5     |  
|                                                 | Accrued expenses and other                                                                                  |   |              | 780.5     |      |   |          | 840.3     |  
|                                                 | Accrued construction costs                                                                                  |   |              | 70.4      |      |   |          | 107.8     |  
|                                                 | Interest payable                                                                                            |   |              | 177.3     |      |   |          | 252.0     |  
|                                                 | Deferred revenue                                                                                            |   |              | 359.8     |      |   |          | 290.2     |  
|                                                 | Due to NTL Europe, Inc.                                                                                     |   |              | 236.1     |      |   |          |          |  
|                                                 | Current portion of long-term debt                                                                           |   |              | 5,955.4   |      |   |          | 14,205.9  |  
|                                                 |                                                                                                             |   |              |           |      |   |          |          
|Total current liabilities                        |                                                                                                             |   | 7,965.3      |           |      |   | 16,086.7 |          
|Long-term debt                                   |                                                                                                             |   |             |           |      |   |         |          
|Other                                            |                                                                                                             |   |             |           |      |   | 8.9      |          
|Deferred income taxes                            |                                                                                                             |   | 94.4         |           |      |   | 113.8    |          
|Commitments and contingent liabilities           |                                                                                                             |   |              |           |      |   |          |          
|Liabilities subject to compromise                |                                                                                                             |   | 10,157.8     |           |      |   |         |          
|Shareholders (deficiency):                      |                                                                                                             |   |              |           |      |   |          |          
|                                                 | Common stock - $.01 par value; authorized 100 shares;
issued and outstanding 13 (2002) and 13 (2001) shares |   |              |          |      |   |          |          |  
|                                                 | Additional paid-in capital                                                                                  |   |              | 14,045.5  |      |   |          | 13,917.7  |  
|                                                 | Accumulated other comprehensive (loss)                                                                      |   |              | (653.6    | )    |   |          | (904.5    | )
|                                                 | (Deficit)                                                                                                   |   |              | (18,568.0 | )    |   |          | (16,192.2 | )
|                                                 |                                                                                                             |   |              |           |      |   |          |          
|                                                 |                                                                                                             |   | (5,176.1     | )         |      |   | (3,179.0 | )        
|                                                 |                                                                                                             |   |              |           |      |   |          |          
|Total liabilities and shareholders (deficiency) |                                                                                                             | $ | 13,041.4     |           |      | $ | 13,030.4 |          
|                                                 |                                                                                                             |   |              |           |      |   |          |          

See accompanying notes.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Operations
(in millions)

|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|--------------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                                      |  | Year Ended December 31,
|                                                                      |  |                        
|                                                                      |  | 2002                    |          | 2001 |  | 2000
|                                                                      |  |                         |          |      |  |     
|Revenues                                                              |  |                         |          |      |  |      |           |   |  |   |          |  
|Consumer telecommunications and television                            |  | $                       | 2,074.1  |      |  | $    | 2,069.2   |   |  | $ | 1,518.2  |  
|Business telecommunications                                           |  |                         | 880.1    |      |  |      | 836.8     |   |  |   | 702.2    |  
|Broadcast transmission and other                                      |  |                         | 310.9    |      |  |      | 283.6     |   |  |   | 263.8    |  
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|                                                                      |  |                         | 3,265.1  |      |  |      | 3,189.6   |   |  |   | 2,484.2  |  
|Costs and expenses                                                    |  |                         |          |      |  |      |           |   |  |   |          |  
|Operating expenses (exclusive of depreciation shown
separately below) |  |                         | 1,502.5  |      |  |      | 1,564.3   |   |  |   | 1,223.2  |  
|Selling, general and administrative expenses                          |  |                         | 769.8    |      |  |      | 973.2     |   |  |   | 969.1    |  
|Asset impairments                                                     |  |                         | 445.1    |      |  |      | 8,160.6   |   |  |   |         |  
|Non-cash compensation                                                 |  |                         |         |      |  |      | 30.6      |   |  |   |         |  
|Other charges                                                         |  |                         | 389.2    |      |  |      | 297.9     |   |  |   | 92.7     |  
|Corporate expenses                                                    |  |                         | 18.7     |      |  |      | 24.3      |   |  |   | 23.7     |  
|Depreciation                                                          |  |                         | 1,477.9  |      |  |      | 1,361.4   |   |  |   | 874.4    |  
|Amortization                                                          |  |                         | 63.7     |      |  |      | 1,178.9   |   |  |   | 826.3    |  
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|                                                                      |  |                         | 4,666.9  |      |  |      | 13,591.2  |   |  |   | 4,009.4  |  
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|Operating (loss)                                                      |  |                         | (1,401.8 | )    |  |      | (10,401.6 | ) |  |   | (1,525.2 | )
|Other income (expense)                                                |  |                         |          |      |  |      |           |   |  |   |          |  
|Interest income and other, net                                        |  |                         | 21.0     |      |  |      | 28.8      |   |  |   | 25.8     |  
|Interest income  NTL Europe, Inc.                                    |  |                         | 8.8      |      |  |      | 5.8       |   |  |   |         |  
|Interest expense (contractual interest of $1,425.4 (2002))            |  |                         | (762.5   | )    |  |      | (1,240.8  | ) |  |   | (886.3   | )
|Interest expense  NTL Europe, Inc.                                   |  |                         | (17.7    | )    |  |      |          |   |  |   |         |  
|Share of (losses) from equity investments                             |  |                         | (3.4     | )    |  |      | (23.2     | ) |  |   | (24.2    | )
|Other (losses)                                                        |  |                         |         |      |  |      | (88.5     | ) |  |   |         |  
|Foreign currency transaction (losses) gains                           |  |                         | (94.1    | )    |  |      | 0.6       |   |  |   | (58.1    | )
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) before recapitalization items and income taxes                 |  |                         | (2,249.7 | )    |  |      | (11,718.9 | ) |  |   | (2,468.0 | )
|Recapitalization items, net                                           |  |                         | (151.8   | )    |  |      |          |   |  |   |         |  
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) before income taxes                                            |  |                         | (2,401.5 | )    |  |      | (11,718.9 | ) |  |   | (2,468.0 | )
|Income tax benefit (expense)                                          |  |                         | 25.7     |      |  |      | (118.1    | ) |  |   | 79.9     |  
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|Net (loss)                                                            |  | $                       | (2,375.8 | )    |  | $    | (11,837.0 | ) |  | $ | (2,388.1 | )
|                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  

See accompanying notes.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Shareholders Equity (Deficiency)
(dollars in millions)

|                                              |       |  |                |   |            |   |         |  |  |   |          |  | 
|--------------------------------------------- | ----- |  | -------------- | - | ---------- | - | ------- |  |  | - | -------- |  | 
|                                              |       |  | Common Stock   |   |            |   |        
|                                              |       |  | $.01 Par Value |   | Additional
|                                              |       |  |                |   | Paid-In   
|                                              |       |  | Shares         |   | Par        |   | Capital
|                                              |       |  |                |   |            |   |        
|Balance, December 31, 1999                    |       |  | 100            |   |            | $ |        |  |  | $ | 3,031.3  | 
|Contributions from NTL (Delaware), Inc        |       |  |                |   |            |   |         |  |  |   | 10,715.4 | 
|Corporate restructuring                       |       |  | (87            | ) |            |   |         |  |  |   |          | 
|Comprehensive loss:                           |       |  |                |   |            |   |         |  |  |   |          | 
|Net loss for the year ended December 31, 2000 |       |  |                |   |            |   |         |  |  |   |          | 
|Currency translation adjustment               |       |  |                |   |            |   |         |  |  |   |          | 
|                                              | Total |  |                |   |            |   |         |  |  |   |          |  | 
|                                              |       |  |                |   |            |   |         |  |  |   |          | 
|Balance, December 31, 2000                    |       |  | 13             |   |            |   |        |  |  |   | 13,746.7 | 
|Contribution from NTL (Delaware), Inc., net   |       |  |                |   |            |   |         |  |  |   | 140.4    | 
|Non-cash compensation                         |       |  |                |   |            |   |         |  |  |   | 30.6     | 
|Comprehensive loss:                           |       |  |                |   |            |   |         |  |  |   |          | 
|Net loss for the year ended December 31, 2001 |       |  |                |   |            |   |         |  |  |   |          | 
|Currency translation adjustment               |       |  |                |   |            |   |         |  |  |   |          | 
|Unrealized net losses on derivatives          |       |  |                |   |            |   |         |  |  |   |          | 
|                                              | Total |  |                |   |            |   |         |  |  |   |          |  | 
|                                              |       |  |                |   |            |   |         |  |  |   |          | 
|Balance, December 31, 2001                    |       |  | 13             |   |            |   |        |  |  |   | 13,917.7 | 
|Contribution from NTL (Delaware), Inc., net   |       |  |                |   |            |   |         |  |  |   | 127.8    | 
|Comprehensive loss:                           |       |  |                |   |            |   |         |  |  |   |          | 
|Net loss for the year ended December 31, 2002 |       |  |                |   |            |   |         |  |  |   |          | 
|Currency translation adjustment               |       |  |                |   |            |   |         |  |  |   |          | 
|Pension liability adjustment                  |       |  |                |   |            |   |         |  |  |   |          | 
|Unrealized net gains on derivatives           |       |  |                |   |            |   |         |  |  |   |          | 
|                                              | Total |  |                |   |            |   |         |  |  |   |          |  | 
|                                              |       |  |                |   |            |   |         |  |  |   |          | 
|Balance, December 31, 2002                    |       |  | 13             |   |            | $ |        |  |  | $ | 14,045.5 | 
|                                              |       |  |                |   |            |   |         |  |  |   |          | 

See accompanying notes.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Statement of Shareholders Equity (Deficiency) - continued
(dollars in millions)

|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |   | 
|--------------------------------------------- | ----- | - | ------------- | --------- | ----------- | - | ----------------- | - | ----------- | - | --------- | - |  | - | ---------- | - |  | - | --------- | - | 
|                                              |       |   |               |           |             |   | Accumulated Other |   |             |   |          
|                                              |       |   |               |           |             |   | Comprehensive     |   |             |   |          
|                                              |       |   |               |           |             |   | (Loss)            |   |             |   |          
|                                              |       |   |               |           |             |   |                   |   |             |   |          
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   | Net        |   |  |   |          
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   | Unrealized |   |  |   |          
|                                              |       |   |               |           |             |   | Foreign           |   | Pension     |   | (Losses)  |   |  |   |           
|                                              |       |   | Comprehensive |           | Currency    |   | Liability         |   | Gains on    |   |           |   | 
|                                              |       |   | (Loss)        |           | Translation |   | Adjustments       |   | Derivatives |   | (Deficit)
|                                              |       |   |               |           |             |   |                   |   |             |   |          
|Balance, December 31, 1999                    |       |   |               |           |             | $ | 1.8               |   |             |   |           |   |  |   |            |   |  | $ | (1,967.1  | )
|Contributions from NTL (Delaware), Inc        |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Corporate restructuring                       |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Comprehensive loss:                           |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Net loss for the year ended December 31, 2000 |       | $ | (2,388.1      | )         |             |   |                   |   |             |   |           |   |  |   |            |   |  |   | (2,388.1  | )
|Currency translation adjustment               |       |   | (381.1        | )         |             |   | (381.1            | ) |             |   |           |   |  |   |            |   |  |   |           |  
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|                                              | Total |   | $             | (2,769.2  | )           |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |   | 
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Balance, December 31, 2000                    |       |   |               |           |             |   | (379.3            | ) |             |   |           |   |  |   |            |   |  |   | (4,355.2  | )
|Contribution from NTL (Delaware), Inc., net   |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Non-cash compensation                         |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Comprehensive loss:                           |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Net loss for the year ended December 31, 2001 |       | $ | (11,837.0     | )         |             |   |                   |   |             |   |           |   |  |   |            |   |  |   | (11,837.0 | )
|Currency translation adjustment               |       |   | (521.6        | )         |             |   | (521.6            | ) |             |   |           |   |  |   |            |   |  |   |           |  
|Unrealized net losses on derivatives          |       |   | (3.6          | )         |             |   |                   |   |             |   |           |   |  | $ | (3.6       | ) |  |   |           |  
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|                                              | Total |   | $             | (12,362.2 | )           |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |   | 
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Balance, December 31, 2001                    |       |   |               |           |             |   | (900.9            | ) |             |   |           |   |  |   | (3.6       | ) |  |   | (16,192.2 | )
|Contribution from NTL (Delaware), Inc., net   |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Comprehensive loss:                           |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Net loss for the year ended December 31, 2002 |       | $ | (2,375.8      | )         |             |   |                   |   |             |   |           |   |  |   |            |   |  |   | (2,375.8  | )
|Currency translation adjustment               |       |   | 351.0         |           |             |   | 351.0             |   |             |   |           |   |  |   |            |   |  |   |           |  
|Pension liability adjustment                  |       |   | (103.7        | )         |             |   |                   |   |             | $ | (103.7    | ) |  |   |            |   |  |   |           |  
|Unrealized net gains on derivatives           |       |   | 3.6           |           |             |   |                   |   |             |   |           |   |  |   | 3.6        |   |  |   |           |  
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|                                              | Total |   | $             | (2,124.9  | )           |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |   | 
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  
|Balance, December 31, 2002                    |       |   |               |           |             | $ | (549.9            | ) |             | $ | (103.7    | ) |  | $ |           |   |  | $ | (18,568.0 | )
|                                              |       |   |               |           |             |   |                   |   |             |   |           |   |  |   |            |   |  |   |           |  

See accompanying notes.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Cash Flows
(in millions)

|                                                                                                        |                                                                 |   |                         |         |      |   |           |         |   |   |          |         |  
|------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | - | ----------------------- | ------- | ---- | - | --------- | ------- | - | - | -------- | ------- | -
|                                                                                                        |                                                                 |   | Year Ended December 31,
|                                                                                                        |                                                                 |   |                        
|                                                                                                        |                                                                 |   | 2002                    |         | 2001 |   | 2000     
|                                                                                                        |                                                                 |   |                         |         |      |   |          
|Operating activities                                                                                    |                                                                 |   |                         |         |      |   |           |         |   |   |          |        
|Net (loss)                                                                                              |                                                                 | $ | (2,375.8                | )       |      | $ | (11,837.0 | )       |   | $ | (2,388.1 | )      
|Adjustment to reconcile net (loss) to net cash provided by
(used in) operating activities:              |                                                                 |   |                         |         |      |   |           |         |   |   |          |        
|                                                                                                        | Depreciation and amortization                                   |   |                         | 1,541.6 |      |   |           | 2,540.3 |   |   |          | 1,700.7 |  
|                                                                                                        | Asset impairments                                               |   |                         | 445.1   |      |   |           | 8,160.6 |   |   |          |        |  
|                                                                                                        | Non-cash compensation                                           |   |                         |        |      |   |           | 30.6    |   |   |          |        |  
|                                                                                                        | Non-cash restructuring charge                                   |   |                         | 7.5     |      |   |           | 57.9    |   |   |          |        |  
|                                                                                                        | Equity in losses of unconsolidated subsidiaries                 |   |                         | 3.4     |      |   |           | 23.2    |   |   |          | 24.2    |  
|                                                                                                        | Loss on sale of assets                                          |   |                         |        |      |   |           | 88.5    |   |   |          |        |  
|                                                                                                        | Provision for losses on accounts receivable                     |   |                         | 55.2    |      |   |           | 58.3    |   |   |          | 98.5    |  
|                                                                                                        | Provision for cancellation of receivables from NTL Europe, Inc. |   |                         | 284.4   |      |   |           |        |   |   |          |        |  
|                                                                                                        | Deferred income taxes                                           |   |                         | (29.3   | )    |   |           | 116.4   |   |   |          | (80.8   | )
|                                                                                                        | Amortization of original issue discount                         |   |                         | 96.7    |      |   |           | 284.7   |   |   |          | 473.1   |  
|                                                                                                        | Other                                                           |   |                         | 145.1   |      |   |           | (16.7   | ) |   |          | (98.0   | )
|Changes in operating assets and liabilities, net of effect
from business acquisitions and dispositions: |                                                                 |   |                         |         |      |   |           |         |   |   |          |        
|                                                                                                        | Accounts receivable                                             |   |                         | 108.9   |      |   |           | (31.3   | ) |   |          | (247.9  | )
|                                                                                                        | Other current assets                                            |   |                         | 72.5    |      |   |           | 23.5    |   |   |          | (41.8   | )
|                                                                                                        | Other assets                                                    |   |                         | 0.1     |      |   |           | 56.1    |   |   |          | 42.4    |  
|                                                                                                        | Accounts payable                                                |   |                         | (144.5  | )    |   |           | (38.8   | ) |   |          | (102.2  | )
|                                                                                                        | Accrued expenses and other                                      |   |                         | 12.6    |      |   |           | (81.9   | ) |   |          | 330.3   |  
|                                                                                                        | Deferred revenue                                                |   |                         | 35.2    |      |   |           | 7.0     |   |   |          | 120.6   |  
|                                                                                                        |                                                                 |   |                         |         |      |   |           |         |   |   |          |        
|Net cash provided by (used in) operating activities                                                     |                                                                 |   | 258.7                   |         |      |   | (558.6    | )       |   |   | (169.0   | )      
|Investing activities                                                                                    |                                                                 |   |                         |         |      |   |           |         |   |   |          |        
|Acquisitions, net of cash acquired                                                                      |                                                                 |   |                        |         |      |   | (26.2     | )       |   |   | (7,514.9 | )      
|Purchase of fixed assets                                                                                |                                                                 |   | (680.9                  | )       |      |   | (1,653.0  | )       |   |   | (1,961.8 | )      
|Investments in and loans to affiliates                                                                  |                                                                 |   | (6.7                    | )       |      |   | (12.0     | )       |   |   | (27.8    | )      
|Increase in other assets                                                                                |                                                                 |   | (166.5                  | )       |      |   | (31.6     | )       |   |   | (7.2     | )      
|Loan to NTL Europe, Inc.                                                                                |                                                                 |   |                        |         |      |   | (150.0    | )       |   |   |         |        
|Proceeds from sales of assets                                                                           |                                                                 |   | 15.1                    |         |      |   | 14.6      |         |   |   |         |        
|Purchase of marketable securities                                                                       |                                                                 |   | (10.8                   | )       |      |   | (9.9      | )       |   |   | (3.3     | )      
|Proceeds from sales of marketable securities                                                            |                                                                 |   | 5.6                     |         |      |   | 10.0      |         |   |   | 8.3      |        
|                                                                                                        |                                                                 |   |                         |         |      |   |           |         |   |   |          |        
|Net cash (used in) investing activities                                                                 |                                                                 |   | (844.2                  | )       |      |   | (1,858.1  | )       |   |   | (9,506.7 | )      

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries
Consolidated Statements of Cash Flows - continued
(in millions)

|                                                                        |  |                         |       |      |  |      |         |   |  |   |          |  
|----------------------------------------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ------- | - |  | - | -------- | -
|                                                                        |  | Year Ended December 31,
|                                                                        |  |                        
|                                                                        |  | 2002                    |       | 2001 |  | 2000
|                                                                        |  |                         |       |      |  |     
|Financing activities                                                    |  |                         |       |      |  |      |         |   |  |   |          |  
|Proceeds from borrowing from NTL (Delaware), Inc.                       |  |                         | 135.2 |      |  |      |        |   |  |   |         |  
|Proceeds from borrowings, net of financing costs                        |  |                         | 670.1 |      |  |      | 2,643.4 |   |  |   | 5,009.8  |  
|Principal payments                                                      |  |                         | (8.6  | )    |  |      | (421.5  | ) |  |   | (1,263.9 | )
|Contribution from NTL (Delaware), Inc.                                  |  |                         | 3.9   |      |  |      | 40.8    |   |  |   | 5,227.2  |  
|Distribution to NTL (Delaware), Inc.                                    |  |                         |      |      |  |      | (10.6   | ) |  |   |         |  
|Cash released from escrow for debt repayment                            |  |                         |      |      |  |      |        |   |  |   | 77.5     |  
|                                                                        |  |                         |       |      |  |      |         |   |  |   |          |  
|Net cash provided by financing activities                               |  |                         | 800.6 |      |  |      | 2,252.1 |   |  |   | 9,050.6  |  
|Effect of exchange rate changes on cash                                 |  |                         | 35.8  |      |  |      | (7.8    | ) |  |   | (25.6    | )
|                                                                        |  |                         |       |      |  |      |         |   |  |   |          |  
|Increase (decrease) increase in cash and cash equivalents               |  |                         | 250.9 |      |  |      | (172.4  | ) |  |   | (650.7   | )
|Cash and cash equivalents at beginning of year                          |  |                         | 251.1 |      |  |      | 423.5   |   |  |   | 1,074.2  |  
|                                                                        |  |                         |       |      |  |      |         |   |  |   |          |  
|Cash and cash equivalents at end of year                                |  | $                       | 502.0 |      |  | $    | 251.1   |   |  | $ | 423.5    |  
|                                                                        |  |                         |       |      |  |      |         |   |  |   |          |  
|Supplemental disclosure of cash flow information                        |  |                         |       |      |  |      |         |   |  |   |          |  
|Cash paid during the year for interest exclusive of amounts
capitalized |  | $                       | 410.0 |      |  | $    | 776.6   |   |  | $ | 363.9    |  
|Income taxes paid                                                       |  |                         | 1.4   |      |  |      | 0.1     |   |  |   | 1.5      |  
|Supplemental schedule of non-cash financing activities                  |  |                         |       |      |  |      |         |   |  |   |          |  
|Contribution from NTL (Delaware), Inc.                                  |  | $                       | 123.9 |      |  | $    | 110.2   |   |  | $ | 5,488.2  |  
|Conversion of notes, net of unamortized deferred financing costs        |  |                         |      |      |  |      | 109.5   |   |  |   |         |  

See accompanying notes.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements

1.     Organization and Business

NTLs Completed Restructuring

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

The accompanying financial statements
do not reflect any adjustments in connection with the Companys
emergence from Chapter 11 reorganization.

Pursuant to the Plan, the entity formerly known as NTL Incorporated and its
subsidiaries and affiliates were split into two separate groups, and the
Company and NTL Europe, Inc. each emerged as independent public companies. The
entity formerly known as NTL Communications Corp. was renamed NTL
Incorporated and became the holding company for the former NTL groups
principal UK and Ireland assets. Prior to consummation of the Plan, the
Company was a wholly-owned subsidiary of the entity then known as NTL
Incorporated, which, pursuant to the Plan, was renamed NTL Europe, Inc. and
which became the holding company for the former NTL groups continental
European and certain other assets. Pursuant to the Plan, all of the
outstanding securities of the Companys former ultimate parent company (NTL
Europe, Inc.) and certain of its subsidiaries, including the Company, were
cancelled, and the Company issued shares of its common stock and Series A
warrants and NTL Europe, Inc. issued shares of its common stock and preferred
stock to various former creditors and stockholders of the Companys former
ultimate parent company and its subsidiaries, including the Company. The
precise mix of new securities received by holders of each particular type of
security of the Companys former ultimate parent company and its subsidiaries
was set forth in the Plan. The outstanding notes of Diamond Holding Limited
and NTL (Triangle) LLC were not canceled and remain outstanding.

Historical Structure of the Company

The Company was incorporated in 1993 as a Delaware corporation and continued as
a publicly-traded holding company until February 1999. From February 1999 until
the Effective Date, the Company was a wholly-owned subsidiary of NTL
(Delaware), Inc., a Delaware corporation, which was incorporated in February
1999, to effect a reorganization into a holding company structure under Section
251(g) of the Delaware General Corporation Law. The holding company structure
was implemented to pursue opportunities outside of the UK and Ireland, and was
accomplished through a merger. The Companys stockholders at the time became
stockholders of the new holding company NTL (Delaware), Inc., and the Company
became a wholly-owned subsidiary of the new holding company. The new holding
company took the name NTL Incorporated until May 2000 when it was changed to
NTL (Delaware), Inc., its current name.

In May 2000 another new holding company structure was implemented in connection
with the acquisition of the residential assets of Cable & Wireless
Communications plc (CWC) (the operations acquired from CWC are called
ConsumerCo), and was similarly accomplished through a merger. The
stockholders of NTL (Delaware), Inc. became stockholders of the new holding
company, and NTL (Delaware), Inc. became a subsidiary of the new holding
company, and the Company remained a subsidiary of NTL (Delaware), Inc. (NTL
Delaware). The new holding company then took the name NTL Incorporated until
the Effective Date of the Plan (January 10, 2003), at which time its name was
changed to NTL Europe, Inc. (NTL Europe). The Company remained a subsidiary
of those two holding companies until the Effective Date, at which time NTL
Europe and its wholly owned subsidiary NTL Delaware were separated from the
Company pursuant to the Plan.

On February 21, 2001, the Companys former ultimate parent company contributed
the assets of ConsumerCo to the Company and NTL Delaware contributed the assets
of NTL Business Limited (formerly Workplace Technologies plc) (NTL Business)
to the Company. NTL Group Limited, a wholly-owned indirect subsidiary of the
Company, which was acquired in 1996, has a 30-year history in the UK as a
provider of reliable communications services.

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

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial
Statements(continued)

1.     Organization and Business (continued)

Business

The Company, through its direct and
indirect wholly-owned subsidiaries, owns and operates broadband
communications networks for telephone, cable television and Internet services
in the United Kingdom and Ireland, and transmission networks for television and
radio broadcasting in the United Kingdom. Based on revenues and identifiable
assets, the Companys predominant lines of business are consumer services,
business services and broadcast transmission and related services in the United
Kingdom. Consumer services include residential 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.     Reorganization and Emergence from Chapter 11

Background of Restructuring

Both the equity and debt capital markets experienced periods of significant
volatility in 2001 and 2002, particularly for securities issued by
telecommunications and technology companies. As a result, the ability of the
Companys former ultimate parent company and its subsidiaries to access those
markets as well as its ability to obtain financing from its bank lenders and
equipment suppliers became severely restricted. In addition, the Companys
former ultimate parent company and its subsidiaries, including the Company, had
no further funds available, or were unable to draw upon funds, under the
Companys credit facilities. As a result of these factors, together with its
substantial leverage, on January 31, 2002, the Companys former ultimate parent
company announced that it had appointed professional advisors to advise on
strategic and recapitalization alternatives to strengthen its balance sheet,
reduce debt and put an appropriate capital structure in place for its business.

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

The Companys former ultimate parent company and its subsidiaries failed to
make interest payments on some of the outstanding notes starting on April 1,
2002. The Companys former ultimate parent company also failed to declare or
pay dividends on certain series of its outstanding preferred stock due to a
lack of available surplus under Delaware law.

On April 16, 2002, the Companys former ultimate parent company announced that
it and an unofficial committee of its bondholders had reached an
agreement in principle on a comprehensive recapitalization of the former NTL
group. To implement the proposed recapitalization plan, on May 8, 2002, the
Company, the Companys former ultimate parent company and certain of the other
subsidiaries of the Companys former ultimate parent company filed cases and a
pre-arranged joint reorganization plan under Chapter 11 of the U.S. Bankruptcy
Code. In connection with the filing, some members of the unofficial creditors
committee of bondholders entered into a credit facility agreement (referred to
as the DIP facility) committing to provide a wholly-owned subsidiary of the
Company with up to $500.0 million in new debt financing (NTL Delaware
committed to provide up to an additional $130.0 million under the DIP
facility.)

As a result of the payment defaults as well as the voluntary filing under
Chapter 11 by the Companys former ultimate parent company and certain of its
subsidiaries on May 8, 2002, there was an event of default under all of the
Companys former ultimate parent company and its subsidiaries credit
facilities and the indentures governing all of their publicly traded debt,
other than debt of NTL (Triangle) LLC.

The Plan was confirmed by the Bankruptcy Court on September 5, 2002. During
the fall of 2002, the Companys former ultimate parent company negotiated with
a group of lenders to enter into a new financing arrangement to repay the DIP
facility, to repay certain obligations and to provide liquidity to the Company
and its subsidiaries. The Plan became effective on January 10, 2003, at which
time the Company emerged from Chapter 11 reorganization. In connection with
the Companys emergence from Chapter 11 reorganization, the Company and certain
of its subsidiaries issued $558.249 million aggregate principal face amount of
19% Senior Secured Notes due 2010 (the Exit Notes) on January 10, 2003.
Initial purchasers of the Companys Exit Notes also purchased 500,000 shares of
the Companys common stock on that date. The gross proceeds from the sale of
the Exit Notes and
such shares totaled $500.0 million. The proceeds were used in part to repay
amounts outstanding under the DIP facility and to

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial
Statements (continued)

2.     Reorganization and Emergence from Chapter 11 (continued)

purchase from NTL Delaware a £90.0 million note of NTL (UK) Group Inc. and to
repay certain other obligations. Also on January 10, 2003, the Company and its
lending banks amended the Companys existing credit facilities.

We have historically incurred operating losses and negative operating cash
flow. In addition, we required and expect to continue to require significant
amounts of capital to finance construction of our networks, connection of
customers to the networks, other capital expenditures and for working capital
needs including debt service requirements.

We
currently expect that we will require approximately
£310 million ($499 million) to fund our working capital including debt service, capital
expenditures, and payments made on the Effective Date pursuant to the Plan and
the amendment of our existing credit facilities, net of cash from operations,
in the twelve months from January 1, 2003 to December 31,
2003. A significant portion of the £310 million total relates to
payments made on the Effective Date. We believe
that cash, cash equivalents and marketable securities on hand of $507.2 million
as of December 31, 2002, plus the proceeds from sale of the Exit Notes and
500,000 shares of common stock of $500.0 million, will be sufficient for our
cash requirements during the twelve months from January 1, 2003 to December 31,
2003.

Recapitalization Expense

The joint reorganization plan provided that recapitalization costs be
allocated between the Company and NTL Europe.

Recapitalization items, net consist of the following:

|                                                                   |  |               |        |      |  |      |   |  |  |   |   | 
|------------------------------------------------------------------ |  | ------------- | ------ | ---- |  | ---- | - |  |  | - | - | 
|                                                                   |  | Year Ended   
|                                                                   |  | December 31, 
|                                                                   |  |              
|                                                                   |  | 2002          |        | 2001 |  | 2000
|                                                                   |  |               |        |      |  |     
|                                                                   |  | (in millions)
|Payroll and related                                                |  | $             | (36.2  | )    |  | $    |  |  |  | $ |  | 
|Professional fees                                                  |  |               | (116.7 | )    |  |      |  |  |  |   |  | 
|Interest earned on accumulated cash from
Chapter 11 proceeding (1) |  |               | 1.1    |      |  |      |  |  |  |   |  | 
|                                                                   |  |               |        |      |  |      |   |  |  |   |   | 
|                                                                   |  | $             | (151.8 | )    |  | $    |  |  |  | $ |  | 
|                                                                   |  |               |        |      |  |      |   |  |  |   |   | 

Details of operating cash receipts and payments resulting from the
recapitalization are as follows:

|                                                     |  |                   |       |  
|---------------------------------------------------- |  | ----------------- | ----- | -
|                                                     |  | Year Ended       
|                                                     |  | December 31, 2002
|                                                     |  |                  
|                                                     |  | (in millions)    
|Interest income (1)                                  |  | $                 | 1.1   |  
|Payroll and related costs paid                       |  |                   | (32.9 | )
|Professional fees                                    |  |                   | (39.0 | )
|                                                     |  |                   |       |  
|Net operating cash flows from recapitalization items |  | $                 | (70.8 | )
|                                                     |  |                   |       |  

(1)  Interest income resulting from the recapitalization is for the period May
8, 2002 through December 31, 2002.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements(continued)

2.     Reorganization and Emergence from Chapter 11 (continued)

Pro Forma Consolidated Balance Sheet

The following pro forma consolidated balance sheet as of December 31, 2002
gives effect to the Companys emergence from Chapter 11 reorganization and the
adoption of fresh-start reporting as if both had occurred on December 31, 2002.
The Company adopted fresh-start reporting in January 2003 in accordance with
AICPA Statement of Position 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code ( SOP 90-7). The Company adopted
fresh-start reporting because the holders of its voting common shares
immediately before filing and confirmation of the Plan received less than 50%
of the voting shares of the emerging company, and because the Companys
reorganization value is less than its post-petition liabilities and allowed
claims.

The adjustments entitled Emergence from Chapter 11 reflect the consummation
of the Plan, including the cancellation of a substantial portion of the
Companys outstanding debt and the issuance of shares of new common stock and
Series A warrants to various former creditors and stockholders of the Companys
former ultimate parent company and certain of its subsidiaries, including the
Company. The adjustments entitled Fresh-Start reflect the adoption of
fresh-start reporting. The Company engaged an independent financial advisor to
assist in the determination of the reorganization value (or fair value) of its
assets and the present value of its liabilities. This determination resulted in
the fresh-start reporting adjustments to write-down fixed assets and write-up
intangible assets to their fair values. In addition, the Companys total
reorganization value exceeded the amounts allocable to identifiable assets that
resulted in a new indefinite-lived intangible asset.

The emergence from Chapter 11 and the adoption of fresh-start reporting in
January 2003 resulted in the following items of income
(expense) that will be recognized in the Companys financial
statements for the quarter ended March 31, 2003:

|                                              |  |   |               |  
|--------------------------------------------- |  | - | ------------- | -
|                                              |  |   | (in millions)
|                                              |  |   |               |  
|Gain on debt discharge                        |  | $ | 8,452         |  
|Fresh-start adoption  intangible assets      |  |   | 1,522         |  
|Fresh-start adoption  long-term debt         |  |   | 221           |  
|Fresh-start adoption  deferred tax liability |  |   | (69           | )
|Fresh-start adoption  accrued expenses       |  |   | (120          | )
|Fresh-start adoption  fixed assets           |  |   | (3,195        | )
|                                              |  |   |               |  
|TOTAL                                         |  | $ | 6,811         |  
|                                              |  |   |               |  

|                                                                           |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |       | 
|-------------------------------------------------------------------------- | --------------------------------------------------------------- | - | ------------- | ----- | ---------- | - | -------------- | ----- | --------- | - | -------- | - |  | - | -------- | ----- | 
|                                                                           |                                                                 |   |               |       |            |   | Emergence from |       | Fresh-    |   |          |   | 
|                                                                           |                                                                 |   | Historical    |       | Chapter 11 |   | Start          |       | Pro Forma
|                                                                           |                                                                 |   |               |       |            |   |                |       |          
|                                                                           |                                                                 |   | (in millions)
|Assets                                                                     |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      
|Current assets:                                                            |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      
|                                                                           | Cash and cash equivalents                                       |   | $             | 502.0 |            |   | $              | 138.7 |           |   | $        |  |  |   | $        | 640.7 | 
|                                                                           | Marketable securities                                           |   |               | 5.2   |            |   |                |      |           |   |          |  |  |   |          | 5.2   | 
|                                                                           | Accounts receivable-trade, less
allowance for doubtful accounts |   |               | 395.9 |            |   |                |      |           |   |          |  |  |   |          | 395.9 | 
|                                                                           | Due from affiliates                                             |   |               | 1.6   |            |   |                |      |           |   |          |  |  |   |          | 1.6   | 
|                                                                           | Other                                                           |   |               | 192.7 |            |   |                |      |           |   |          |  |  |   |          | 192.7 | 
|                                                                           | Due from NTL Europe, Inc.                                       |   |               | 73.3  |            |   |                | (72.4 | )         |   |          |  |  |   |          | 0.9   | 
|                                                                           |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      
|Total current assets                                                       |                                                                 |   | 1,170.7       |       |            |   | 66.3           |       |           |   |         |   |  |   | 1,237.0  |      
|Fixed assets, net                                                          |                                                                 |   | 11,088.9      |       |            |   |               |       |           |   | (3,194.9 | ) |  |   | 7,894.0  |      
|Intangible assets, net                                                     |                                                                 |   | 395.3         |       |            |   |               |       |           |   | 868.4    |   |  |   | 1,263.7  |      
|Investments in and loans to affiliates, net                                |                                                                 |   | 8.4           |       |            |   |               |       |           |   |         |   |  |   | 8.4      |      
|Reorganization value in excess of
amounts allocable to identifiable assets |                                                                 |   |              |       |            |   |               |       |           |   | 653.3    |   |  |   | 653.3    |      
|Other assets, net                                                          |                                                                 |   | 378.1         |       |            |   | (187.0         | )     |           |   |         |   |  |   | 191.1    |      
|                                                                           |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      
|Total assets                                                               |                                                                 | $ | 13,041.4      |       |            | $ | (120.7         | )     |           | $ | (1,673.2 | ) |  | $ | 11,247.5 |      
|                                                                           |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      
|Liabilities and shareholders (deficiency) equity                          |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      
|Liabilities not subject to compromise                                      |                                                                 |   |               |       |            |   |                |       |           |   |          |   |  |   |          |      

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to consolidated Financial Statements (continued)

|                                                        |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |         | 
|------------------------------------------------------- | -------------------------------------- | - | ------------- | --------- | ---------- | - | -------------- | -------- | --------- | - | -------- | --------- | - | - | -------- | ------- | 
|                                                        |                                        |   |               |           |            |   | Emergence from |          | Fresh-    |   |          |           |  
|                                                        |                                        |   | Historical    |           | Chapter 11 |   | Start          |          | Pro Forma
|                                                        |                                        |   |               |           |            |   |                |          |          
|                                                        |                                        |   | (in millions)
|Current liabilities:                                    |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |        
|                                                        | Accounts payable                       |   | $             | 385.8     |            |   | $              | 0.7      |           |   | $        |          |   |   | $        | 386.5   | 
|                                                        | Accrued expenses and other             |   |               | 780.5     |            |   |                | 6.6      |           |   |          | (32.7     | ) |   |          | 754.4   | 
|                                                        | Accrued construction costs             |   |               | 70.4      |            |   |                |         |           |   |          |          |   |   |          | 70.4    | 
|                                                        | Interest payable                       |   |               | 177.3     |            |   |                | 38.0     |           |   |          |          |   |   |          | 215.3   | 
|                                                        | Deferred revenue                       |   |               | 359.8     |            |   |                |         |           |   |          |          |   |   |          | 359.8   | 
|                                                        | Due to NTL Europe, Inc.                |   |               | 236.1     |            |   |                | (234.6   | )         |   |          |          |   |   |          | 1.5     | 
|                                                        | Current portion of long-term debt      |   |               | 5,955.4   |            |   |                | (5,952.3 | )         |   |          |          |   |   |          | 3.1     | 
|                                                        |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |        
|Total current liabilities                               |                                        |   | 7,965.3       |           |            |   | (6,141.6       | )        |           |   | (32.7    | )         |   |   | 1,791.0  |        
|Long-term debt                                          |                                        |   |              |           |            |   | 6,540.1        |          |           |   |         |           |   |   | 6,540.1  |        
|Long-term debt discount                                 |                                        |   |              |           |            |   |               |          |           |   | (221.3   | )         |   |   | (221.3   | )      
|Other                                                   |                                        |   |              |           |            |   |               |          |           |   | 47.2     |           |   |   | 47.2     |        
|Deferred income taxes                                   |                                        |   | 94.4          |           |            |   |               |          |           |   | 68.5     |           |   |   | 162.9    |        
|Commitments
and contingent liabilities                  |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |        
|Liabilities subject to compromise                       |                                        |   | 10,157.8      |           |            |   | (10,157.8      | )        |           |   |         |           |   |   |         |        
|Shareholders (deficiency) equity:                      |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |        
|                                                        | Common stock-old                       |   |               |          |            |   |                |         |           |   |          |          |   |   |          |        | 
|                                                        | Common stock-new                       |   |               |          |            |   |                | 0.5      |           |   |          |          |   |   |          | 0.5     | 
|                                                        | Additional paid-in capital             |   |               | 14,045.5  |            |   |                | 1,194.1  |           |   |          | (12,312.5 | ) |   |          | 2,927.1 | 
|                                                        | Accumulated other comprehensive (loss) |   |               | (653.6    | )          |   |                | 0.4      |           |   |          | 653.2     |   |   |          |        | 
|                                                        | (Deficit) retained earnings            |   |               | (18,568.0 | )          |   |                | 8,443.6  |           |   |          | 10,124.4  |   |   |          |        | 
|                                                        |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |        
|                                                        |                                        |   | (5,176.1      | )         |            |   | 9,638.6        |          |           |   | (1,534.9 | )         |   |   | 2,927.6  |        
|                                                        |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |        
|Total liabilities and shareholders
(deficiency) equity |                                        | $ | 13,041.4      |           |            | $ | (120.7         | )        |           | $ | (1,673.2 | )         |   | $ | 11,247.5 |        
|                                                        |                                        |   |               |           |            |   |                |          |           |   |          |           |   |   |          |         | 

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.  Significant Accounting Policies

Basis of Presentation and Use of Estimates

The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States,
including AICPA Statement of Position 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code, (SOP 90-7). The Company had
determined that there was insufficient collateral to cover the interest portion
of scheduled payments on certain of its prepetition debt obligations. The
Company had therefore discontinued accruing interest on these obligations. For
the year ended December 31, 2002, contractual interest was $1,425.4 million,
which was $645.2 million in excess of reported interest expense.

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

Principles of Consolidation

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

Reclassification

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

Foreign Currency Translation

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

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

Cash Equivalents

Cash equivalents are short-term highly liquid investments purchased with a
maturity of three months or less. Cash equivalents were $15.7 million and
$218.7 million at December 31, 2002 and 2001, respectively, which consisted
primarily of bank time deposits and corporate commercial paper. At December 31,
2002 and 2001, none and $188.7 million, respectively, of the cash equivalents
were denominated in foreign currencies.

Marketable Securities

Marketable securities at
December 31, 2002 consist of commercial paper. Marketable securities are classified as available-for-sale, which are carried
at fair value. Unrealized holding gains and losses on securities, net of tax,
would be 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.

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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.

3.  Significant Accounting Policies (continued)

During the years ended December 31, 2002, 2001 and 2000, there were no realized
gains or losses on sales of securities.

Fixed Assets

Fixed assets are stated at cost, which includes amounts capitalized for labor
and overhead expended in connection with the design and installation of
operating equipment. Internal costs directly related to the construction of
such facilities, including payroll and related costs of certain employees and
rent and other occupancy costs are capitalized. The internal costs capitalized
in the years ended December 31, 2002, 2001 and 2000 were approximately £115
million ($185.1 million), £251 million ($365.1 million) and £259 million
($387.4 million), respectively. The American Institute of Certified Public
Accountants issued an Exposure Draft of a Proposed Statement of Position on
Accounting for Certain Costs and Activities related to Property, Plant and
Equipment dated June 29, 2001. This Exposure Draft is not currently an
accounting principle generally accepted in the United States. However, if this
Exposure Draft is adopted, it would require among other things that rent and
other occupancy costs are charged to expense as incurred. In the year ended
December 31, 2002, we capitalized approximately £9 million of such costs.

Depreciation is computed by the straight-line method over the estimated useful
lives of the assets. Estimated useful lives are as follows: operating equipment
 3 to 40 years and other equipment  3 to 40 years.

Intangible Assets

Intangible assets include goodwill, license acquisition costs, and customer
lists. Goodwill is the excess of the purchase price over the fair value of net
assets acquired in business combinations accounted for as purchases which
includes the portion of the purchase price allocated to the value of the
workforce in place. License acquisition costs represent the portion of
purchase price allocated to the cable television and telecommunications
licenses acquired in business combinations. Prior to the adoption of SFAS No.
142, Goodwill and Other Intangible Assets, goodwill was amortized on a
straight-line basis over the periods benefited of 3, 10, 15 or 30 years and
license acquisition costs were amortized on a straight-line basis up to 23 years. Upon the adoption of SFAS No. 142, goodwill and license
acquisition costs are no longer amortized. Instead these assets are reviewed
annually (or more frequently under certain conditions) for impairment in
accordance with this statement. 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.

Impairment of Long-Lived Assets

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

Equity Method Investments

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

Deferred Financing Costs

Deferred financing costs of
$214.9 million and $249.0 million as of December 31,
2002 and 2001, respectively, are included in other assets. Deferred financing costs are incurred in connection with the issuance of debt
and are amortized over the term of the related debt.

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

Capitalized Interest

Interest is capitalized as a component of the cost of fixed assets constructed.
In 2002, 2001 and 2000, total interest incurred was $826.5 million, $1,308.5
million and $981.4 million, respectively, of which interest of $46.3 million,
$67.7 million and $95.1 million, respectively, was capitalized.

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

3.  Significant Accounting Policies (continued)

Revenue Recognition

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

Cable Television System Costs, Expenses and Revenues

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

Advertising Expense

The Company charges the cost of advertising to expense as incurred. Advertising
costs were $33.5 million, $77.9 million and $94.0 million in 2002, 2001 and
2000, respectively.

Stock-Based Compensation

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

Had compensation for stock options granted by the Companys former ultimate
parent company been determined consistent with the provisions of SFAS No. 123,
the effect on the Companys net loss would have been changed to the following
pro forma amounts (See Note 17):

|                                           |  |                                 |          |      |  |               |           |   |  |   |          |  
|------------------------------------------ |  | ------------------------------- | -------- | ---- |  | ------------- | --------- | - |  | - | -------- | -
|                                           |  | For the Year Ended December 31,
|                                           |  |                                
|                                           |  | 2002                            |          | 2001 |  | 2000         
|                                           |  |                                 |          |      |  |              
|                                           |  |                                 |          |      |  | (in millions) |           |   |  |  
|Non-cash compensation expense, as reported |  | $                               |         |      |  | $             | 30.6      |   |  | $ |         |  
|                                           |  |                                 |          |      |  |               |           |   |  |   |          |  
|Non-cash compensation expense, pro forma   |  | $                               | 255.9    |      |  | $             | 259.9     |   |  | $ | 248.6    |  
|                                           |  |                                 |          |      |  |               |           |   |  |   |          |  
|Net loss, as reported                      |  | $                               | (2,375.8 | )    |  | $             | (11,837.0 | ) |  | $ | (2,388.1 | )
|                                           |  |                                 |          |      |  |               |           |   |  |   |          |  
|Net loss, pro forma                        |  | $                               | (2,631.7 | )    |  | $             | (12,096.9 | ) |  | $ | (2,636.7 | )
|                                           |  |                                 |          |      |  |               |           |   |  |   |          |  

Derivative Financial Instruments

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

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

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

4.   Recent Accounting Pronouncements

On December 31, 2002, the Company adopted SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure. SFAS No. 148 amends
SFAS No. 123, Accounting for Stock Based Compensation, to provide alternative
methods of transition to SFAS No. 123s fair value method of accounting for
stock-based employee compensation. SFAS No. 148 also amends the disclosure
provisions of SFAS No. 123 and APB Opinion No. 28, Interim Financial
Reporting.

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

In April 2002, the FASB issued SFAS
No. 145, Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
which is effective for the Company on January 1, 2003. The adoption of SFAS
No. 145 will require any gain or loss recognized on the extinguishment of debt
to be classified as income or loss from continuing operations. Prior to SFAS
No. 145, gain or loss recognized on the extinguishment of debt was classified
as an extraordinary item.

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

4.   Recent Accounting Pronouncements (continued)

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

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which is effective for the Company on January 1, 2003. This
Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible fixed assets and the associated
asset retirement costs. The adoption of this new standard is not
expected to have a
significant effect on the results of operations, financial condition or cash
flows of the Company.

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination that is completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets. Instead, these
assets must be reviewed annually (or more frequently under certain conditions)
for impairment in accordance with this statement. This impairment test uses a
fair value approach rather than the undiscounted cash flow approach previously
required by SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of. The Company
adopted SFAS No. 141 and SFAS No. 142
on January 1, 2002. Primarily due to the significant impairment charge that
the Company recorded in 2001, the adoption of this new standard did
not result in an impairment upon adoption. Amortization of goodwill
and license acquisition costs ceased effective January 1, 2002.
See Note 8.

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession ) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

5.   Asset Impairments

Asset impairment charges were $445.1 million in the year ended December 31,
2002. These charges are non-cash charges to write-down certain assets to their
estimated fair values based on an assessment that their carrying value was not
recoverable. These charges include fixed assets of $56.0 million, license
acquisition costs of $29.0 million and goodwill of
$360.1 million. The charge with respect to fixed assets was
estimated based upon the technological obsolescence of certain network and other equipment. The charge with
respect to license acquisition costs and goodwill was determined in
accordance with SFAS No. 142. The
aggregate asset impairment charge of $445.1 million related to the Companys
business segments as follows: $434.5 million Consumer, $5.3 million Business
and $5.3 million Shared.

As of December 31, 2001, the Company performed an analysis of the carrying
values of its long-lived assets including goodwill. During 1999 and 2000,
acquisitions were made against a background of increasing consolidation and
record valuations in the telecommunications industry. This analysis was
initiated because of the decline in NTL Europe, Inc.s (formerly NTL
Incorporateds) stock price and significantly lower valuations for companies
within its industry. Additionally, at the time of the Companys analysis, the
book value of NTL Europe, Inc.s (formerly NTL Incorporateds) net assets
significantly exceeded its market capitalization. Accordingly, the Company
performed an analysis of the recoverability of its long-lived assets and
associated goodwill. The fair value of the Companys assets was determined by
discounting the Companys estimates of the expected future cash flows related
to these investments when the non-discounted cash flows indicated that the
long-lived assets would not be
recoverable. The Company recorded a write-down of $8,161.6 million in the
fourth quarter of 2001 as a result of this analysis and review, of which
$8,160.6 million is included in asset impairments and $1.0 million is included
in share of losses from equity investments. The asset impairment charge of
$8,160.6 million included goodwill of $8,077.8 million, license acquisition
costs of $58.8 million, customer lists of $9.1 million and other intangibles of
$14.9 million. The aggregate asset impairment charge of $8,161.6 million
related to the Companys business segments as follows: $6,048.1 million
Consumer, $2,113.0 million Business and $0.5 million Broadcast.

6.   Acquisitions

On May 30, 2000, NTL Europe acquired the consumer cable telephone, Internet and
television operations of ConsumerCo for an aggregate purchase price of
approximately $13.1 billion, including intangibles of approximately $8.9
billion. The Company subsequently acquired ConsumerCo from NTL Europe. The
acquisition was accounted for as a purchase, and accordingly, the net assets
and results of operations of ConsumerCo are included in the consolidated
financial statements beginning in May 2000.

The pro forma unaudited consolidated results of operations for the year ended
December 31, 2000 assuming consummation of the acquisition of ConsumerCo as of
January 1, 2000 is as follows (in millions).

|              |  |                   |          |  
|------------- |  | ----------------- | -------- | -
|              |  | Year Ended       
|              |  | December 31, 2000
|              |  |                  
|Total revenue |  | $                 | 2,953.4  |  
|Net (loss)    |  |                   | (2,973.5 | )

In November 2001, the Company sold a portion of the indirect access customers
acquired from Cable & Wireless Communications plc in May 2000. The sales price
was £10.2 million ($14.8 million) which does not include contingent payments
for the collection of certain future service revenues and existing receivables.
The Company recognized a loss on this sale of $88.5 million, after deducting
$102.0 million of unamortized intangibles. The value assigned to these assets
upon acquisition was $135.9 million.

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##### Table of Contents



NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

7.   Fixed Assets

Fixed assets consist of:

|                         |  |               |          |      |  |   |          |  
|------------------------ |  | ------------- | -------- | ---- |  | - | -------- | -
|                         |  | December 31, 
|                         |  |              
|                         |  | 2002          |          | 2001
|                         |  |               |          |     
|                         |  | (in millions)
|Operating equipment      |  | $             | 13,659.9 |      |  | $ | 11,620.8 |  
|Other equipment          |  |               | 1,295.6  |      |  |   | 922.4    |  
|Construction-in-progress |  |               | 1,027.8  |      |  |   | 1,267.5  |  
|                         |  |               |          |      |  |   |          |  
|                         |  |               | 15,983.3 |      |  |   | 13,810.7 |  
|Accumulated depreciation |  |               | (4,894.4 | )    |  |   | (2,970.4 | )
|                         |  |               |          |      |  |   |          |  
|                         |  | $             | 11,088.9 |      |  | $ | 10,840.3 |  
|                         |  |               |          |      |  |   |          |  

8.   Intangible Assets

Intangible assets consist of:

|                                               |                                                                                   |   |               |      |      |   |       |      | 
|---------------------------------------------- | --------------------------------------------------------------------------------- | - | ------------- | ---- | ---- | - | ----- | ---- | 
|                                               |                                                                                   |   | December 31, 
|                                               |                                                                                   |   |              
|                                               |                                                                                   |   | 2002          |      | 2001
|                                               |                                                                                   |   |               |      |     
|                                               |                                                                                   |   | (in millions)
|Intangible assets not subject to amortization: |                                                                                   |   |               |      |      |   |       |     
|                                               | License acquisition costs                                                         |   | $             | 23.6 |      |   | $     | 54.7 | 
|Intangible assets subject to amortization:     |                                                                                   |   |               |      |      |   |       |     
|                                               | Customer lists, net of accumulated amortization of
$121.0 (2002) and $78.1 (2001) |   |               | 41.1 |      |   |       | 64.8 | 
|                                               |                                                                                   |   |               |      |      |   |       |     
|                                               |                                                                                   | $ | 64.7          |      |      | $ | 119.5 |     
|                                               |                                                                                   |   |               |      |      |   |       |     

The change in the carrying amount of goodwill during the year ended December
31, 2002 is as follows:

|                                                  |  |   |        |  
|------------------------------------------------- |  | - | ------ | -
|Goodwill  December 31, 2001                      |  | $ | 647.8  |  
|Impairment charge                                 |  |   | (360.1 | )
|Foreign currency exchange translation adjustments |  |   | 42.9   |  
|                                                  |  |   |        |  
|Goodwill  December 31, 2002                      |  | $ | 330.6  |  
|                                                  |  |   |        |  

Upon the adoption of SFAS No. 142, the Company performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separate from goodwill. The
Company reclassified the carrying value of workforce in place included in other
intangibles to goodwill. The Company determined that license acquisition costs would no longer be
subject to amortization since they are deemed to have an indefinite useful
life. The Company also determined that no changes in the remaining useful
lives of the customer lists were required.

The Company also performed an
evaluation for impairment of its goodwill and license acquisition
costs as of January 1, 2002 and determined that no impairment
charge was required.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2002, as adjusted for the Companys emergence from
Chapter 11 reorganization and the adoption of fresh-start reporting, is as
follows: $200.2 million in 2003, $200.2 million in 2004, $200.2 million in
2005, $198.7 million in 2006 and $197.7 million in 2007.

F-139



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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

The following table shows the Companys net loss as adjusted for the adoption
of SFAS No. 142, had SFAS No. 142 been in effect on January 1 of each period
(unaudited) (in millions):

|                         |                           |   |          |   |      |   |              |         |  |   |          |       | 
|------------------------ | ------------------------- | - | -------- | - | ---- | - | ------------ | ------- |  | - | -------- | ----- | 
|                         |                           |   |          |   |      |   | Year Ended   |         |  |   |         
|                         |                           |   |          |   |      |   | December 31, |         |  |   |         
|                         |                           |   |         
|                         |                           |   | 2002     |   | 2001 |   | 2000        
|                         |                           |   |          |   |      |   |             
|Net
(loss) - as reported |                           | $ | (2,375.8 | ) |      | $ | (11,837.0    | )       |  | $ | (2,388.1 | )    
|Amortization of:         |                           |   |          |   |      |   |              |         |  |   |          |      
|                         | Goodwill                  |   |          |  |      |   |              | 1,067.3 |  |   |          | 668.5 | 
|                         | License acquisition costs |   |          |  |      |   |              | 36.9    |  |   |          | 81.1  | 
|                         | Other                     |   |          |  |      |   |              | 0.7     |  |   |          | 0.7   | 
|                         |                           |   |          |   |      |   |              |         |  |   |          |      
|                         |                           |   |         |   |      |   | 1,104.9      |         |  |   | 750.3    |      
|                         |                           |   |          |   |      |   |              |         |  |   |          |      
|Net (loss)  as adjusted |                           | $ | (2,375.8 | ) |      | $ | (10,732.1    | )       |  | $ | (1,637.8 | )    
|                         |                           |   |          |   |      |   |              |         |  |   |          |      

9.   Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

|                        |                                                         |   |                   |         | 
|----------------------- | ------------------------------------------------------- | - | ----------------- | ------- | 
|                        |                                                         |   | December 31, 2002
|                        |                                                         |   |                  
|                        |                                                         |   | (in millions)    
|Accounts payable        |                                                         | $ | 0.6               |        
|Interest payable        |                                                         |   | 316.8             |        
|Due to NTL Europe, Inc. |                                                         |   | 25.2              |        
|Accrued expenses        |                                                         |   | 1.0               |        
|Long-term debt:         |                                                         |   |                   |        
|NTL Communications:     |                                                         |   |                   |        
|                        | 12 3/4% Senior Deferred Coupon Notes                    |   |                   | 277.8   | 
|                        | 11 1/2% Senior Deferred Coupon Notes                    |   |                   | 1,050.0 | 
|                        | 10% Senior Notes                                        |   |                   | 400.0   | 
|                        | 9 1/2% Senior Sterling Notes, less unamortized discount |   |                   | 200.8   | 
|                        | 10 3/4% Senior Deferred Coupon Sterling Notes           |   |                   | 439.2   | 
|                        | 9 3/4% Senior Deferred Coupon Notes                     |   |                   | 1,193.3 | 
|                        | 9 3/4% Senior Deferred Coupon Sterling Notes            |   |                   | 441.6   | 
|                        | 11 1/2% Senior Notes                                    |   |                   | 625.0   | 
|                        | 12 3/8% Senior Deferred Coupon Notes                    |   |                   | 380.6   | 
|                        | 7% Convertible Subordinated Notes                       |   |                   | 489.8   | 
|                        | 9 1/4% Senior Euro Notes                                |   |                   | 262.1   | 
|                        | 9 7/8% Senior Euro Notes                                |   |                   | 367.0   | 
|                        | 11 1/2% Senior Deferred Coupon Euro Notes               |   |                   | 166.1   | 
|                        | 11 7/8% Senior Notes, less unamortized discount         |   |                   | 491.7   | 
|                        | 12 3/8% Senior Euro Notes, plus unamortized premium     |   |                   | 315.3   | 
|                        | 6 3/4% Convertible Senior Notes                         |   |                   | 1,150.0 | 
|Diamond Cable:          |                                                         |   |                   |        
|                        | 13 1/4% Senior Discount Notes                           |   |                   | 285.1   | 
|                        | 11 3/4% Senior Discount Notes                           |   |                   | 531.0   | 
|                        | 10 3/4% Senior Discount Notes                           |   |                   | 420.5   | 
|Diamond Holdings:       |                                                         |   |                   |        
|                        | 10% Senior Sterling Notes                               |   |                   | 217.3   | 
|                        | 9 1/8% Senior Notes                                     |   |                   | 110.0   | 
|                        |                                                         |   |                   |        
|Total                   |                                                         | $ | 10,157.8          |        
|                        |                                                         |   |                   |        

Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
all of the outstanding public notes of NTL Communications Corp. were canceled,
and all of the outstanding public notes of Diamond Cable Communications Limited
were acquired by NTL Communications Corp. The Diamond Holdings Notes remain
outstanding.

F-140



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##### Table of Contents



NTL Incorporated (formerly NTL
Communications Corp. )(Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.   Long-Term Debt

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

|                                                      |                                                         |  |  |     |  |   |               |         |      |   |          |         | 
|----------------------------------------------------- | ------------------------------------------------------- |  |  | --- |  | - | ------------- | ------- | ---- | - | -------- | ------- | 
|                                                      |                                                         |  |  |     |  |   | December 31, 
|                                                      |                                                         |  |  |     |  |   |              
|                                                      |                                                         |  |  |     |  |   | 2002          |         | 2001
|                                                      |                                                         |  |  |     |  |   |               |         |     
|                                                      |                                                         |  |  |     |  |   | (in millions)
|NTL Incorporated (formerly NTL Communications Corp.): |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      | 12 3/4% Senior Deferred Coupon Notes                    |  |  | (a) |  |   | $             |        |      |   | $        | 277.8   | 
|                                                      | 11 1/2% Senior Deferred Coupon Notes                    |  |  | (b) |  |   |               |        |      |   |          | 1,050.0 | 
|                                                      | 10% Senior Notes                                        |  |  | (c) |  |   |               |        |      |   |          | 400.0   | 
|                                                      | 9 1/2% Senior Sterling Notes, less unamortized discount |  |  | (d) |  |   |               |        |      |   |          | 181.4   | 
|                                                      | 10 3/4% Senior Deferred Coupon Sterling Notes           |  |  | (e) |  |   |               |        |      |   |          | 382.3   | 
|                                                      | 9 3/4% Senior Deferred Coupon Notes                     |  |  | (f) |  |   |               |        |      |   |          | 1,153.8 | 
|                                                      | 9 3/4% Senior Deferred Coupon Sterling Notes            |  |  | (g) |  |   |               |        |      |   |          | 385.9   | 
|                                                      | 11 1/2% Senior Notes                                    |  |  | (h) |  |   |               |        |      |   |          | 625.0   | 
|                                                      | 12 3/8% Senior Deferred Coupon Notes                    |  |  | (i) |  |   |               |        |      |   |          | 364.9   | 
|                                                      | 7% Convertible Subordinated Notes                       |  |  | (j) |  |   |               |        |      |   |          | 489.8   | 
|                                                      | 9 1/4% Senior Euro Notes                                |  |  | (k) |  |   |               |        |      |   |          | 222.5   | 
|                                                      | 9 7/8% Senior Euro Notes                                |  |  | (l) |  |   |               |        |      |   |          | 311.5   | 
|                                                      | 11 1/2% Senior Deferred Coupon Euro Notes               |  |  | (m) |  |   |               |        |      |   |          | 135.6   | 
|                                                      | 11 7/8% Senior Notes, less unamortized discount         |  |  | (n) |  |   |               |        |      |   |          | 490.7   | 
|                                                      | 12 3/8% Senior Euro Notes, less unamortized premium     |  |  | (o) |  |   |               |        |      |   |          | 267.8   | 
|                                                      | 6 3/4% Convertible Senior Notes                         |  |  | (p) |  |   |               |        |      |   |          | 1,150.0 | 
|Communications Cable Funding Corp.:                   |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      | DIP Facility                                            |  |  |     |  |   |               | 229.0   |      |   |          |        | 
|NTL Communications Limited and subsidiaries:          |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      | Senior Credit Facility                                  |  |  | (w) |  |   |               | 4,482.1 |      |   |          | 4,050.0 | 
|                                                      | Working Capital Credit Facility                         |  |  | (w) |  |   |               | 657.1   |      |   |          | 145.4   | 
|                                                      | Other                                                   |  |  |     |  |   |               | 63.2    |      |   |          | 58.6    | 
|NTL Triangle:                                         |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      | 11.2% Senior Discount Debentures                        |  |  | (q) |  |   |               | 517.3   |      |   |          | 517.3   | 
|                                                      | Other                                                   |  |  |     |  |   |               | 3.6     |      |   |          | 4.5     | 
|Diamond Cable:                                        |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      | 13 1/4% Senior Discount Notes                           |  |  | (r) |  |   |               |        |      |   |          | 285.1   | 
|                                                      | 11 3/4% Senior Discount Notes                           |  |  | (s) |  |   |               |        |      |   |          | 531.0   | 
|                                                      | 10 3/4% Senior Discount Notes                           |  |  | (t) |  |   |               |        |      |   |          | 415.1   | 
|Diamond Holdings:                                     |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      | 10% Senior Sterling Notes                               |  |  | (u) |  |   |               |        |      |   |          | 196.3   | 
|                                                      | 9 1/8% Senior Notes                                     |  |  | (v) |  |   |               |        |      |   |          | 110.0   | 
|                                                      | Other                                                   |  |  |     |  |   |               | 3.1     |      |   |          | 3.6     | 
|                                                      |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      |                                                         |  |  |     |  |   | 5,955.4       |         |      |   | 14,205.9 |        
|Less current portion                                  |                                                         |  |  |     |  |   | 5,955.4       |         |      |   | 14,205.9 |        
|                                                      |                                                         |  |  |     |  |   |               |         |      |   |          |        
|                                                      |                                                         |  |  |     |  | $ |              |         |      | $ |         |        
|                                                      |                                                         |  |  |     |  |   |               |         |      |   |          |        

F-141



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##### Table of Contents



NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.   Long-Term Debt (continued)

DIP Facility

In connection with the Plan, some members of the official unsecured creditors
committee of bondholders committed to provide up to $500.0 million of new debt
financing to enable the business operations of our former parent company and
some of its subsidiaries to have access to sufficient liquidity to continue
ordinary operations during the Chapter 11 process. The Bankruptcy Court
approved a DIP facility in the principal amount of $630.0 million (including a
$130.0 million commitment from NTL (Delaware), Inc. and the $500.0 million from
certain members of the creditors committee) in an order entered on July 3,
2002. On July 15, 2002, the various lenders under the DIP facility and NTL
(Delaware), Inc. entered into the DIP facility agreement with Communications
Cable Funding Corp., a wholly-owned subsidiary of the Company to provide $630.0
million in financing to Communications Cable Funding Corp.

On July 17, 2002, the Company drew the first tranche available under the
facility in the amount of $229.0 million.

In connection with the closing of the DIP facility, NTL Europe, Inc. and its
debtor subsidiaries paid a closing fee to the DIP lenders equal to 2% of the
$630.0 million commitment ($12.6 million) in July 2002.

Each term loan under the DIP facility incurred interest on the unpaid principal
amount for three months from July 15, 2002 at the rate of 11% per annum. With
respect to each successive three month period following that date, the rate per
annum increased incrementally by 1% over the immediately preceding three month
period but will not exceed 18% per annum for any three month period. Interest
was payable in cash at least monthly. The DIP facility also included an
unutilized commitment fee of 1/2% per annum on the aggregate principal amount
of unutilized commitments which is payable in cash each month.

The $229.0 million balance outstanding under the DIP facility was repaid on
January 10, 2003.

Outstanding Public Notes

Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
all of the outstanding public notes of NTL Communications Corp. were canceled,
and all of the outstanding public notes of Diamond Cable Communications Limited
were acquired by NTL Communications Corp. The NTL Triangle and Diamond
Holdings Notes remain outstanding.



|(a) |  | 12 3/4% Notes due April 15, 2005, principal amount at maturity of $277.8
million, interest payable semiannually from October 15, 2000, redeemable
at the Companys option on or after April 15, 2000;                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | 11 1/2% Notes due February 1, 2006, principal amount at maturity of
$1,050.0 million, interest payable semiannually from August 1, 2001,
redeemable at the Companys option on or after February 1, 2001;                           
|   
|(c) |  | 10% Notes due February 15, 2007, principal amount at maturity of $400.0
million, interest payable semiannually from August 15, 1997, redeemable at
the Companys option on or after February 15, 2002;                              
|   
|(d) |  | 9 1/2% Sterling Notes due April 1, 2008, principal amount at maturity of
£125.0 million ($201.2 million), interest payable semiannually from
October 1, 1998, redeemable at the Companys option on or after April 1,
2003;         
|   
|(e) |  | 10 3/4% Sterling Notes due April 1, 2008, principal amount at maturity of
£300.0 million ($482.9 million), interest payable semiannually beginning
on October 1, 2003, redeemable at the Companys option on or after April
1, 2003;
|   
|(f) |  | 9 3/4% Notes due April 1, 2008, principal amount at maturity of $1,300.0
million, interest payable semiannually beginning on October 1, 2003,
redeemable at the Companys option on or after April 1, 2003;                         

F-142



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##### Table of Contents



NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.   Long-Term Debt (continued)



|(g) |  | 9 3/4% Sterling Notes due April 15, 2009, principal amount at maturity of
£330.0 million ($531.1 million), interest payable semiannually beginning
on October 15, 2004, redeemable at the Companys option on or after April
15, 2004;                                                                                                                                                                                                                        
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(h) |  | 11 1/2% Notes due October 1, 2008, principal amount at maturity of $625.0
million, interest payable semiannually from April 1, 1999, redeemable at
the Companys option on or after October 1, 2003;                                                                                                                                                                                                                                                          
|   
|(i) |  | 12 3/8% Notes due October 1, 2008, principal amount at maturity of $450.0
million, interest payable semiannually beginning on April 1, 2004,
redeemable at the Companys option on or after October 1, 2003;                                                                                                                                                                                                                                                  
|   
|(j) |  | 7% Convertible Notes due December 15, 2008, principal amount at maturity
of $489.8 million, interest payable semiannually from June 15, 1999,
redeemable at the Companys option on or after December 15, 2001,
convertible into shares of NTL Incorporated common stock at a conversion
price of $39.20 per share (there are approximately 12.5 million shares of
NTL Incorporated common stock reserved for issuance upon conversion);                      
|   
|(k) |  | 9 1/4% Euro Notes due November 15, 2006, principal amount at maturity of
250.0 million, ($262.1 million), interest payable semiannually from May
15, 2000;                                                                                                                                                                                                                                                                                                   
|   
|(l) |  | 9 7/8% Euro Notes due November 15, 2009, principal amount at maturity of
350.0 million, ($367.0 million), interest payable semiannually from May
15, 2000, redeemable at the Companys option on or after November 15,
2004;                                                                                                                                                                                                                                 
|   
|(m) |  | 11 1/2% Deferred Euro Notes due November 15, 2009, principal amount at
maturity of 210.0 million ($220.1 million), interest payable semiannually
beginning on May 15, 2005, redeemable at the Companys option on or after
November 15, 2004;                                                                                                                                                                                                                
|   
|(n) |  | 11 7/8% Notes due October 1, 2010, principal amount at maturity of $500.0
million, interest payable semiannually from April 1, 2001, redeemable at
the Companys option on or after October 1, 2005;                                                                                                                                                                                                                                                          
|   
|(o) |  | 12 3/8% Senior Euro Notes due February 1, 2008, issued in January and
February 2001, principal amount at maturity of 300.0 million ($314.6
million), interest payable semiannually from August 1, 2001;                                                                                                                                                                                                                                                      
|   
|(p) |  | 6 3/4% Convertible Notes due May 15, 2008, issued in May 2001, principal
amount at maturity of $1,150.0 million, interest payable semiannually from
November 15, 2001, redeemable at the Companys option on or after May 20,
2004, convertible into shares of NTL Incorporated common stock at a
conversion price of $32.728 per share (there were approximately 35.1
million shares of NTL Incorporated common stock reserved for issuance upon
conversion);
|   
|(q) |  | 11.2% Debentures due November 15, 2007, principal amount at maturity of
$517.3 million, interest payable semiannually from May 15, 2001,
redeemable at NTL Triangles option after November 15, 2000;                                                                                                                                                                                                                                                         
|   
|(r) |  | 13 1/4% Notes due September 30, 2004, principal amount at maturity of
$285.1 million, interest payable semiannually from March 31, 2000,
redeemable at Diamonds option on or after September 30, 1999;                                                                                                                                                                                                                                                       
|   
|(s) |  | 11 3/4% Notes due December 15, 2005, principal amount at maturity of
$531.0 million, interest payable semiannually from June 15, 2001,
redeemable at Diamonds option on or after December 15, 2000;                                                                                                                                                                                                                                                          
|   
|(t) |  | 10 3/4% Notes due February 15, 2007, principal amount at maturity of
$420.5 million, interest payable semiannually beginning on August 15,
2002, redeemable at Diamonds option on or after December 15, 2002;                                                                                                                                                                                                                                                

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##### Table of Contents



NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.   Long-Term Debt (continued)



|(u) |  | 10% Sterling Notes due February 1, 2008, issued by Diamond Holdings plc,
principal amount at maturity of £135.0 million ($217.3 million), interest
payable semiannually from August 1, 1998, redeemable at Diamond Holdings
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 Holdings option on or after
February 1, 2003.                                       

During 2002, 2001 and 2000, the Company recognized $96.7 million, $284.7
million and $473.1 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) |  | Senior Credit Facility originally dated May 30, 2000 (and subsequently
amended and restated) of £2,784.8 million ($4,482.1 million), all of which
was outstanding as of December 31, 2002; comprising a revolving facility
of £2,584.8 million ($4,160.2 million) and a term facility of £200.0
million ($321.9 million); interest payable at least every six months at
LIBOR plus mandatory costs plus a margin rate which, in the case of the
revolving facility, is fixed at 3.50% per annum for six months from
January 10, 2003 and which then varies, depending upon satisfaction of a
financial covenant over six monthly periods, between 4.00% and 2.50% per
annum and which, in the case of the term facility, is fixed at 5.50% per
annum; effective interest rate on the revolving facility of 6.26% and
6.73% per annum at December 31, 2002 and 2001, respectively; effective
interest rate on the term facility of 7.76% and 8.06% per annum at
December 31, 2002 and 2001, respectively; the unused portion of the
commitment to make the revolving facility available 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 then outstanding under
the revolving facility is due in full on September 30, 2005; principal
under the term facility is due in six quarterly installments beginning on
June 30, 2006 and increasing from £5.0 million repayments due on the first
two repayment dates to £10.0 million repayments due on the next three
repayment dates with the balance being due on September 30, 2007; and
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Working Capital Credit Facility originally dated May 30, 2000 (and
subsequently amended and restated) of approximately £408.3 million ($657.1
million), all of which was outstanding as of December 31, 2002; originally
for £1,300.0 million ($2,092.4 million); following the issuance of new
debt beginning in October 2000, the commitment has been reduced to the
aforementioned amount; interest payable at least every six months at LIBOR
plus mandatory costs plus a margin rate which commenced at 4.50% per annum
and increases by 0.50% per annum at the end of each quarter after the date
upon which the facility was first utilized (subject to a cap on total
interest of 16% per annum and a cap on total interest payable in cash of
14% per annum (any excess being added to principal)); effective interest
rate of 11.76% and 9.57% per annum at December 31, 2002 and 2001,
respectively; principal is due in full on March 31, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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

The bank credit facilities, as well as the NTL Triangle and Diamond Holdings
notes, restrict the payment of cash dividends and loans to the Company. At
December 31, 2002, restricted net assets were $3,670.6 million.

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

10.   Long-Term Debt (continued)

In connection with the Companys emergence from Chapter 11 reorganization, the
Company and certain of its subsidiaries issued $558.249 million aggregate
principal face amount of 19% Senior Secured Notes due 2010 (the Exit Notes)
on January 10, 2003. Initial purchasers of the Companys Exit Notes also
purchased 500,000 shares of the Companys common stock on that date. The gross
proceeds from the sale of the Exit Notes and such shares totaled $500.0
million. The proceeds were used in part to repay amounts outstanding under the
DIP facility and to purchase from NTL Delaware a £90.0 million note of NTL (UK)
Group Inc. and to repay certain other obligations. The Exit Notes are due on
January 1, 2010. The Exit Notes are redeemable at the Companys option after
January 10, 2003. Interest on the Exit Notes is payable in cash semiannually
from July 1, 2003, with respect to the interest payment due on July 1, 2003,
the Company may elect to pay any portion of the interest in cash or by issuance
of additional pay-in-kind notes. With respect to the interest payments due on
January 1, 2004 and July 1, 2004, the Company may make a similar election based
on its Available Cash, as defined.

The purchasers of the Companys
Exit Notes are entitled to registration rights with respect to such
notes pursuant to the Exchange and Registration Rights Agreement.
Under the Exchange and Registration Rights Agreement, the Company
agreed, among other things, to file with the Securities and Exchange
Commission a registration statement with respect to an offer to
exchange the Exit Notes for new notes registered under the Securities
Act with terms substantially identical to those of the unregistered
notes. If the Company fails to file such registration statement with the
Securities and Exchange Commission on or before April 15, 2003 or if
certain other registration default events described in the Exchange
and Registration Rights Agreement occur, then the Company will be
required to pay special interest to each holder of the Exit Notes,
pursuant to provisions of the Exchange and Registration Rights
Agreement, during the period of one or more of such registration
default events. The Company would pay such special interest at a rate
of 0.5% per annum, which increases to 1.0% per annum after the first
120-day period following the occurrence of the first such
registration default. In addition, the Companys failure to
register the notes in compliance with the Exchange and Registration
Rights Agreement would result in an event of default under the
Indenture governing the Exit Notes.

Long-term debt repayments, excluding capital leases, are due as follows (in
millions). The table reflects the Companys contractual obligations as of
December 31, 2002 as adjusted for the emergence from Chapter 11 reorganization.

|                         |  |   |         |  |  |  | 
|------------------------ |  | - | ------- |  |  |  | 
|Year ending December 31: |  |   |         | 
|2003                     |  | $ | 0.4     | 
|2004                     |  |   | 0.4     | 
|2005                     |  |   | 4,160.6 | 
|2006                     |  |   | 689.7   | 
|2007                     |  |   | 807.4   | 
|Thereafter               |  |   | 886.6   | 
|                         |  |   |         | 
|Total debt repayments    |  |   | 6,545.1 | 
|Less: current portion    |  |   | 0.4     | 
|                         |  |   |         | 
|                         |  | $ | 6,544.7 | 
|                         |  |   |         | 

11.   Derivative Financial Instruments

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

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

In 2001, the Company entered into cross currency swaps to hedge exposure to
movements in the Euro/British pound exchange rate. In the year ended December
31, 2001, the Company recorded other comprehensive loss of $1.4 million as a
result of changes in the fair values. The aggregate fair value at December 31,
2001 was a net liability of $3.6 million. In May 2002, the Company closed out
its cross currency swaps for a cash payment of $2.0 million, and recognized a
loss of $2.0 million.

In September 2001, the Company entered into a British pound forward foreign
exchange agreement, consisting of twenty-six accumulating forward contracts, to
reduce its exposure to movement in the British pound/U.S. dollar exchange rate
in accordance with its market risk strategies. As of December 31, 2001, the
fair value of this instrument was a liability of $0.3 million.
In March 2002,
this agreement was closed out and the Company received cash of £0.5 million.

12.   Non-Cash Compensation

In July 2001, the Compensation and Option Committee of the Board of Directors
of the Companys former ultimate parent company approved modifications to
certain stock options. The latest possible expiration date of options to
purchase an aggregate

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NTL Incorporated (formerly NTL
Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

of approximately 4.7 million shares of NTL Europe, Inc.s common stock with
exercise prices from $0.17 to $14.76 per share was extended from July 30, 2001
to October 2004, as applicable, to January 30, 2006. The Company recognized
non-cash compensation expense of $30.6 million based on the excess of the
quoted market price of NTL Europe, Inc.s common stock on the date of the
modification of $12.05 per share over the exercise price per share. All
options to purchase shares of our former ultimate parent companys common stock
were cancelled on the Effective Date pursuant to the Plan.

13.   Other Charges Including Restructuring Charges

Other charges of $389.2 million in 2002 include restructuring charges of $104.8
million and non-cash charges of $284.4 million primarily for allowances for the
cancellation of receivables from our former ultimate parent company and certain
of its subsidiaries in accordance with the Plan. Other charges of $297.9
million in 2001 include restructuring charges of $202.8 million and costs of
$95.1 million incurred primarily to integrate the acquired companies, mostly
related to information technology integration, as well as costs incurred for
business rationalization consulting. Other charges of $92.7 million in 2000
include restructuring charges of $65.9 million and costs of $26.8 million
incurred primarily to integrate the acquired companies, mostly related to
information technology integration, as well as costs incurred for business
rationalization consulting.

Restructuring charges of $104.8 million, $202.8 million and $65.9 million for
the years ended December 31, 2002, 2001 and 2000, respectively, relate to the
Companys actions to reorganize, re-size and reduce operating costs and create
greater efficiency in various areas. An aggregate of $7.5 million of the 2002
restructuring charges and $57.9 million of the 2001 restructuring charges were
for the write-off of equipment and other assets that are not in use and will
not require any future cash outlays. The employee severance and related costs
in 2000 were for approximately 2,300 employees to be terminated, none of whom
are still employed by the Company as of December 31, 2002. These costs in 2001
were for approximately 5,200 employees to be terminated, of which approximately
20 employees were still employed by the Company as of December 31, 2002. These
costs in 2002 were for approximately 740 employees to be terminated, of which
approximately 350 employees were still employed by the Company as of December
31, 2002.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

13.   Other Charges Including Restructuring Charges (continued)

The following table summarizes the restructuring charges incurred and utilized
in 2000, 2001 and 2002:

|                           |  |                   |       |       |  |               |       |        |  |       |       |       |  |   |       |   |  |   |      |   |  |   |        |  
|-------------------------- |  | ----------------- | ----- | ----- |  | ------------- | ----- | ------ |  | ----- | ----- | ----- |  | - | ----- | - |  | - | ---- | - |  | - | ------ | -
|                           |  | Employee          |       | Lease |  |               |       |        |  |       |       |       |  |   |       |   |  |   |      |  
|                           |  | Severance         |       | Exit  |  | Agreement     |       | Fixed  |  |       |       |       |  |   |       |  
|                           |  | and Related Costs |       | Costs |  | Modifications |       | Assets |  | Other |       | Total
|                           |  |                   |       |       |  |               |       |        |  |       |       |      
|Charged to expense         |  | $                 | 47.9  |       |  | $             | 18.0  |        |  | $     |      |       |  | $ |      |   |  | $ |     |   |  | $ | 65.9   |  
|Utilized                   |  |                   |      |       |  |               |      |        |  |       |      |       |  |   |      |   |  |   |     |   |  |   |       |  
|                           |  |                   |       |       |  |               |       |        |  |       |       |       |  |   |       |   |  |   |      |   |  |   |        |  
|Balance, December 31, 2000 |  |                   | 47.9  |       |  |               | 18.0  |        |  |       |      |       |  |   |      |   |  |   |     |   |  |   | 65.9   |  
|2000 provision utilized    |  |                   | (41.3 | )     |  |               | (9.6  | )      |  |       |      |       |  |   |      |   |  |   |     |   |  |   | (50.9  | )
|2000 provision released    |  |                   | (6.6  | )     |  |               | (7.3  | )      |  |       |      |       |  |   |      |   |  |   |     |   |  |   | (13.9  | )
|Charged to expense         |  |                   | 98.7  |       |  |               | 32.4  |        |  |       | 27.7  |       |  |   | 57.9  |   |  |   |     |   |  |   | 216.7  |  
|2001 provision utilized    |  |                   | (26.2 | )     |  |               |      |        |  |       |      |       |  |   | (57.9 | ) |  |   |     |   |  |   | (84.1  | )
|                           |  |                   |       |       |  |               |       |        |  |       |       |       |  |   |       |   |  |   |      |   |  |   |        |  
|Balance, December 31, 2001 |  |                   | 72.5  |       |  |               | 33.5  |        |  |       | 27.7  |       |  |   |      |   |  |   |     |   |  |   | 133.7  |  
|2000 provision utilized    |  |                   |      |       |  |               | (1.1  | )      |  |       |      |       |  |   |      |   |  |   |     |   |  |   | (1.1   | )
|2001 provision utilized    |  |                   | (71.9 | )     |  |               | (17.3 | )      |  |       | (16.2 | )     |  |   |      |   |  |   |     |   |  |   | (105.4 | )
|2001 provision released    |  |                   | (0.6  | )     |  |               | (15.1 | )      |  |       | (11.5 | )     |  |   |      |   |  |   |     |   |  |   | (27.2  | )
|Charged to expense         |  |                   | 35.2  |       |  |               | 78.9  |        |  |       | 1.2   |       |  |   | 7.5   |   |  |   | 9.2  |   |  |   | 132.0  |  
|2002 provision utilized    |  |                   | (15.6 | )     |  |               | (0.2  | )      |  |       |      |       |  |   | (7.5  | ) |  |   | (7.7 | ) |  |   | (31.0  | )
|                           |  |                   |       |       |  |               |       |        |  |       |       |       |  |   |       |   |  |   |      |   |  |   |        |  
|Balance, December 31, 2002 |  | $                 | 19.6  |       |  | $             | 78.7  |        |  | $     | 1.2   |       |  | $ |      |   |  | $ | 1.5  |   |  | $ | 101.0  |  
|                           |  |                   |       |       |  |               |       |        |  |       |       |       |  |   |       |   |  |   |      |   |  |   |        |  

14.   Income Taxes

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

|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  
|-------------- | --------------- | - | ----------------------- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | -
|               |                 |   | Year Ended December 31,
|               |                 |   |                        
|               |                 |   | 2002                    |       | 2001 |   | 2000 
|               |                 |   |                         |       |      |   |      
|               |                 |   | (in millions)          
|Current:       |                 |   |                         |       |      |   |       |       |  |   |       |      
|               | Federal         |   | $                       |      |      |   | $     |      |  |   | $     |      |  
|               | State and local |   |                         | (1.2  | )    |   |       | 1.2   |  |   |       |      |  
|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  
|               | Foreign         |   |                         |      |      |   |       | 0.5   |  |   |       | 0.9   |  
|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  
|Total current  |                 |   | (1.2                    | )     |      |   | 1.7   |       |  |   | 0.9   |      
|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  
|Deferred:      |                 |   |                         |       |      |   |       |       |  |   |       |      
|               | Foreign         |   |                         | (24.5 | )    |   |       | 116.4 |  |   |       | (80.8 | )
|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  
|Total deferred |                 |   | (24.5                   | )     |      |   | 116.4 |       |  |   | (80.8 | )    
|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  
|               |                 | $ | (25.7                   | )     |      | $ | 118.1 |       |  | $ | (79.9 | )    
|               |                 |   |                         |       |      |   |       |       |  |   |       |       |  

The Companys tax benefit relates
primarily to operating loss carryforwards for which a benefit was recognized to
the extent of deferred tax liabilities.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

14.   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:

|                                            |                                 |   |               |         |      |   |          |         | 
|------------------------------------------- | ------------------------------- | - | ------------- | ------- | ---- | - | -------- | ------- | 
|                                            |                                 |   | December 31, 
|                                            |                                 |   |              
|                                            |                                 |   | 2002          |         | 2001
|                                            |                                 |   |               |         |     
|                                            |                                 |   | (in millions)
|Deferred tax liabilities:                   |                                 |   |               |         |      |   |          |        
|                                            | Intangibles                     |   | $             | 20.9    |      |   | $        | 34.5    | 
|                                            | Depreciation and amortization   |   |               | 209.0   |      |   |          | 354.2   | 
|                                            |                                 |   |               |         |      |   |          |         | 
|Total deferred tax liabilities              |                                 |   | 229.9         |         |      |   | 388.7    |        
|Deferred tax assets:                        |                                 |   |               |         |      |   |          |        
|                                            | Net operating losses            |   |               | 2,108.2 |      |   |          | 1,932.9 | 
|                                            | Capital losses                  |   |               | 2,716.7 |      |   |          |        | 
|                                            | Net deferred interest expense   |   |               | 245.8   |      |   |          | 239.9   | 
|                                            | Depreciation and amortization   |   |               | 705.8   |      |   |          | 401.5   | 
|                                            | Inventory                       |   |               | 3.0     |      |   |          | 15.9    | 
|                                            | Purchase accounting liabilities |   |               | 44.1    |      |   |          | 16.5    | 
|                                            | Allowance for doubtful accounts |   |               | 54.2    |      |   |          |        | 
|                                            | Other                           |   |               | 102.4   |      |   |          | 51.9    | 
|                                            |                                 |   |               |         |      |   |          |         | 
|Total deferred tax assets                   |                                 |   | 5,980.2       |         |      |   | 2,658.6  |        
|Valuation allowance for deferred tax assets |                                 |   | (5,844.7      | )       |      |   | (2,383.7 | )      
|                                            |                                 |   |               |         |      |   |          |         | 
|Net deferred tax assets                     |                                 |   | 135.5         |         |      |   | 274.9    |        
|                                            |                                 |   |               |         |      |   |          |         | 
|Net deferred tax liabilities                |                                 | $ | 94.4          |         |      | $ | 113.8    |        
|                                            |                                 |   |               |         |      |   |          |         | 

At December 31, 2002 and 2001, the Company had a valuation allowance against
its deferred tax assets to the extent it was not more likely than not that such
assets would be realized in the future.

At December 31, 2002, the Company had net operating loss carryforwards of
approximately $1.2 billion 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. In addition, the Company has capital loss carryforwards of
approximately $7.7 billion for U.S. federal income tax purposes that expire in
2007. The Company also has United Kingdom net operating loss carryforwards of
approximately $5.5 billion that have no expiration date. Pursuant to United
Kingdom law, these losses are only available to offset income of the separate
entity that generated the loss. A portion of the United Kingdom net operating
loss carryforward relates to dual resident companies, of which the U.S net
operating loss carryforward amount is approximately $1.7 billion.

As discussed in Note 1, the Company emerged from Chapter 11 bankruptcy on
January 10, 2003. A restructuring of the Companys debt will give rise to
cancellation of indebtedness income (COD) in 2003, which will be non-taxable
since the debt cancellation is in connection with a bankruptcy reorganization.
However, to the extent that such amount is excluded from U.S. taxable income,
certain tax attributes are subject to reduction, including certain U.S. net
operating loss carryforwards and U.S. capital loss carryforwards. The
reduction of tax attributes should have no material impact on the Companys
financial statement position since the deferred tax assets related to these tax
attributes are offset by a corresponding valuation allowance. Furthermore, the
reorganization will cause an ownership change pursuant to Internal Revenue Code
Section 382. Section 382 will severely limit the Companys ability to utilize
any remaining U.S. net operating loss carryforwards and may limit the Companys
ability to deduct any built-in losses recognized within the subsequent
five-year period.

In 2002, the Internal Revenue Service completed its federal income tax audit of
the Company for the years 1996, 1997 and 1998. The audit resulted in a
reduction in U.S. net operating loss carryforwards that had no material impact
on the Company.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

14.   Income Taxes (continued)

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

|                                          |                                                    |   |                         |       |      |   |          |         |  |   |        |       | 
|----------------------------------------- | -------------------------------------------------- | - | ----------------------- | ----- | ---- | - | -------- | ------- |  | - | ------ | ----- | 
|                                          |                                                    |   | Year Ended December 31,
|                                          |                                                    |   |                        
|                                          |                                                    |   | 2002                    |       | 2001 |   | 2000    
|                                          |                                                    |   |                         |       |      |   |         
|                                          |                                                    |   | (in millions)          
|(Benefit) at federal statutory rate (35%) |                                                    | $ | (840.5                  | )     |      | $ | (4,101.6 | )       |  | $ | (863.8 | )    
|Add:                                      |                                                    |   |                         |       |      |   |          |         |  |   |        |      
|                                          | Non-deductible asset impairments                   |   |                         | 126.0 |      |   |          | 2,856.6 |  |   |        |      | 
|                                          | Foreign losses with no benefit                     |   |                         | 531.0 |      |   |          | 809.7   |  |   |        | 568.6 | 
|                                          | U.S. losses with no benefit                        |   |                         | 159.0 |      |   |          | 436.6   |  |   |        | 215.3 | 
|                                          | Prior year accelerated depreciation                |   |                         |      |      |   |          | 116.3   |  |   |        |      | 
|                                          | State and local income tax, net of federal benefit |   |                         | (1.2  | )    |   |          | 0.5     |  |   |        |      | 
|                                          |                                                    |   |                         |       |      |   |          |         |  |   |        |       | 
|                                          |                                                    | $ | (25.7                   | )     |      | $ | 118.1    |         |  | $ | (79.9  | )    
|                                          |                                                    |   |                         |       |      |   |          |         |  |   |        |       | 

15.   Fair Values of Financial Instruments

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

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

Marketable securities:The carrying amounts reported in the consolidated
balance sheets approximate fair value.

Long-term debt:The carrying amounts of the bank credit facilities approximate
their fair values. The fair values of the Companys other debt in the following
table are based on the quoted market prices.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

15.   Fair Values of Financial Instruments (continued)

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

|                          |                                 |   |                   |         |                   |   |          |         |       |   |       |         |  |   |       |         | 
|------------------------- | ------------------------------- | - | ----------------- | ------- | ----------------- | - | -------- | ------- | ----- | - | ----- | ------- |  | - | ----- | ------- | 
|                          |                                 |   | December 31, 2002 |         | December 31, 2001
|                          |                                 |   |                   |         |                  
|                          |                                 |   | Carrying          |         | Fair              |   | Carrying |         | Fair 
|                          |                                 |   | Amount            |         | Value             |   | Amount   |         | Value
|                          |                                 |   |                   |         |                   |   |          |         |      
|                          |                                 |   | (in millions)    
|Cash and cash equivalents |                                 | $ | 502.0             |         |                   | $ | 502.0    |         |       | $ | 251.1 |         |  | $ | 251.1 |        
|Marketable securities     |                                 |   | 5.2               |         |                   |   | 5.2      |         |       |   |      |         |  |   |      |        
|Long-term debt:           |                                 |   |                   |         |                   |   |          |         |       |   |       |         |  |   |       |        
|                          | 12-3/4% Notes                   |   |                   | 277.8   |                   |   |          | 30.6    |       |   |       | 277.8   |  |   |       | 91.7    | 
|                          | 11-1/2% Notes                   |   |                   | 1,050.0 |                   |   |          | 115.5   |       |   |       | 1,050.0 |  |   |       | 336.0   | 
|                          | 10% Notes                       |   |                   | 400.0   |                   |   |          | 44.0    |       |   |       | 400.0   |  |   |       | 120.0   | 
|                          | 9-1/2% Sterling Notes           |   |                   | 200.8   |                   |   |          | 20.1    |       |   |       | 181.4   |  |   |       | 60.1    | 
|                          | 10-3/4% Sterling Notes          |   |                   | 439.2   |                   |   |          | 41.0    |       |   |       | 382.3   |  |   |       | 124.3   | 
|                          | 9-3/4% Notes                    |   |                   | 1,193.3 |                   |   |          | 130.0   |       |   |       | 1,153.8 |  |   |       | 338.0   | 
|                          | 9-3/4% Sterling Notes           |   |                   | 441.6   |                   |   |          | 37.2    |       |   |       | 385.9   |  |   |       | 124.8   | 
|                          | 11-1/2% Notes                   |   |                   | 625.0   |                   |   |          | 68.8    |       |   |       | 625.0   |  |   |       | 200.0   | 
|                          | 12-3/8% Notes                   |   |                   | 380.6   |                   |   |          | 49.5    |       |   |       | 364.9   |  |   |       | 108.0   | 
|                          | 7% Convertible Notes            |   |                   | 489.8   |                   |   |          | 58.8    |       |   |       | 489.8   |  |   |       | 53.9    | 
|                          | 9-1/4% Euro Notes               |   |                   | 262.1   |                   |   |          | 26.2    |       |   |       | 222.5   |  |   |       | 74.6    | 
|                          | 9-7/8% Euro Notes               |   |                   | 367.0   |                   |   |          | 36.7    |       |   |       | 311.5   |  |   |       | 104.4   | 
|                          | 11-1/2% Euro Notes              |   |                   | 166.1   |                   |   |          | 15.4    |       |   |       | 135.6   |  |   |       | 44.9    | 
|                          | 11-7/8% Notes                   |   |                   | 491.7   |                   |   |          | 80.0    |       |   |       | 490.7   |  |   |       | 160.0   | 
|                          | 12-3/8% Euro Notes              |   |                   | 315.3   |                   |   |          | 31.5    |       |   |       | 267.8   |  |   |       | 90.8    | 
|                          | 6-3/4% Convertible Notes        |   |                   | 1,150.0 |                   |   |          | 184.0   |       |   |       | 1,150.0 |  |   |       | 353.6   | 
|                          | DIP Facility                    |   |                   | 229.0   |                   |   |          | 229.0   |       |   |       |        |  |   |       |        | 
|                          | Senior Credit Facility          |   |                   | 4,482.1 |                   |   |          | 4,482.1 |       |   |       | 4,050.0 |  |   |       | 4,050.0 | 
|                          | Working Capital Credit Facility |   |                   | 657.1   |                   |   |          | 657.1   |       |   |       | 145.4   |  |   |       | 145.4   | 
|                          | 11.2% Debentures                |   |                   | 517.3   |                   |   |          | 372.5   |       |   |       | 517.3   |  |   |       | 367.3   | 
|                          | 13-1/4% Notes                   |   |                   | 285.1   |                   |   |          | 34.2    |       |   |       | 285.1   |  |   |       | 77.0    | 
|                          | 11-3/4% Notes                   |   |                   | 531.0   |                   |   |          | 63.7    |       |   |       | 531.0   |  |   |       | 132.8   | 
|                          | 10-3/4% Notes                   |   |                   | 420.5   |                   |   |          | 50.5    |       |   |       | 415.1   |  |   |       | 100.9   | 
|                          | 10% Sterling Notes              |   |                   | 217.3   |                   |   |          | 173.8   |       |   |       | 196.3   |  |   |       | 143.4   | 
|                          | 9-1/8% Notes                    |   |                   | 110.0   |                   |   |          | 77.0    |       |   |       | 110.0   |  |   |       | 71.5    | 

16.   Related Party Transactions

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

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

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.   Related Party Transactions (continued)

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

Other charges in 2002 include $129.6 million of non-cash expense for allowances
for the cancellation of receivables from NTL Europe in accordance with the Plan
which were payable to United Kingdom subsidiaries of the Company.

On September 28, 2001, the Company loaned NTL Europe $150.0 million in cash and
received 15.0% Promissory Notes due September 30, 2004. Interest was payable
monthly in cash at a rate of 15.0% per annum beginning on October 31, 2001.
Interest income  NTL Europe, Inc. includes $8.0 million and $5.8 million in
2002 and 2001, respectively, from such notes. Upon emergence from Chapter 11
reorganization and in accordance with the Plan, these notes were canceled.
Other charges in 2002 include $152.3 million of expense for allowances for the
cancellation of these notes.

On April 5, 2002, following receipt of the proceeds from the sale of NTL
Australia, NTL Delaware loaned £90.0 million to NTL (UK) Group, Inc. Such loan
was actually made (with the approval of the lenders under the UK credit
facilities) to NTL (UK) Group, Inc. and then on-lent to certain subsidiaries of
NTL (UK) Group, Inc. Interest on the note was at 23% per annum, compounded
semiannually, and was payable, in cash, on the earlier of April 1, 2006 or the
redemption date of the notes. In connection with the DIP facility, the current
interest rate on this loan had been reduced from 23% per annum to 11% per
annum. Interest expense  NTL Europe, Inc. includes $14.8 million from such
loan. Upon emergence from Chapter 11 reorganization and in accordance with the
Plan, such debt was repaid.

NTL Delaware was a lender under the
DIP facility. Interest expense  NTL
Europe, Inc. includes $2.9 of fees paid to NTL Delaware under this facility.

Pursuant to the DIP facility, all funding needs of the debtors were funded
through the proceeds of the DIP facility, in accordance with a budget and the
terms of the DIP facility agreement. Communications Cable Funding Corp. had
entered into intercompany note agreements with NTL Europe and NTL (Delaware),
Inc. to evidence such transactions. The notes earned interest on the unpaid
principal amount for three months from July 15, 2002 at the rate of 11% per
annum. With respect to each successive three month period following that date,
the rate per annum increased incrementally by 1% over the immediately preceding
three month period but will not exceed 18% per annum for any three month
period. Interest income  NTL Europe, Inc. includes $0.8 million of interest
due from NTL Europe, Inc. for such notes. Upon emergence from Chapter 11
reorganization and in accordance with the Plan, such debt in the amount of
$69.3 million was repaid.

The Companys President  Chief Executive Officer is also the Chairman of ATX
Communications, Inc. (ATX) (formerly known as CoreComm Holdco, Inc.). Until
January 2003, ATX shared resources with the Company related specifically to
corporate activity, including corporate employees and a corporate office. In
conjunction with these arrangements, the Company provided ATX with management,
financial, legal and administrative support services through the use of
employees, as well as access to office space and equipment and use of supplies
and related office services. The salaries of employees providing service to
ATX were charged to ATX by the Company based on the allocation of their time
spent providing services to ATX.

Amounts charged to ATX by the Company consist of direct costs allocated to ATX
where indentifiable and a percentage of the portion of the Companys corporate
overhead which cannot be specifically allocated to the Company. Effective
January 1, 2001, the percentage used to allocate corporate overhead was
reduced. The Companys charges to ATX commenced in October 1998. It is not
practicable to determine the amounts of these expenses that would have been
incurred had ATX operated as an unaffiliated entity. In the opinion of
management, this allocation method is reasonable. For the years ended December
31, 2002, 2001 and 2000, the Company charged ATX $0.4 million,
$0.4 million and
$1.2 million, respectively, which reduced the Companys corporate expenses.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

16.   Related Party Transactions (continued)

On April 12, 2002, our former ultimate parent company purchased $15.0 million
of an unsecured convertible note from ATX and received warrants to purchase
770,000 shares of ATX common stock at an exercise price of $0.01 per share that
expire in April 2011. In addition, concurrently with the note purchase and
without additional compensation, the Company entered into a network and
software agreement with ATX. Under the agreement, ATX will provide U.S.
network for Internet traffic from the Companys UK customers for three years,
as well as a royalty free license to use certain billing and provisioning
software and know-how.

The Company obtains billing and software development services from ATX. ATX
billed the Company $2.9 million, $3.4 million and $5.9 million in the years
ended December 31, 2002, 2001 and 2000, respectively for these services. In
2001, the Company entered into a license agreement with ATX whereby the Company
was granted an exclusive irrevocable, perpetual license to billing software
developed by ATX for telephony rating, digital television events rating, fraud
management and other tasks. The sales price was cash of $9.8 million for the
development costs expended by ATX plus a fixed amount of $3.0 million
representing the one-time perpetual license fee. The billing software was
being used by the Company at the time of this agreement, and was being
maintained and modified by ATX under an ongoing software maintenance and
development outsourcing agreement between the companies.

In March 2000, the Company and ATX announced that they had entered into an
agreement to link their networks in order to create an international Internet
backbone that commenced operations in February 2001. The Company incurred
costs of $0.3 million for network usage in the year ended December 31, 2001.
The Company has not incurred any additional costs subsequent to 2001.

At December 31, 2002 and 2001, the Company had a receivable from ATX of $2.5
million and $1.1 million, respectively.

17.   Shareholders Equity

The following description of
authorized capital stock, common stock, stockholder rights plan and
stock options reflects changes as a result of the Company's emergence
from Chapter 11 reorganization.

Authorized Capital Stock

Pursuant to the Companys reorganization, the Companys authorized capital
stock consists of 400,000,000 shares of common stock, par value $0.01 per share
and 5,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

On the Effective Date, the Company issued to certain of its stakeholders
50,000,969 shares of common stock and 8,750,496 Series A Warrants, each of
which entitles the holder thereof to purchase one share of the Companys common
stock at an initial exercise price of $309.88, subject to adjustment. The
Series A Warrants expire on January 10, 2011. In addition, the Company issued
500,000 shares of common stock to initial purchases of the Exit Notes.

Stockholder Rights Plan

The Companys Rights Agreement provides that a Right will be issued with each
share of common stock issued. The Rights are exercisable upon the occurrence
of certain potential takeover events and will expire in January 2013 unless
previously redeemed or exchanged by the Company. When exercisable, each Right
entitles the owner to purchase from the Company one one-thousandth of a share
of Series A Junior Participating Preferred Stock (Rights Preferred Stock) at
the Stockholder Rights purchase price, subject to adjustment.

The Rights Preferred Stock will be entitled to a quarterly dividend payment
equal to the greater of $10.00 and 1,000 times the aggregate amount per share
of all dividends declared on the common stock since the immediately preceding
dividend payment date. In the event of liquidation, the holders of Rights
Preferred Stock will be entitled to the greater of $1,000 for each share of
Rights Preferred Stock held, plus any accrued and unpaid dividends or
distributions on those shares and the aggregate amount per share equal to 1,000
times the aggregate amount to be distributed per share to holders of common
stock. Each share of Rights Preferred Stock will have 1,000 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 common stock
of the acquiring Company valued at two times the exercise price of the
Stockholder Right. The Rights are protected by customary antidilution
provisions.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

Stock Options

Upon approval by the compensation committee of the board of directors, the
Company will adopt the NTL Incorporated 2003 Stock Option Plan (the Stock
Option Plan). The Stock Option Plan is intended to provide incentives to
certain employees of the Company and its subsidiaries to foster and promote the
long term growth and performance of the Company and to better align such
employees interests with the stockholders of the Company. Under the Stock
Option Plan, options to purchase up to 10% of the issued and outstanding shares
of the Companys common stock as of the Effective Date may be granted from time
to time to certain employees of the Company and its subsidiaries. Accordingly,
the Company has reserved 5 million shares of common stock for issuance under
the Stock Option Plan.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

Stock Options (continued)

The Companys employees participated in the various stock option plans of its
former ultimate parent company. All options to purchase shares of the
Companys former ultimate parent companys common stock were cancelled on the
Effective Date pursuant to the Plan.

There were none, 13.7 million and 34.8 million options granted under these
plans for the years ended December 31, 2002, 2001 and 2000, respectively.

Pro forma information regarding net loss has been determined as if the Company
had accounted for its former ultimate parents employee stock options under the
fair value method of SFAS No. 123. The fair value for these options was
estimated at the date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions for 2002, 2001 and 2000:
risk-free interest rates of 4.47%, 4.47% and 5.30%, respectively, dividend
yield of 0%, volatility factor of the expected market price of the Companys
former ultimate parents common stock of .702, .702, and .385, respectively,
and a weighted-average expected life of the option of 10 years
in 2002, 2001 and
2000.

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

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

Stock Options (continued)

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options vesting period. The effects of applying SFAS No. 123 on pro forma
disclosures of net loss for the years ended December 31, 2002, 2001 and 2000
are not likely to be representative of the pro forma effects on net loss in
future years. Following is the Companys pro forma information as if the
Company and not its former ultimate parent had issued the stock options:

|                     |  |               |          |      |  |      |           |   |  |   |          |  
|-------------------- |  | ------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                     |  | Year Ended   
|                     |  | December 31, 
|                     |  |              
|                     |  | 2002          |          | 2001 |  | 2000
|                     |  |               |          |      |  |     
|                     |  | (in millions)
|Net (loss)           |  | $             | (2,375.8 | )    |  | $    | (11,837.0 | ) |  | $ | (2,388.1 | )
|Pro forma net (loss) |  | $             | (2,631.7 | )    |  | $    | (12,096.9 | ) |  | $ | (2,636.7 | )

18.   Employee Benefit Plans

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

At December 31, 2002, the projected benefit obligations of the Companys
defined benefit pension plans exceeded the fair value of the plan assets by
$121.3 million. Each of the Companys four defined benefit
pension plans had accumulated benefit obligations in excess of the fair value of plan
assets at December 31, 2002. The projected benefit obligations,
accumulated benefit obligations and fair value of plan assets for
these four plans were $333.5 million, $289.4 million and
$212.2 million, respectively, at December 31, 2002.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

18.   Employee Benefit Plans (continued)

|                                                                      |  |               |        |      |  |   |       |  
|--------------------------------------------------------------------- |  | ------------- | ------ | ---- |  | - | ----- | -
|                                                                      |  | Year Ended   
|                                                                      |  | December 31, 
|                                                                      |  |              
|                                                                      |  | 2002          |        | 2001
|                                                                      |  |               |        |     
|                                                                      |  | (in millions)
|Change in benefit obligation                                          |  |               |        |      |  |   |       |  
|Benefit obligation at beginning of year                               |  | $             | 200.3  |      |  | $ | 201.8 |  
|Acquisition                                                           |  |               | 20.8   |      |  |   |      |  
|Service cost                                                          |  |               | 10.8   |      |  |   | 9.9   |  
|Interest cost                                                         |  |               | 17.3   |      |  |   | 11.3  |  
|Actuarial losses (gains)                                              |  |               | 85.3   |      |  |   | (7.0  | )
|Benefits paid                                                         |  |               | (10.1  | )    |  |   | (6.3  | )
|Curtailments/settlements                                              |  |               | (1.8   | )    |  |   |      |  
|Other                                                                 |  |               | 1.9    |      |  |   |      |  
|Foreign currency exchange rate changes                                |  |               | 9.0    |      |  |   | (9.4  | )
|                                                                      |  |               |        |      |  |   |       |  
|Benefit obligation at end of year                                     |  | $             | 333.5  |      |  | $ | 200.3 |  
|                                                                      |  |               |        |      |  |   |       |  
|Change in plan assets                                                 |  |               |        |      |  |   |       |  
|Fair value of plan assets at beginning of year                        |  | $             | 229.2  |      |  | $ | 269.1 |  
|Acquisition                                                           |  |               | 17.3   |      |  |   |      |  
|Actual return on plan assets                                          |  |               | (43.5  | )    |  |   | (31.0 | )
|Company contributions                                                 |  |               | 8.9    |      |  |   | 8.0   |  
|Plan participants contributions                                      |  |               | 3.0    |      |  |   | 3.0   |  
|Benefits paid                                                         |  |               | (10.1  | )    |  |   | (6.3  | )
|Curtailments/settlements                                              |  |               | (1.4   | )    |  |   |      |  
|Other                                                                 |  |               | (1.3   | )    |  |   |      |  
|Foreign currency exchange rates changes                               |  |               | 10.1   |      |  |   | (13.6 | )
|                                                                      |  |               |        |      |  |   |       |  
|Fair value of plan assets at end of year                              |  | $             | 212.2  |      |  | $ | 229.2 |  
|                                                                      |  |               |        |      |  |   |       |  
|Funded status of the plan                                             |  | $             | (121.3 | )    |  | $ | 28.9  |  
|Unrecognized net actuarial (gains) losses                             |  |               | 136.5  |      |  |   | (12.4 | )
|Unrecognized transition obligation                                    |  |               | 5.6    |      |  |   | 5.0   |  
|                                                                      |  |               |        |      |  |   |       |  
|Net
amount recognized                                                 |  | $             | 20.8   |      |  | $ | 21.5  |  
|                                                                      |  |               |        |      |  |   |       |  
|Amounts
recognized in the statement of financial position
consist of: |  |               |        |      |  |   |       |  
|Prepaid
benefit cost                                                  |  | $             |       |      |  | $ | 16.5  |  
|Accrued
benefit liability                                             |  |               | (88.5  | )    |  |   |      |  
|Intangible
asset                                                      |  |               | 5.6    |      |  |   | 5.0   |  
|Accumulated
other comprehensive loss                                  |  |               | 103.7  |      |  |   |      |  
|                                                                      |  |               |        |      |  |   |       |  
|Net
amount recognized                                                 |  | $             | 20.8   |      |  | $ | 21.5  |  
|                                                                      |  |               |        |      |  |   |       |  

|                       |                                                  |  |                         |              |      |  |  |              |  
|---------------------- | ------------------------------------------------ |  | ----------------------- | ------------ | ---- |  |  | ------------ | -
|                       |                                                  |  | Year Ended December 31,
|                       |                                                  |  |                        
|                       |                                                  |  | 2002                    |              | 2001
|                       |                                                  |  |                         |              |     
|Actuarial assumptions: |                                                  |  |                         |              |      |  |  |             
|                       | Discount rate                                    |  |                         | 5.50% - 5.90 | %    |  |  | 6.00         | %
|                       | Rate of compensation increase                    |  |                         | 3.30% - 5.20 | %    |  |  | 3.50% - 4.00 | %
|                       | Expected long-term rate of return on plan assets |  |                         | 6.60% - 7.50 | %    |  |  | 7.00% - 7.50 | %

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

18.   Employee Benefit Plans (continued)

The components of net pension costs are as follows:

|                               |  |                         |       |      |  |      |       |   |  |   |       |  
|------------------------------ |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                               |  | Year Ended December 31,
|                               |  |                        
|                               |  | 2002                    |       | 2001 |  | 2000
|                               |  |                         |       |      |  |     
|                               |  | (in millions)          
|Service cost                   |  | $                       | 10.8  |      |  | $    | 9.9   |   |  | $ | 10.7  |  
|Interest cost                  |  |                         | 17.3  |      |  |      | 11.3  |   |  |   | 11.3  |  
|Curtailments/settlements       |  |                         | 1.8   |      |  |      |      |   |  |   |      |  
|Expected return on plan assets |  |                         | (20.0 | )    |  |      | 31.0  |   |  |   | (2.0  | )
|Net amortization and deferral  |  |                         | 0.7   |      |  |      | (51.9 | ) |  |   | (20.6 | )
|                               |  |                         |       |      |  |      |       |   |  |   |       |  
|                               |  | $                       | 10.6  |      |  | $    | 0.3   |   |  | $ | (0.6  | )
|                               |  |                         |       |      |  |      |       |   |  |   |       |  

19.   Leases

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

|                               |  |              |       |      |  |   |       |  
|------------------------------ |  | ------------ | ----- | ---- |  | - | ----- | -
|                               |  | December 31,
|                               |  |             
|                               |  | 2002         |       | 2001
|                               |  |              |       |     
|Land, buildings and equipment  |  | $            | 89.0  |      |  | $ | 100.2 |  
|Less: accumulated depreciation |  |              | (26.9 | )    |  |   | (28.5 | )
|                               |  |              |       |      |  |   |       |  
|                               |  | $            | 62.1  |      |  | $ | 71.7  |  
|                               |  |              |       |      |  |   |       |  

Future minimum annual payments at December 31, 2002 are as follows (in
millions). The table reflects the Companys contractual obligations.

|                                         |  |         |        |           |  |   |       | 
|---------------------------------------- |  | ------- | ------ | --------- |  | - | ----- | 
|                                         |  | Capital |        | Operating
|                                         |  | Leases  |        | Leases   
|                                         |  |         |        |          
|Year ending December 31:                 |  |         |        |           |  |   |       | 
|2003                                     |  | $       | 9.3    |           |  | $ | 84.0  | 
|2004                                     |  |         | 9.0    |           |  |   | 70.5  | 
|2005                                     |  |         | 8.0    |           |  |   | 60.8  | 
|2006                                     |  |         | 7.1    |           |  |   | 53.7  | 
|2007                                     |  |         | 6.7    |           |  |   | 52.8  | 
|Thereafter                               |  |         | 166.7  |           |  |   | 394.5 | 
|                                         |  |         |        |           |  |   |       | 
|Total minimum lease payments             |  |         | 206.8  |           |  | $ | 716.3 | 
|                                         |  |         |        |           |  |   |       | 
|Less: amount representing interest       |  |         | (140.0 | )         |  |   |       | 
|                                         |  |         |        |           |  |   |       | 
|Present value of net minimum obligations |  |         | 66.8   |           |  |   |       | 
|Less: current portion                    |  |         | (66.8  | )         |  |   |       | 
|                                         |  |         |        |           |  |   |       | 
|                                         |  | $       |       |           |  |   |       | 
|                                         |  |         |        |           |  |   |       | 

Leases for buildings, office space and equipment extend through 2031. Total
rental expense for the years ended December 31, 2002, 2001 and 2000 under
operating leases was $140.1 million, $74.5 million and $46.2 million,
respectively.

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##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

20.   Commitments and Contingent Liabilities

At December 31, 2002, the Company was committed to pay approximately $1,422.0
million for equipment and services and for investments in and loans to
affiliates. This amount includes approximately $984.4 million for operations
and maintenance contracts and other commitments from January 1,
2004 to 2013. The aggregate amount of the fixed and determinable
portion of these obligations for the succeeding fiscal years is as
follows (in millions):

|                         |  |   |      
|------------------------ |  | - | -----
|Year Ending December 31: |  |   |      
|                         |  |   |      
|2003                     |  | $ | 437.6
|2004                     |  |   | 109.7
|2005                     |  |   | 109.4
|2006                     |  |   | 109.4
|2007                     |  |   | 109.4
|                         |  |  
|                         |  | $ | 875.5
|                         |  |  

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

21.   Summarized Financial Information About NTL Incorporated (formerly NTL
Communications Corp.)

In connection with the Companys emergence from Chapter 11 reorganization, the
Company and certain of its subsidiaries (the Guarantors) issued the Exit
Notes. The Exit Notes are guaranteed on a senior basis by the following
subsidiaries of the Company: NTL Digital (US) Inc., CableTel Ventures Limited,
Bearsden Nominees, Inc., CableTel Programming, Inc., NTL International
Services, Inc. and NTL Funding (NJ), Inc. (collectively referred to as the
Senior Guarantors). The Exit Notes are guaranteed on a subordinated basis by
Communications Cable Funding Corp. (referred to as the Subordinated Guarantor
and together with the Senior Guarantors, the Guarantors).

The following condensed consolidating financial information of the Company as
of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001
and 2000 is being provided pursuant to Article 3-10(c) of Regulation S-X and
SOP 90-7.

F-158



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##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

21.   Summarized Financial Information about NTL Incorporated (formerly NTL
Communications Corp.) (continued)



|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|--------------------------------------------------------------------- |  | ---------------------------- | -------- | ------- |  | -------------- | ------ | -------------- |  | ----------- | ------ | ----- |  | - | -------- | - |  | - | ---- | -
|                                                                      |  | Year Ended December 31, 2002
|                                                                      |  |                             
|                                                                      |  |                              |          |         |  | Communications |        |                |  |             |        |       |  |   |          |   |  |  
|                                                                      |  | NTL                          |          | Cable   |  |                |        |                |  | Entities in |        | Other
|Statement of Operations                                               |  | Incorporated                 |          | Funding |  | Diamond        |        | Reorganization |  | Guarantors 
|                                                                      |  |                              |          |         |  |                |        |                |  |            
|                                                                      |  | (in millions)               
|Revenue                                                               |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Consumer telecommunications and
television                            |  | $                            |         |         |  | $              |       |                |  | $           |       |       |  | $ |         |   |  | $ |     |  
|Business telecommunications                                           |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   |     |  
|Broadcast transmission and other                                      |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   |     |  
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|                                                                      |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   |     |  
|Costs and expenses                                                    |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Operating expenses (exclusive of
depreciation shown separately
below) |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   | 0.8  |  
|Selling, general and
administrative expenses                          |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   | 0.3  |  
|Asset impairments                                                     |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   |     |  
|Non-cash compensation                                                 |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   |     |  
|Other charges                                                         |  |                              | 154.8    |         |  |                |        |                |  |             |       |       |  |   | 154.8    |   |  |   |     |  
|Corporate expenses                                                    |  |                              | 37.9     |         |  |                | (22.3  | )              |  |             |       |       |  |   | 15.6     |   |  |   |     |  
|Depreciation                                                          |  |                              | 0.5      |         |  |                |       |                |  |             |       |       |  |   | 0.5      |   |  |   |     |  
|Amortization                                                          |  |                              | 26.2     |         |  |                |       |                |  |             | 4.2    |       |  |   | 30.4     |   |  |   |     |  
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|                                                                      |  |                              | 219.4    |         |  |                | (22.3  | )              |  |             | 4.2    |       |  |   | 201.3    |   |  |   | 1.1  |  
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Operating (loss)                                                      |  |                              | (219.4   | )       |  |                | 22.3   |                |  |             | (4.2   | )     |  |   | (201.3   | ) |  |   | (1.1 | )
|Other income (expense)                                                |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Interest income and other, net                                        |  |                              | 0.3      |         |  |                | 110.0  |                |  |             | 198.9  |       |  |   | 309.2    |   |  |   | 5.0  |  
|Interest
income  NTL Europe, Inc.                                    |  |                              | 8.0      |         |  |                | 0.8    |                |  |             |       |       |  |   | 8.8      |   |  |   |     |  
|Interest expense                                                      |  |                              | (280.3   | )       |  |                | (128.0 | )              |  |             | (84.5  | )     |  |   | (492.8   | ) |  |   | (4.4 | )
|Interest expense  NTL Europe, Inc.                                   |  |                              |         |         |  |                | (2.9   | )              |  |             |       |       |  |   | (2.9     | ) |  |   |     |  
|Share of (losses) from equity
investments                             |  |                              | (1,516.9 | )       |  |                |       |                |  |             | (247.2 | )     |  |   | (1,764.1 | ) |  |   | (3.4 | )
|Other gains (losses)                                                  |  |                              |         |         |  |                |       |                |  |             |       |       |  |   |         |   |  |   |     |  
|Foreign currency transaction
(losses) gains                           |  |                              | (282.0   | )       |  |                |       |                |  |             | (11.7  | )     |  |   | (293.7   | ) |  |   | 0.8  |  
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Income (loss) before
recapitalization
items and income taxes          |  |                              | (2,290.3 | )       |  |                | 2.2    |                |  |             | (148.7 | )     |  |   | (2,436.8 | ) |  |   | (3.1 | )
|Recapitalization items, net                                           |  |                              | (86.7    | )       |  |                |       |                |  |             | (5.8   | )     |  |   | (92.5    | ) |  |   |     |  
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Income (loss) before income taxes                                     |  |                              | (2,377.0 | )       |  |                | 2.2    |                |  |             | (154.5 | )     |  |   | (2,529.3 | ) |  |   | (3.1 | )
|Income tax benefit                                                    |  |                              | 1.2      |         |  |                |       |                |  |             | (1.4   | )     |  |   | (0.2     | ) |  |   |     |  
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  
|Net income (loss)                                                     |  | $                            | (2,375.8 | )       |  | $              | 2.2    |                |  | $           | (155.9 | )     |  | $ | (2,529.5 | ) |  | $ | (3.1 | )
|                                                                      |  |                              |          |         |  |                |        |                |  |             |        |       |  |   |          |   |  |   |      |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|--------------------------------------------------------------------- |  | ---------------------------- | -------- | -------------- |  | ----------- | -------- | ------------ |  | --- | ------- | ------------ |  | - | -------- | -
|                                                                      |  | Year Ended December 31, 2002
|                                                                      |  |                             
|                                                                      |  |                              |          |                |  | Entities    |          |              |  |     |         | Consolidated
|                                                                      |  | All Other                    |          | Not in         |  |             |          |              |  | NTL
|Statement of Operations                                               |  | Subsidiaries                 |          | Reorganization |  | Adjustments |          | Incorporated
|                                                                      |  |                              |          |                |  |             |          |             
|                                                                      |  | (in millions)               
|Revenue                                                               |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Consumer telecommunications and
television                            |  | $                            | 2,074.1  |                |  | $           | 2,074.1  |              |  | $   |        |              |  | $ | 2,074.1  |  
|Business telecommunications                                           |  |                              | 880.1    |                |  |             | 880.1    |              |  |     |        |              |  |   | 880.1    |  
|Broadcast transmission and other                                      |  |                              | 310.9    |                |  |             | 310.9    |              |  |     |        |              |  |   | 310.9    |  
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|                                                                      |  |                              | 3,265.1  |                |  |             | 3,265.1  |              |  |     |        |              |  |   | 3,265.1  |  
|Costs and expenses                                                    |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Operating expenses (exclusive of
depreciation shown separately
below) |  |                              | 1,501.7  |                |  |             | 1,502.5  |              |  |     |        |              |  |   | 1,502.5  |  
|Selling, general and
administrative expenses                          |  |                              | 769.8    |                |  |             | 770.1    |              |  |     | (0.3    | )            |  |   | 769.8    |  
|Asset impairments                                                     |  |                              | 445.1    |                |  |             | 445.1    |              |  |     |        |              |  |   | 445.1    |  
|Non-cash compensation                                                 |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Other charges                                                         |  |                              | 234.4    |                |  |             | 234.4    |              |  |     |        |              |  |   | 389.2    |  
|Corporate expenses                                                    |  |                              | 3.1      |                |  |             | 3.1      |              |  |     |        |              |  |   | 18.7     |  
|Depreciation                                                          |  |                              | 1,477.4  |                |  |             | 1,477.4  |              |  |     |        |              |  |   | 1,477.9  |  
|Amortization                                                          |  |                              | 33.3     |                |  |             | 33.3     |              |  |     |        |              |  |   | 63.7     |  
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|                                                                      |  |                              | 4,464.8  |                |  |             | 4,465.9  |              |  |     | (0.3    | )            |  |   | 4,666.9  |  
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Operating (loss)                                                      |  |                              | (1,199.7 | )              |  |             | (1,200.8 | )            |  |     | 0.3     |              |  |   | (1,401.8 | )
|Other income (expense)                                                |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Interest income and other, net                                        |  |                              | 19.4     |                |  |             | 24.4     |              |  |     | (312.6  | )            |  |   | 21.0     |  
|Interest income  NTL Europe, Inc.                                    |  |                              |         |                |  |             |         |              |  |     |        |              |  |   | 8.8      |  
|Interest expense                                                      |  |                              | (696.6   | )              |  |             | (701.0   | )            |  |     | 431.3   |              |  |   | (762.5   | )
|Interest expense  NTL Europe, Inc.                                   |  |                              | (14.8    | )              |  |             | (14.8    | )            |  |     |        |              |  |   | (17.7    | )
|Share of (losses) from equity
investments                             |  |                              |         |                |  |             | (3.4     | )            |  |     | 1,764.1 |              |  |   | (3.4     | )
|Other gains (losses)                                                  |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Foreign currency transaction
(losses) gains                           |  |                              | 199.6    |                |  |             | 200.4    |              |  |     | (0.8    | )            |  |   | (94.1    | )
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Income (loss) before
recapitalization
items and income taxes          |  |                              | (1,692.1 | )              |  |             | (1,695.2 | )            |  |     | 1,882.3 |              |  |   | (2,249.7 | )
|Recapitalization items, net                                           |  |                              | (59.3    | )              |  |             | (59.3    | )            |  |     |         |              |  |   | (151.8   | )
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Income (loss) before income taxes                                     |  |                              | (1,751.4 | )              |  |             | (1,754.4 | )            |  |     | 1,882.3 |              |  |   | (2,401.5 | )
|Income tax benefit                                                    |  |                              | 25.9     |                |  |             | 25.9     |              |  |     |        |              |  |   | 25.7     |  
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Net income (loss)                                                     |  | $                            | (1,725.5 | )              |  | $           | (1,728.6 | )            |  | $   | 1,882.3 |              |  | $ | (2,375.8 | )
|                                                                      |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  

F-159



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##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

21.   Summarized Financial Information about NTL Incorporated (formerly NTL
Communications Corp.) (continued)



|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|--------------------------------------------------------------------- |  | ---------------------------- | --------- | ------- |  | -------------- | - | -------------- |  | ----------- | ------ | ----- |  | - | --------- | - |  | - | ----- | -
|                                                                      |  | Year Ended December 31, 2001
|                                                                      |  |                             
|                                                                      |  |                              |           |         |  | Communications |   |                |  |             |        |       |  |   |           |   |  |  
|                                                                      |  | NTL                          |           | Cable   |  |                |   |                |  | Entities in |        | Other
|Statement of Operations                                               |  | Incorporated                 |           | Funding |  | Diamond        |   | Reorganization |  | Guarantors 
|                                                                      |  |                              |           |         |  |                |   |                |  |            
|                                                                      |  | (in millions)               
|Revenue                                                               |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|Consumer telecommunications and
television                            |  | $                            |          |         |  | $              |  |                |  | $           |       |       |  | $ |          |   |  | $ |      |  
|Business telecommunications                                           |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|Broadcast transmission and other                                      |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|                                                                      |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|Costs and expenses                                                    |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|Operating expenses (exclusive of
depreciation shown separately
below) |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   | 0.8   |  
|Selling, general and
administrative expenses                          |  |                              | 3.2       |         |  |                |  |                |  |             |       |       |  |   | 3.2       |   |  |   | (0.1  | )
|Asset impairments                                                     |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|Non-cash compensation                                                 |  |                              | 30.6      |         |  |                |  |                |  |             |       |       |  |   | 30.6      |   |  |   |      |  
|Other charges                                                         |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|Corporate expenses                                                    |  |                              | 24.3      |         |  |                |  |                |  |             |       |       |  |   | 24.3      |   |  |   |      |  
|Depreciation                                                          |  |                              | 0.5       |         |  |                |  |                |  |             |       |       |  |   | 0.5       |   |  |   |      |  
|Amortization                                                          |  |                              | 24.5      |         |  |                |  |                |  |             | 4.0    |       |  |   | 28.5      |   |  |   | 0.5   |  
|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|                                                                      |  |                              | 83.1      |         |  |                |  |                |  |             | 4.0    |       |  |   | 87.1      |   |  |   | 1.2   |  
|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|Operating (loss)                                                      |  |                              | (83.1     | )       |  |                |  |                |  |             | (4.0   | )     |  |   | (87.1     | ) |  |   | (1.2  | )
|Other income (expense)                                                |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|Interest income and other, net                                        |  |                              | 13.6      |         |  |                |  |                |  |             | 184.1  |       |  |   | 197.7     |   |  |   | 3.5   |  
|Interest income  NTL Europe, Inc.                                    |  |                              | 5.8       |         |  |                |  |                |  |             |       |       |  |   | 5.8       |   |  |   |      |  
|Interest expense                                                      |  |                              | (762.8    | )       |  |                |  |                |  |             | (170.9 | )     |  |   | (933.7    | ) |  |   | (4.2  | )
|Interest expense  NTL Europe, Inc.                                   |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|Share of (losses) from equity
investments                             |  |                              | (11,067.5 | )       |  |                |  |                |  |             | (985.4 | )     |  |   | (12,052.9 | ) |  |   | (14.3 | )
|Other (losses)                                                        |  |                              |          |         |  |                |  |                |  |             |       |       |  |   |          |   |  |   |      |  
|Foreign currency transaction gains
(losses)                           |  |                              | 58.2      |         |  |                |  |                |  |             | (0.8   | )     |  |   | 57.4      |   |  |   | (3.6  | )
|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|(Loss) before income taxes                                            |  |                              | (11,835.8 | )       |  |                |  |                |  |             | (977.0 | )     |  |   | (12,812.8 | ) |  |   | (19.8 | )
|Income tax expense                                                    |  |                              | (1.2      | )       |  |                |  |                |  |             |       |       |  |   | (1.2      | ) |  |   |      |  
|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  
|Net (loss)                                                            |  | $                            | (11,837.0 | )       |  | $              |  |                |  | $           | (977.0 | )     |  | $ | (12,814.0 | ) |  | $ | (19.8 | )
|                                                                      |  |                              |           |         |  |                |   |                |  |             |        |       |  |   |           |   |  |   |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|--------------------------------------------------------------------- |  | ---------------------------- | --------- | -------------- |  | ----------- | --------- | ------------ |  | --- | -------- | ------------ |  | - | --------- | -
|                                                                      |  | Year Ended December 31, 2001
|                                                                      |  |                             
|                                                                      |  |                              |           |                |  | Entities    |           |              |  |     |          | Consolidated |  |  
|                                                                      |  | All Other                    |           | Not in         |  |             |           |              |  | NTL
|Statement of Operations                                               |  | Subsidiaries                 |           | Reorganization |  | Adjustments |           | Incorporated
|                                                                      |  |                              |           |                |  |             |           |             
|                                                                      |  | (in millions)               
|Revenue                                                               |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|Consumer telecommunications and
television                            |  | $                            | 2,069.2   |                |  | $           | 2,069.2   |              |  | $   |         |              |  | $ | 2,069.2   |  
|Business telecommunications                                           |  |                              | 836.8     |                |  |             | 836.8     |              |  |     |         |              |  |   | 836.8     |  
|Broadcast transmission and other                                      |  |                              | 283.6     |                |  |             | 283.6     |              |  |     |         |              |  |   | 283.6     |  
|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|                                                                      |  |                              | 3,189.6   |                |  |             | 3,189.6   |              |  |     |         |              |  |   | 3,189.6   |  
|Costs and expenses                                                    |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|Operating expenses (exclusive of
depreciation shown separately
below) |  |                              | 1,563.5   |                |  |             | 1,564.3   |              |  |     |         |              |  |   | 1,564.3   |  
|Selling, general and
administrative expenses                          |  |                              | 970.1     |                |  |             | 970.0     |              |  |     |         |              |  |   | 973.2     |  
|Asset impairments                                                     |  |                              | 8,160.6   |                |  |             | 8,160.6   |              |  |     |         |              |  |   | 8,160.6   |  
|Non-cash compensation                                                 |  |                              |          |                |  |             |          |              |  |     |         |              |  |   | 30.6      |  
|Other charges                                                         |  |                              | 297.9     |                |  |             | 297.9     |              |  |     |         |              |  |   | 297.9     |  
|Corporate expenses                                                    |  |                              |          |                |  |             |          |              |  |     |         |              |  |   | 24.3      |  
|Depreciation                                                          |  |                              | 1,360.9   |                |  |             | 1,360.9   |              |  |     |         |              |  |   | 1,361.4   |  
|Amortization                                                          |  |                              | 1,149.9   |                |  |             | 1,150.4   |              |  |     |         |              |  |   | 1,178.9   |  
|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|                                                                      |  |                              | 13,502.9  |                |  |             | 13,504.1  |              |  |     |         |              |  |   | 13,591.2  |  
|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|Operating (loss)                                                      |  |                              | (10,313.3 | )              |  |             | (10,314.5 | )            |  |     |         |              |  |   | (10,401.6 | )
|Other income (expense)                                                |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|Interest income and other, net                                        |  |                              | 16.0      |                |  |             | 19.5      |              |  |     | (188.4   | )            |  |   | 28.8      |  
|Interest income  NTL Europe, Inc.                                    |  |                              |          |                |  |             |          |              |  |     |         |              |  |   | 5.8       |  
|Interest expense                                                      |  |                              | (947.0    | )              |  |             | (951.2    | )            |  |     | 644.1    |              |  |   | (1,240.8  | )
|Interest expense  NTL Europe, Inc.                                   |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Share of (losses) from equity
investments                             |  |                              | (8.9      | )              |  |             | (23.2     | )            |  |     | 12,052.9 |              |  |   | (23.2     | )
|Other (losses)                                                        |  |                              | (88.5     | )              |  |             | (88.5     | )            |  |     |         |              |  |   | (88.5     | )
|Foreign currency transaction gains
(losses)                           |  |                              | (53.2     | )              |  |             | (56.8     | )            |  |     |         |              |  |   | 0.6       |  
|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|(Loss) before income taxes                                            |  |                              | (11,394.9 | )              |  |             | (11,414.7 | )            |  |     | 12,508.6 |              |  |   | (11,718.9 | )
|Income tax expense                                                    |  |                              | (116.9    | )              |  |             | (116.9    | )            |  |     |         |              |  |   | (118.1    | )
|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  
|Net (loss)                                                            |  | $                            | (11,511.8 | )              |  | $           | (11,531.6 | )            |  | $   | 12,508.6 |              |  | $ | (11,837.0 | )
|                                                                      |  |                              |           |                |  |             |           |              |  |     |          |              |  |   |           |  

F-160



---



##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

21.   Summarized Financial Information about NTL Incorporated (formerly NTL
Communications Corp.) (continued)



|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|-------------------------------------------------------------------------------------- |  | ---------------------------- | -------- | ------- |  | -------------- | - | -------------- |  | ----------- | ------ | ----- |  | - | -------- | - |  | - | ----- | -
|                                                                                       |  | Year Ended December 31, 2000
|                                                                                       |  |                             
|                                                                                       |  |                              |          |         |  | Communications |   |                |  |             |        |       |  |   |          |   |  |  
|                                                                                       |  | NTL                          |          | Cable   |  |                |   |                |  | Entities in |        | Other
|Statement of Operations                                                                |  | Incorporated                 |          | Funding |  | Diamond        |   | Reorganization |  | Guarantors 
|                                                                                       |  |                              |          |         |  |                |   |                |  |            
|                                                                                       |  | (in millions)               
|Revenue                                                                                |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|Consumer telecommunications and
television                                             |  | $                            |         |         |  | $              |  |                |  | $           |       |       |  | $ |         |   |  | $ |      |  
|Business telecommunications                                                            |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Broadcast transmission and other                                                       |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|                                                                                       |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Costs and expenses                                                                     |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|Operating expenses (exclusive of
depreciation and amortization
shown separately below) |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Selling, general and
administrative expenses                                           |  |                              | 5.9      |         |  |                |  |                |  |             |       |       |  |   | 5.9      |   |  |   | 0.4   |  
|Asset impairments                                                                      |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Non-cash compensation                                                                  |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Other charges                                                                          |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Corporate expenses                                                                     |  |                              | 23.7     |         |  |                |  |                |  |             |       |       |  |   | 23.7     |   |  |   |      |  
|Depreciation                                                                           |  |                              | 0.5      |         |  |                |  |                |  |             |       |       |  |   | 0.5      |   |  |   |      |  
|Amortization                                                                           |  |                              | 19.2     |         |  |                |  |                |  |             | 4.0    |       |  |   | 23.2     |   |  |   | 0.5   |  
|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|                                                                                       |  |                              | 49.3     |         |  |                |  |                |  |             | 4.0    |       |  |   | 53.3     |   |  |   | 0.9   |  
|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|Operating (loss)                                                                       |  |                              | (49.3    | )       |  |                |  |                |  |             | (4.0   | )     |  |   | (53.3    | ) |  |   | (0.9  | )
|Other income (expense)                                                                 |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|Interest income and other, net                                                         |  |                              | 14.5     |         |  |                |  |                |  |             | 174.9  |       |  |   | 189.4    |   |  |   | (0.6  | )
|Interest income  NTL Europe, Inc.                                                     |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Interest expense                                                                       |  |                              | (599.4   | )       |  |                |  |                |  |             | (163.6 | )     |  |   | (763.0   | ) |  |   | (0.3  | )
|Interest expense  NTL Europe,
Inc.                                                    |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Share of (losses) from equity
investments                                              |  |                              | (1,821.7 | )       |  |                |  |                |  |             | (444.5 | )     |  |   | (2,266.2 | ) |  |   | (22.9 | )
|Other (losses)                                                                         |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|Foreign currency transaction
gains (losses)                                            |  |                              | 67.8     |         |  |                |  |                |  |             | (3.6   | )     |  |   | 64.2     |   |  |   | 3.7   |  
|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|(Loss) before income taxes                                                             |  |                              | (2,388.1 | )       |  |                |  |                |  |             | (440.8 | )     |  |   | (2,828.9 | ) |  |   | (21.0 | )
|Income tax benefit                                                                     |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |      |  
|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  
|Net (loss)                                                                             |  | $                            | (2,388.1 | )       |  | $              |  |                |  | $           | (440.8 | )     |  | $ | (2,828.9 | ) |  | $ | (21.0 | )
|                                                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|-------------------------------------------------------------------------------------- |  | ---------------------------- | -------- | -------------- |  | ----------- | -------- | ------------ |  | --- | ------- | ------------ |  | - | -------- | -
|                                                                                       |  | Year Ended December 31, 2000
|                                                                                       |  |                             
|                                                                                       |  |                              |          |                |  | Entities    |          |              |  |     |         | Consolidated
|                                                                                       |  | All Other                    |          | Not in         |  |             |          |              |  | NTL
|Statement of Operations                                                                |  | Subsidiaries                 |          | Reorganization |  | Adjustments |          | Incorporated
|                                                                                       |  |                              |          |                |  |             |          |             
|                                                                                       |  | (in millions)               
|Revenue                                                                                |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Consumer telecommunications and
television                                             |  | $                            | 1,518.2  |                |  | $           | 1,518.2  |              |  | $   |        |              |  | $ | 1,518.2  |  
|Business telecommunications                                                            |  |                              | 702.2    |                |  |             | 702.2    |              |  |     |        |              |  |   | 702.2    |  
|Broadcast transmission and other                                                       |  |                              | 263.8    |                |  |             | 263.8    |              |  |     |        |              |  |   | 263.8    |  
|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|                                                                                       |  |                              | 2,484.2  |                |  |             | 2,484.2  |              |  |     |        |              |  |   | 2,484.2  |  
|Costs and expenses                                                                     |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Operating expenses (exclusive of
depreciation and amortization
shown separately below) |  |                              | 1,223.2  |                |  |             | 1,223.2  |              |  |     |        |              |  |   | 1,223.2  |  
|Selling, general and
administrative expenses                                           |  |                              | 962.8    |                |  |             | 963.2    |              |  |     |        |              |  |   | 969.1    |  
|Asset impairments                                                                      |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Non-cash compensation                                                                  |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Other charges                                                                          |  |                              | 92.7     |                |  |             | 92.7     |              |  |     |        |              |  |   | 92.7     |  
|Corporate expenses                                                                     |  |                              |         |                |  |             |         |              |  |     |        |              |  |   | 23.7     |  
|Depreciation                                                                           |  |                              | 873.9    |                |  |             | 873.9    |              |  |     |        |              |  |   | 874.4    |  
|Amortization                                                                           |  |                              | 802.6    |                |  |             | 803.1    |              |  |     |        |              |  |   | 826.3    |  
|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|                                                                                       |  |                              | 3,955.2  |                |  |             | 3,956.1  |              |  |     |        |              |  |   | 4,009.4  |  
|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Operating (loss)                                                                       |  |                              | (1,471.0 | )              |  |             | (1,471.9 | )            |  |     |        |              |  |   | (1,525.2 | )
|Other income (expense)                                                                 |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Interest income and other, net                                                         |  |                              | 11.2     |                |  |             | 10.6     |              |  |     | (174.2  | )            |  |   | 25.8     |  
|Interest income  NTL Europe, Inc.                                                     |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Interest expense                                                                       |  |                              | (320.9   | )              |  |             | (321.2   | )            |  |     | 197.9   |              |  |   | (886.3   | )
|Interest expense  NTL Europe,
Inc.                                                    |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Share of (losses) from equity
investments                                              |  |                              | (1.3     | )              |  |             | (24.2    | )            |  |     | 2,266.2 |              |  |   | (24.2    | )
|Other (losses)                                                                         |  |                              |         |                |  |             |         |              |  |     |        |              |  |   |         |  
|Foreign currency transaction
gains (losses)                                            |  |                              | (126.0   | )              |  |             | (122.3   | )            |  |     |        |              |  |   | (58.1    | )
|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|(Loss) before income taxes                                                             |  |                              | (1,908.0 | )              |  |             | (1,929.0 | )            |  |     | 2,289.9 |              |  |   | (2,468.0 | )
|Income tax benefit                                                                     |  |                              | 79.9     |                |  |             | 79.9     |              |  |     |        |              |  |   | 79.9     |  
|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Net (loss)                                                                             |  | $                            | (1,828.1 | )              |  | $           | (1,849.1 | )            |  | $   | 2,289.9 |              |  | $ | (2,388.1 | )
|                                                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  

F-161



---



##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

21.   Summarized Financial Information about NTL Incorporated (formerly NTL
Communications Corp.) (continued)



|                                                        |  |                   |          |         |  |                |          |                |  |             |         |       |  |   |          |  |  |   |       |  
|------------------------------------------------------- |  | ----------------- | -------- | ------- |  | -------------- | -------- | -------------- |  | ----------- | ------- | ----- |  | - | -------- |  |  | - | ----- | -
|                                                        |  | December 31, 2002
|                                                        |  |                  
|                                                        |  |                   |          |         |  | Communications |          |                |  |             |         |       |  |   |          |  |  |  
|                                                        |  | NTL               |          | Cable   |  |                |          |                |  | Entities in |         | Other
|Balance Sheet                                           |  | Incorporated      |          | Funding |  | Diamond        |          | Reorganization |  | Guarantors 
|                                                        |  |                   |          |         |  |                |          |                |  |            
|                                                        |  | (in millions)    
|Current assets                                          |  | $                 | 47.4     |         |  | $              | 454.3    |                |  | $           | 0.8     |       |  | $ | 502.5    |  |  | $ | 2.5   |  
|Investments in and loans to
affiliates, net             |  |                   | 3,413.9  |         |  |                | 18,645.8 |                |  |             | 941.5   |       |  |   | 23,001.2 |  |  |   | 8.4   |  
|Fixed and noncurrent assets                             |  |                   | 128.7    |         |  |                | 162.8    |                |  |             | 15.6    |       |  |   | 307.1    |  |  |   | 102.2 |  
|                                                        |  |                   |          |         |  |                |          |                |  |             |         |       |  |   |          |  |  |   |       |  
|Total assets                                            |  | $                 | 3,590.0  |         |  | $              | 19,262.9 |                |  | $           | 957.9   |       |  | $ | 23,810.8 |  |  | $ | 113.1 |  
|                                                        |  |                   |          |         |  |                |          |                |  |             |         |       |  |   |          |  |  |   |       |  
|Current liabilities                                     |  | $                 | 245.8    |         |  | $              | 122.6    |                |  | $           |        |       |  | $ | 368.4    |  |  | $ | 0.4   |  
|Noncurrent liabilities                                  |  |                   |         |         |  |                | 2,784.3  |                |  |             | 1.5     |       |  |   | 2,785.8  |  |  |   | 135.2 |  
|Liabilities subject to compromise                       |  |                   | 8,520.3  |         |  |                |         |                |  |             | 1,656.9 |       |  |   | 10,177.2 |  |  |   |      |  
|Shareholders (deficiency) equity                       |  |                   | (5,176.1 | )       |  |                | 16,356.0 |                |  |             | (700.5  | )     |  |   | 10,479.4 |  |  |   | (22.5 | )
|                                                        |  |                   |          |         |  |                |          |                |  |             |         |       |  |   |          |  |  |   |       |  
|Total liabilities and
shareholders (deficiency)
equity |  | $                 | 3,590.0  |         |  | $              | 19,262.9 |                |  | $           | 957.9   |       |  | $ | 23,810.8 |  |  | $ | 113.1 |  
|                                                        |  |                   |          |         |  |                |          |                |  |             |         |       |  |   |          |  |  |   |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                        |  |                   |          |                |  |             |          |              |  |     |           |              |  |   |          |  
|------------------------------------------------------- |  | ----------------- | -------- | -------------- |  | ----------- | -------- | ------------ |  | --- | --------- | ------------ |  | - | -------- | -
|                                                        |  | December 31, 2002
|                                                        |  |                  
|                                                        |  |                   |          |                |  | Entities    |          |              |  |     |           | Consolidated
|                                                        |  | All Other         |          | Not in         |  |             |          |              |  | NTL
|Balance Sheet                                           |  | Subsidiaries      |          | Reorganization |  | Adjustments |          | Incorporated
|                                                        |  |                   |          |                |  |             |          |             
|                                                        |  | (in millions)    
|Current assets                                          |  | $                 | 1,032.9  |                |  | $           | 1,035.4  |              |  | $   | (367.2    | )            |  | $ | 1,170.7  |  
|Investments in and loans to
affiliates, net             |  |                   |         |                |  |             | 8.4      |              |  |     | (23,001.2 | )            |  |   | 8.4      |  
|Fixed and noncurrent assets                             |  |                   | 11,555.0 |                |  |             | 11,657.2 |              |  |     | (102.0    | )            |  |   | 11,862.3 |  
|                                                        |  |                   |          |                |  |             |          |              |  |     |           |              |  |   |          |  
|Total assets                                            |  | $                 | 12,587.9 |                |  | $           | 12,701.0 |              |  | $   | (23,470.4 | )            |  | $ | 13,041.4 |  
|                                                        |  |                   |          |                |  |             |          |              |  |     |           |              |  |   |          |  
|Current liabilities                                     |  | $                 | 1,823.7  |                |  | $           | 1,824.1  |              |  | $   | 5,772.8   |              |  | $ | 7,965.3  |  
|Noncurrent liabilities                                  |  |                   | 12,804.7 |                |  |             | 12,939.9 |              |  |     | (15,631.3 | )            |  |   | 94.4     |  
|Liabilities subject to compromise                       |  |                   |         |                |  |             |         |              |  |     | (19.4     | )            |  |   | 10,157.8 |  
|Shareholders (deficiency) equity                       |  |                   | (2,040.5 | )              |  |             | (2,063.0 | )            |  |     | (13,592.5 | )            |  |   | (5,176.1 | )
|                                                        |  |                   |          |                |  |             |          |              |  |     |           |              |  |   |          |  
|Total liabilities and
shareholders (deficiency)
equity |  | $                 | 12,587.9 |                |  | $           | 12,701.0 |              |  | $   | (23,470.4 | )            |  | $ | 13,041.4 |  
|                                                        |  |                   |          |                |  |             |          |              |  |     |           |              |  |   |          |  



|                                                 |  |                   |          |         |  |                |   |                |  |             |         |       |  |   |          |   |  |   |       |  
|------------------------------------------------ |  | ----------------- | -------- | ------- |  | -------------- | - | -------------- |  | ----------- | ------- | ----- |  | - | -------- | - |  | - | ----- | -
|                                                 |  | December 31, 2001
|                                                 |  |                  
|                                                 |  |                   |          |         |  | Communications |   |                |  |             |         |       |  |   |          |   |  |  
|                                                 |  | NTL               |          | Cable   |  |                |   |                |  | Entities in |         | Other
|Balance Sheet                                    |  | Incorporated      |          | Funding |  | Diamond        |   | Reorganization |  | Guarantors 
|                                                 |  |                   |          |         |  |                |   |                |  |            
|                                                 |  | (in millions)    
|Current assets                                   |  | $                 | 90.0     |         |  | $              |  |                |  | $           | 0.4     |       |  | $ | 90.4     |   |  | $ | 1.9   |  
|Investments in and loans to
affiliates, net      |  |                   | 4,462.6  |         |  |                |  |                |  |             | 1,061.0 |       |  |   | 5,523.6  |   |  |   | 4.4   |  
|Fixed and noncurrent assets                      |  |                   | 305.4    |         |  |                |  |                |  |             | 18.2    |       |  |   | 323.6    |   |  |   | 98.3  |  
|                                                 |  |                   |          |         |  |                |   |                |  |             |         |       |  |   |          |   |  |   |       |  
|Total assets                                     |  | $                 | 4,858.0  |         |  | $              |  |                |  | $           | 1,079.6 |       |  | $ | 5,937.6  |   |  | $ | 104.6 |  
|                                                 |  |                   |          |         |  |                |   |                |  |             |         |       |  |   |          |   |  |   |       |  
|Current liabilities                              |  | $                 | 8,037.0  |         |  | $              |  |                |  | $           | 1,561.8 |       |  | $ | 9,598.8  |   |  | $ | 0.2   |  
|Noncurrent liabilities                           |  |                   |         |         |  |                |  |                |  |             |        |       |  |   |         |   |  |   | 124.2 |  
|Shareholders (deficiency)                       |  |                   | (3,179.0 | )       |  |                |   |                |  |             | (482.2  | )     |  |   | (3,661.2 | ) |  |   | (19.8 | )
|                                                 |  |                   |          |         |  |                |   |                |  |             |         |       |  |   |          |   |  |   |       |  
|Total liabilities and
shareholders (deficiency) |  | $                 | 4,858.0  |         |  | $              |  |                |  | $           | 1,079.6 |       |  | $ | 5,937.6  |   |  | $ | 104.6 |  
|                                                 |  |                   |          |         |  |                |   |                |  |             |         |       |  |   |          |   |  |   |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                 |  |                   |          |                |  |             |          |              |  |     |          |              |  |   |          |  
|------------------------------------------------ |  | ----------------- | -------- | -------------- |  | ----------- | -------- | ------------ |  | --- | -------- | ------------ |  | - | -------- | -
|                                                 |  | December 31, 2001
|                                                 |  |                  
|                                                 |  |                   |          |                |  | Entities    |          |              |  |     |          | Consolidated
|                                                 |  | All Other         |          | Not in         |  |             |          |              |  | NTL
|Balance Sheet                                    |  | Subsidiaries      |          | Reorganization |  | Adjustments |          | Incorporated
|                                                 |  |                   |          |                |  |             |          |             
|                                                 |  | (in millions)    
|Current assets                                   |  | $                 | 924.0    |                |  | $           | 925.9    |              |  | $   | (3.3     | )            |  | $ | 1,013.0  |  
|Investments in and loans to
affiliates, net      |  |                   |         |                |  |             | 4.4      |              |  |     | (5,523.6 | )            |  |   | 4.4      |  
|Fixed and noncurrent assets                      |  |                   | 11,689.4 |                |  |             | 11,787.7 |              |  |     | (98.3    | )            |  |   | 12,013.0 |  
|                                                 |  |                   |          |                |  |             |          |              |  |     |          |              |  |   |          |  
|Total assets                                     |  | $                 | 12,613.4 |                |  | $           | 12,718.0 |              |  | $   | (5,625.2 | )            |  | $ | 13,030.4 |  
|                                                 |  |                   |          |                |  |             |          |              |  |     |          |              |  |   |          |  
|Current liabilities                              |  | $                 | 6,587.8  |                |  | $           | 6,588.0  |              |  | $   | (100.1   | )            |  | $ | 16,086.7 |  
|Noncurrent liabilities                           |  |                   | 6,036.5  |                |  |             | 6,160.7  |              |  |     | (6,038.0 | )            |  |   | 122.7    |  
|Shareholders (deficiency)                       |  |                   | (10.9    | )              |  |             | (30.7    | )            |  |     | 512.9    |              |  |   | (3,179.0 | )
|                                                 |  |                   |          |                |  |             |          |              |  |     |          |              |  |   |          |  
|Total liabilities and
shareholders (deficiency) |  | $                 | 12,613.4 |                |  | $           | 12,718.0 |              |  | $   | (5,625.2 | )            |  | $ | 13,030.4 |  
|                                                 |  |                   |          |                |  |             |          |              |  |     |          |              |  |   |          |  

F-162



---



##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

21.   Summarized Financial Information about NTL Incorporated (formerly NTL
Communications Corp.) (continued)



|                                                       |  |                              |       |         |  |                |        |                |  |             |       |       |  |   |        |   |  |   |      |  
|------------------------------------------------------ |  | ---------------------------- | ----- | ------- |  | -------------- | ------ | -------------- |  | ----------- | ----- | ----- |  | - | ------ | - |  | - | ---- | -
|                                                       |  | Year Ended December 31, 2002
|                                                       |  |                             
|                                                       |  |                              |       |         |  | Communications |        |                |  |             |       |       |  |   |        |   |  |  
|                                                       |  | NTL                          |       | Cable   |  |                |        |                |  | Entities in |       | Other
|Statement of Cash Flows                                |  | Incorporated                 |       | Funding |  | Diamond        |        | Reorganization |  | Guarantors 
|                                                       |  |                              |       |         |  |                |        |                |  |            
|                                                       |  | (in millions)               
|Net cash provided by
(used in) operating
activities    |  | $                            | 52.9  |         |  | $              | (33.7  | )              |  | $           | (36.6 | )     |  | $ | (17.4  | ) |  | $ | 6.3  |  
|Net cash (used in)
investing activities                |  |                              | (99.1 | )       |  |                | (162.8 | )              |  |             | 16.3  |       |  |   | (245.6 | ) |  |   | (6.2 | )
|Net cash provided by
financing activities              |  |                              | 3.9   |         |  |                | 216.4  |                |  |             | 20.1  |       |  |   | 240.4  |   |  |   |     |  
|Effect of exchange
rate changes on cash                |  |                              |      |         |  |                |       |                |  |             |      |       |  |   |       |   |  |   |     |  
|                                                       |  |                              |       |         |  |                |        |                |  |             |       |       |  |   |        |   |  |   |      |  
|(Decrease) increase in
cash and cash
equivalents       |  |                              | (42.3 | )       |  |                | 19.9   |                |  |             | (0.2  | )     |  |   | (22.6  | ) |  |   | 0.1  |  
|Cash and cash
equivalents at the
beginning of the year |  |                              | 78.5  |         |  |                |       |                |  |             | 0.4   |       |  |   | 78.9   |   |  |   | 0.1  |  
|                                                       |  |                              |       |         |  |                |        |                |  |             |       |       |  |   |        |   |  |   |      |  
|Cash and cash
equivalents at the end
of the year       |  | $                            | 36.2  |         |  | $              | 19.9   |                |  | $           | 0.2   |       |  | $ | 56.3   |   |  | $ | 0.2  |  
|                                                       |  |                              |       |         |  |                |        |                |  |             |       |       |  |   |        |   |  |   |      |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                       |  |                              |        |                |  |             |        |              |  |     |       |              |  |   |        |  
|------------------------------------------------------ |  | ---------------------------- | ------ | -------------- |  | ----------- | ------ | ------------ |  | --- | ----- | ------------ |  | - | ------ | -
|                                                       |  | Year Ended December 31, 2002
|                                                       |  |                             
|                                                       |  |                              |        |                |  | Entities    |        |              |  |     |       | Consolidated
|                                                       |  | All Other                    |        | Not in         |  |             |        |              |  | NTL
|Statement of Cash Flows                                |  | Subsidiaries                 |        | Reorganization |  | Adjustments |        | Incorporated
|                                                       |  |                              |        |                |  |             |        |             
|                                                       |  | (in millions)               
|Net cash provided by
(used in) operating
activities    |  | $                            | 326.8  |                |  | $           | 333.1  |              |  | $   | (57.0 | )            |  | $ | 258.7  |  
|Net cash (used in)
investing activities                |  |                              | (669.4 | )              |  |             | (675.6 | )            |  |     | 77.0  |              |  |   | (844.2 | )
|Net cash provided by
financing activities              |  |                              | 580.2  |                |  |             | 580.2  |              |  |     | (20.0 | )            |  |   | 800.6  |  
|Effect of exchange
rate changes on cash                |  |                              | 35.8   |                |  |             | 35.8   |              |  |     |      |              |  |   | 35.8   |  
|                                                       |  |                              |        |                |  |             |        |              |  |     |       |              |  |   |        |  
|(Decrease) increase in
cash and cash
equivalents       |  |                              | 273.4  |                |  |             | 273.5  |              |  |     |      |              |  |   | 250.9  |  
|Cash and cash
equivalents at the
beginning of the year |  |                              | 172.1  |                |  |             | 172.2  |              |  |     |      |              |  |   | 251.1  |  
|                                                       |  |                              |        |                |  |             |        |              |  |     |       |              |  |   |        |  
|Cash and cash
equivalents at the end
of the year       |  | $                            | 445.5  |                |  | $           | 445.7  |              |  | $   |      |              |  | $ | 502.0  |  
|                                                       |  |                              |        |                |  |             |        |              |  |     |       |              |  |   |        |  



|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  
|------------------------------------------------------ |  | ---------------------------- | -------- | ------- |  | -------------- | - | -------------- |  | ----------- | ------ | ----- |  | - | -------- | - |  | - | ---- | -
|                                                       |  | Year Ended December 31, 2001
|                                                       |  |                             
|                                                       |  |                              |          |         |  | Communications |   |                |  |             |        |       |  |   |          |   |  |  
|                                                       |  | NTL                          |          | Cable   |  |                |   |                |  | Entities in |        | Other
|Statement of Cash Flows                                |  | Incorporated                 |          | Funding |  | Diamond        |   | Reorganization |  | Guarantors 
|                                                       |  |                              |          |         |  |                |   |                |  |            
|                                                       |  | (in millions)               
|Net cash (used in)
provided by operating
activities    |  | $                            | (406.7   | )       |  | $              |  |                |  | $           | (55.4  | )     |  | $ | (462.1   | ) |  | $ | 3.2  |  
|Net cash (used in)
investing activities                |  |                              | (1,099.1 | )       |  |                |  |                |  |             | (201.3 | )     |  |   | (1,300.4 | ) |  |   | (4.2 | )
|Net cash provided by
financing activities              |  |                              | 1,416.1  |         |  |                |  |                |  |             | 256.6  |       |  |   | 1,672.7  |   |  |   |     |  
|Effect of exchange
rate changes on cash                |  |                              |         |         |  |                |  |                |  |             |       |       |  |   |         |   |  |   |     |  
|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  
|(Decrease) in cash and
cash equivalents                |  |                              | (89.7    | )       |  |                |  |                |  |             | (0.1   | )     |  |   | (89.8    | ) |  |   | (1.0 | )
|Cash and cash
equivalents at the
beginning of the year |  |                              | 168.2    |         |  |                |  |                |  |             | 0.5    |       |  |   | 168.7    |   |  |   | 1.1  |  
|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  
|Cash and cash
equivalents at the end
of the year       |  | $                            | 78.5     |         |  | $              |  |                |  | $           | 0.4    |       |  | $ | 78.9     |   |  | $ | 0.1  |  
|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|------------------------------------------------------ |  | ---------------------------- | -------- | -------------- |  | ----------- | -------- | ------------ |  | --- | ------- | ------------ |  | - | -------- | -
|                                                       |  | Year Ended December 31, 2001
|                                                       |  |                             
|                                                       |  |                              |          |                |  | Entities    |          |              |  |     |         | Consolidated
|                                                       |  | All Other                    |          | Not in         |  |             |          |              |  | NTL
|Statement of Cash Flows                                |  | Subsidiaries                 |          | Reorganization |  | Adjustments |          | Incorporated
|                                                       |  |                              |          |                |  |             |          |             
|                                                       |  | (in millions)               
|Net cash (used in)
provided by operating
activities    |  | $                            | 786.8    |                |  | $           | 790.0    |              |  | $   | (886.5  | )            |  | $ | (558.6   | )
|Net cash (used in)
investing activities                |  |                              | (1,695.3 | )              |  |             | (1,699.5 | )            |  |     | 1,141.8 |              |  |   | (1,858.1 | )
|Net cash provided by
financing activities              |  |                              | 834.7    |                |  |             | 834.7    |              |  |     | (255.3  | )            |  |   | 2,252.1  |  
|Effect of exchange
rate changes on cash                |  |                              | (7.8     | )              |  |             | (7.8     | )            |  |     |        |              |  |   | (7.8     | )
|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|(Decrease) in cash and
cash equivalents                |  |                              | (81.6    | )              |  |             | (82.6    | )            |  |     |        |              |  |   | (172.4   | )
|Cash and cash
equivalents at the
beginning of the year |  |                              | 253.7    |                |  |             | 254.8    |              |  |     |        |              |  |   | 423.5    |  
|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Cash and cash
equivalents at the end
of the year       |  | $                            | 172.1    |                |  | $           | 172.2    |              |  | $   |        |              |  | $ | 251.1    |  
|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  

F-163



---



##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

21.   Summarized Financial Information about NTL Incorporated (formerly NTL
Communications Corp.) (continued)



|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  
|------------------------------------------------------ |  | ---------------------------- | -------- | ------- |  | -------------- | - | -------------- |  | ----------- | ------ | ----- |  | - | -------- | - |  | - | ---- | -
|                                                       |  | Year Ended December 31, 2000
|                                                       |  |                             
|                                                       |  |                              |          |         |  | Communications |   |                |  |             |        |       |  |   |          |   |  |  
|                                                       |  | NTL                          |          | Cable   |  |                |   |                |  | Entities in |        | Other
|Statement of Cash Flows                                |  | Incorporated                 |          | Funding |  | Diamond        |   | Reorganization |  | Guarantors 
|                                                       |  |                              |          |         |  |                |   |                |  |            
|                                                       |  | (in millions)               
|Net cash (used in)
provided by operating
activities    |  | $                            | (301.7   | )       |  | $              |  |                |  | $           | (88.1  | )     |  | $ | (389.8   | ) |  | $ | 3.8  |  
|Net cash (used in)
investing activities                |  |                              | (5,940.8 | )       |  |                |  |                |  |             | (103.1 | )     |  |   | (6,043.9 | ) |  |   | (3.2 | )
|Net cash provided by
financing activities              |  |                              | 5,707.3  |         |  |                |  |                |  |             | 7.0    |       |  |   | 5,714.3  |   |  |   |     |  
|Effect of exchange
rate changes on cash                |  |                              |         |         |  |                |  |                |  |             | (12.2  | )     |  |   | (12.2    | ) |  |   |     |  
|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  
|(Decrease) increase in
cash and cash
equivalents       |  |                              | (535.2   | )       |  |                |  |                |  |             | (196.4 | )     |  |   | (731.6   | ) |  |   | 0.6  |  
|Cash and cash
equivalents at the
beginning of the year |  |                              | 703.4    |         |  |                |  |                |  |             | 196.9  |       |  |   | 900.3    |   |  |   | 0.5  |  
|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  
|Cash and cash
equivalents at the end
of the year       |  | $                            | 168.2    |         |  | $              |  |                |  | $           | 0.5    |       |  | $ | 168.7    |   |  | $ | 1.1  |  
|                                                       |  |                              |          |         |  |                |   |                |  |             |        |       |  |   |          |   |  |   |      |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|------------------------------------------------------ |  | ---------------------------- | -------- | -------------- |  | ----------- | -------- | ------------ |  | --- | ------- | ------------ |  | - | -------- | -
|                                                       |  | Year Ended December 31, 2000
|                                                       |  |                             
|                                                       |  |                              |          |                |  | Entities    |          |              |  |     |         | Consolidated
|                                                       |  | All Other                    |          | Not in         |  |             |          |              |  | NTL
|Statement of Cash Flows                                |  | Subsidiaries                 |          | Reorganization |  | Adjustments |          | Incorporated
|                                                       |  |                              |          |                |  |             |          |             
|                                                       |  | (in millions)               
|Net cash (used in)
provided by operating
activities    |  | $                            | 1,006.6  |                |  | $           | 1,010.4  |              |  | $   | (789.6  | )            |  | $ | (169.0   | )
|Net cash (used in)
investing activities                |  |                              | (5,191.3 | )              |  |             | (5,194.5 | )            |  |     | 1,731.7 |              |  |   | (9,506.7 | )
|Net cash provided by
financing activities              |  |                              | 4,278.4  |                |  |             | 4,278.4  |              |  |     | (942.1  | )            |  |   | 9,050.6  |  
|Effect of exchange
rate changes on cash                |  |                              | (13.4    | )              |  |             | (13.4    | )            |  |     |        |              |  |   | (25.6    | )
|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|(Decrease) increase in
cash and cash
equivalents       |  |                              | 80.3     |                |  |             | 80.9     |              |  |     |        |              |  |   | (650.7   | )
|Cash and cash
equivalents at the
beginning of the year |  |                              | 173.4    |                |  |             | 173.9    |              |  |     |        |              |  |   | 1,074.2  |  
|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  
|Cash and cash
equivalents at the end
of the year       |  | $                            | 253.7    |                |  | $           | 254.8    |              |  | $   |        |              |  | $ | 423.5    |  
|                                                       |  |                              |          |                |  |             |          |              |  |     |         |              |  |   |          |  

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

22.   Industry Segments

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

The accounting policies of the segments are the same as those described in the
Significant Accounting Policies note. The Companys management evaluates
segment performance based on various financial and non-financial measurements.
The Companys primary measure of profit or loss is Operating EBITDA. The
results of operations data utilized in financial measurements are revenues and
Operating EBITDA, which is earnings before interest, taxes, depreciation,
amortization, asset impairments, non-cash compensation, other charges,
corporate expenses, share of (losses) from equity investments, other (losses),
foreign currency transaction (losses) gains and recapitalization items, net.
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.

The Companys primary measure of profit or loss for each reportable segment is
Operating EBITDA as defined above. The Company considers Operating EBITDA an
important indicator of the operational strength and performance of its
reportable segments, including the ability to provide cash flows to service
debt and fund capital expenditures. Operating EBITDA excludes the impact of
costs and expenses that do not directly effect cash flows such as depreciation,
amortization, asset impairments, non-cash compensation and share of (losses)
from equity investments. The Company also excludes costs and expenses that are
not directly related to the performance of a single reportable segment from
Operating EBITDA rather than allocate these costs and expenses to multiple
reportable segments. Other charges, corporate expenses, and foreign currency
transactions are not directly related to a single segment. Operating EBITDA
should be considered in addition to, not as a substitute for, operating (loss),
net (loss) and other measures of financial performance reported in accordance
with generally accepted accounting principles.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

22.   Industry Segments (continued)

|                                   |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|---------------------------------- |  | ------------- | ----- | -------- |  | -------- | -------- | ------ |  | ----- | ------- |  |  | - | ------- | - |  | - | -------- | 
|                                   |  | Broadcast     |       | Consumer |  | Business |          | Shared |  | Total
|                                   |  |               |       |          |  |          |          |        |  |      
|                                   |  | (in millions)
|Year ended December 31, 2002       |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 310.9 |          |  | $        | 2,074.1  |        |  | $     | 880.1   |  |  | $ |        |   |  | $ | 3,265.1  | 
|Depreciation and amortization      |  |               | 73.0  |          |  |          | 1,025.3  |        |  |       | 416.6   |  |  |   | 26.7    |   |  |   | 1,541.6  | 
|Operating EBITDA (1)               |  |               | 165.5 |          |  |          | 839.3    |        |  |       | 332.1   |  |  |   | (344.1  | ) |  |   | 992.8    | 
|Expenditures for long-lived assets |  |               | 64.2  |          |  |          | 485.3    |        |  |       | 141.4   |  |  |   | 185.0   |   |  |   | 875.9    | 
|Total assets (2)                   |  |               | 527.3 |          |  |          | 7,993.4  |        |  |       | 3,367.3 |  |  |   | 1,153.4 |   |  |   | 13,041.4 | 
|Year ended December 31, 2001       |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 283.6 |          |  | $        | 2,069.2  |        |  | $     | 836.8   |  |  | $ |        |   |  | $ | 3,189.6  | 
|Depreciation and amortization      |  |               | 76.0  |          |  |          | 1,840.5  |        |  |       | 587.9   |  |  |   | 35.9    |   |  |   | 2,540.3  | 
|Operating EBITDA (1)               |  |               | 143.9 |          |  |          | 738.7    |        |  |       | 335.2   |  |  |   | (565.7  | ) |  |   | 652.1    | 
|Expenditures for long-lived assets |  |               | 131.8 |          |  |          | 1,151.3  |        |  |       | 321.5   |  |  |   | 43.8    |   |  |   | 1,648.4  | 
|Total assets (3)                   |  |               | 792.5 |          |  |          | 8,012.3  |        |  |       | 3,287.0 |  |  |   | 938.6   |   |  |   | 13,030.4 | 
|Year ended December 31, 2000       |  |               |       |          |  |          |          |        |  |       |         |  |  |   |         |   |  |   |          | 
|Revenues                           |  | $             | 263.8 |          |  | $        | 1,518.2  |        |  | $     | 702.2   |  |  | $ |        |   |  | $ | 2,484.2  | 
|Depreciation and amortization      |  |               | 53.2  |          |  |          | 1,443.6  |        |  |       | 184.2   |  |  |   | 19.7    |   |  |   | 1,700.7  | 
|Operating EBITDA (1)               |  |               | 130.3 |          |  |          | 410.8    |        |  |       | 232.4   |  |  |   | (481.6  | ) |  |   | 291.9    | 
|Expenditures for long-lived assets |  |               | 70.0  |          |  |          | 1,088.5  |        |  |       | 724.6   |  |  |   | 276.1   |   |  |   | 2,159.2  | 
|Total assets (4)                   |  |               | 804.8 |          |  |          | 17,910.7 |        |  |       | 3,746.0 |  |  |   | 685.0   |   |  |   | 23,146.5 | 



|(1) |  | Represents earnings before interest, taxes, depreciation,
amortization, asset impairments, non-cash compensation, other
charges, corporate expenses, share of (losses) from equity
investments, other (losses), foreign currency transaction
(losses) gains and recapitalization items, net.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | At December 31, 2002, shared assets included $458.2 million of
cash, cash equivalents and marketable securities and $695.2
million of other assets.                                                                                                                                         
|   
|(3) |  | At December 31, 2001, shared assets included $189.8 million of
cash, cash equivalents and $748.8 million of other assets.                                                                                                                                                                   
|   
|(4) |  | At December 31, 2000, shared assets included $355.0 million of
cash, cash equivalents and marketable securities and $330.0
million of other assets.                                                                                                                                         

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession) and Subsidiaries

Notes to Consolidated Financial Statements (continued)

22.   Industry Segments (continued)

The reconciliation of segment combined Operating EBITDA to (loss) before income
taxes is as follows:

|                                  |                                              |   |                         |         |      |   |           |         |   |   |          |       |  
|--------------------------------- | -------------------------------------------- | - | ----------------------- | ------- | ---- | - | --------- | ------- | - | - | -------- | ----- | -
|                                  |                                              |   | Year Ended December 31,
|                                  |                                              |   |                        
|                                  |                                              |   | 2002                    |         | 2001 |   | 2000     
|                                  |                                              |   |                         |         |      |   |          
|                                  |                                              |   | (in millions)          
|Segment combined Operating EBITDA |                                              | $ | 992.8                   |         |      | $ | 652.1     |         |   | $ | 291.9    |      
|(Add) Deduct:                     |                                              |   |                         |         |      |   |           |         |   |   |          |      
|                                  | Asset impairments                            |   |                         | 445.1   |      |   |           | 8,160.6 |   |   |          |      |  
|                                  | Non-cash compensation                        |   |                         |        |      |   |           | 30.6    |   |   |          |      |  
|                                  | Other charges                                |   |                         | 389.2   |      |   |           | 297.9   |   |   |          | 92.7  |  
|                                  | Corporate expenses                           |   |                         | 18.7    |      |   |           | 24.3    |   |   |          | 23.7  |  
|                                  | Depreciation                                 |   |                         | 1,477.9 |      |   |           | 1,361.4 |   |   |          | 874.4 |  
|                                  | Amortization                                 |   |                         | 63.7    |      |   |           | 1,178.9 |   |   |          | 826.3 |  
|                                  | Interest income and other, net               |   |                         | (21.0   | )    |   |           | (28.8   | ) |   |          | (25.8 | )
|                                  | Interest income  NTL Europe, Inc.           |   |                         | (8.8    | )    |   |           | (5.8    | ) |   |          |      |  
|                                  | Interest expense                             |   |                         | 762.5   |      |   |           | 1,240.8 |   |   |          | 886.3 |  
|                                  | Interest expense  NTL Europe, Inc.          |   |                         | 17.7    |      |   |           |        |   |   |          |      |  
|                                  | Shares of losses from equity investments     |   |                         | 3.4     |      |   |           | 23.2    |   |   |          | 24.2  |  
|                                  | Other losses                                 |   |                         |        |      |   |           | 88.5    |   |   |          |      |  
|                                  | Foreign currency transactions losses (gains) |   |                         | 94.1    |      |   |           | (0.6    | ) |   |          | 58.1  |  
|                                  | Recapitalization items, net                  |   |                         | 151.8   |      |   |           |        |   |   |          |      |  
|                                  |                                              |   |                         |         |      |   |           |         |   |   |          |      
|                                  |                                              |   | 3,394.3                 |         |      |   | 12,371.0  |         |   |   | 2,759.9  |      
|                                  |                                              |   |                         |         |      |   |           |         |   |   |          |      
|(Loss) before income taxes        |                                              | $ | (2,401.5                | )       |      | $ | (11,718.9 | )       |   | $ | (2,468.0 | )    
|                                  |                                              |   |                         |         |      |   |           |         |   |   |          |      

Geographic Information

|                  |  |               |       |         |  |         |          |       |  |   |       |  |  |   |          | 
|----------------- |  | ------------- | ----- | ------- |  | ------- | -------- | ----- |  | - | ----- |  |  | - | -------- | 
|                  |  | United        |       | United  |  |         |          |       |  |   |       | 
|                  |  | States        |       | Kingdom |  | Ireland |          | Total
|                  |  | (in millions)
|2002              |  |               |       |         |  |         |          |       |  |   |       |  |  |   |          | 
|Revenues          |  | $             |      |         |  | $       | 3,175.1  |       |  | $ | 90.0  |  |  | $ | 3,265.1  | 
|Long-lived assets |  |               | 163.6 |         |  |         | 11,569.2 |       |  |   | 137.9 |  |  |   | 11,870.7 | 
|2001              |  |               |       |         |  |         |          |       |  |   |       |  |  |   |          | 
|Revenues          |  | $             |      |         |  | $       | 3,127.3  |       |  | $ | 62.3  |  |  | $ | 3,189.6  | 
|Long-lived assets |  |               | 151.3 |         |  |         | 11,703.5 |       |  |   | 162.6 |  |  |   | 12,017.4 | 
|2000              |  |               |       |         |  |         |          |       |  |   |       |  |  |   |          | 
|Revenues          |  | $             |      |         |  | $       | 2,423.0  |       |  | $ | 61.2  |  |  | $ | 2,484.2  | 
|Long-lived assets |  |               | 1.6   |         |  |         | 21,658.5 |       |  |   | 155.4 |  |  |   | 21,815.5 | 

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##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession)
Schedule I  Condensed Financial Information of Registrant
Condensed Balance Sheets
(in millions)

|                                                                                                  |                                        |   |              |           |      |   |          |           |  
|------------------------------------------------------------------------------------------------- | -------------------------------------- | - | ------------ | --------- | ---- | - | -------- | --------- | -
|                                                                                                  |                                        |   | December 31,
|                                                                                                  |                                        |   |             
|                                                                                                  |                                        |   | 2002         |           | 2001
|                                                                                                  |                                        |   |              |           |     
|Assets                                                                                            |                                        |   |              |           |      |   |          |          
|Current assets:                                                                                   |                                        |   |              |           |      |   |          |          
|                                                                                                  | Cash and cash equivalents              |   | $            | 36.2      |      |   | $        | 78.5      |  
|                                                                                                  | Marketable securities                  |   |              | 5.2       |      |   |          |          |  
|                                                                                                  | Other                                  |   |              | 6.0       |      |   |          | 11.5      |  
|                                                                                                  |                                        |   |              |           |      |   |          |           |  
|Total current assets                                                                              |                                        |   | 47.4         |           |      |   | 90.0     |          
|Office improvements and equipment, net of accumulated
depreciation of $2.2 (2002) and $1.7 (2001) |                                        |   | 0.8          |           |      |   | 1.3      |          
|Investments in and loans to affiliates, net                                                       |                                        |   | 3,413.9      |           |      |   | 4,462.6  |          
|Deferred financing costs, net of accumulated amortization of
$102.0 (2002) and $75.9 (2001)       |                                        |   | 127.9        |           |      |   | 154.1    |          
|Note receivable from NTL Europe, Inc.                                                             |                                        |   |             |           |      |   | 150.0    |          
|                                                                                                  |                                        |   |              |           |      |   |          |           |  
|Total assets                                                                                      |                                        | $ | 3,590.0      |           |      | $ | 4,858.0  |          
|                                                                                                  |                                        |   |              |           |      |   |          |           |  
|Liabilities and shareholders (deficiency)                                                        |                                        |   |              |           |      |   |          |          
|Liabilities not subject to compromise                                                             |                                        |   |              |           |      |   |          |          
|Current liabilities                                                                               |                                        | $ | 245.8        |           |      | $ | 8,037.0  |          
|Long-term debt                                                                                    |                                        |   |             |           |      |   |         |          
|Liabilities subject to compromise                                                                 |                                        |   | 8,520.3      |           |      |   |         |          
|Shareholders (deficiency):                                                                       |                                        |   |              |           |      |   |          |          
|                                                                                                  | Common stock                           |   |              |          |      |   |          |          |  
|                                                                                                  | Additional paid-in capital             |   |              | 14,045.5  |      |   |          | 13,917.7  |  
|                                                                                                  | Accumulated other comprehensive (loss) |   |              | (653.6    | )    |   |          | (904.5    | )
|                                                                                                  | (Deficit)                              |   |              | (18,568.0 | )    |   |          | (16,192.2 | )
|                                                                                                  |                                        |   |              |           |      |   |          |           |  
|                                                                                                  |                                        |   | (5,176.1     | )         |      |   | (3,179.0 | )        
|                                                                                                  |                                        |   |              |           |      |   |          |           |  
|Total liabilities and shareholders (deficiency)                                                  |                                        | $ | 3,590.0      |           |      | $ | 4,858.0  |          
|                                                                                                  |                                        |   |              |           |      |   |          |           |  

See accompanying notes.

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##### Table of Contents



NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession)
Condensed Statements of Operations
(in millions)

|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|------------------------------------------------------------------------------------------- |  | ----------------------- | -------- | ---- |  | ---- | --------- | - |  | - | -------- | -
|                                                                                            |  | Year Ended December 31,
|                                                                                            |  |                        
|                                                                                            |  | 2002                    |          | 2001 |  | 2000
|                                                                                            |  |                         |          |      |  |     
|Cost and expenses                                                                           |  |                         |          |      |  |      |           |   |  |   |          |  
|Corporate expenses                                                                          |  | $                       | 37.9     |      |  | $    | 24.3      |   |  | $ | 23.7     |  
|General and administrative expenses                                                         |  |                         |         |      |  |      | 3.2       |   |  |   | 5.9      |  
|Non-cash compensation                                                                       |  |                         |         |      |  |      | 30.6      |   |  |   |         |  
|Other charges                                                                               |  |                         | 154.8    |      |  |      |          |   |  |   |         |  
|Depreciation                                                                                |  |                         | 0.5      |      |  |      | 0.5       |   |  |   | 0.5      |  
|Amortization                                                                                |  |                         | 26.2     |      |  |      | 24.5      |   |  |   | 19.2     |  
|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|Operating (loss)                                                                            |  |                         | (219.4   | )    |  |      | (83.1     | ) |  |   | (49.3    | )
|Other income (expense)                                                                      |  |                         |          |      |  |      |           |   |  |   |          |  
|Interest income and other, net                                                              |  |                         | 0.3      |      |  |      | 13.6      |   |  |   | 14.5     |  
|Interest income  NTL Europe, Inc.                                                          |  |                         | 8.0      |      |  |      | 5.8       |   |  |   |         |  
|Interest expense (contractual interest of $831.3 (2002))                                    |  |                         | (280.3   | )    |  |      | (762.8    | ) |  |   | (599.4   | )
|Foreign currency transaction (losses) gains                                                 |  |                         | (282.0   | )    |  |      | 58.2      |   |  |   | 67.8     |  
|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) before recapitalization items, income taxes and
equity in net (loss) of subsidiaries |  |                         | (773.4   | )    |  |      | (768.3    | ) |  |   | (566.4   | )
|Recapitalization items, net                                                                 |  |                         | (86.7    | )    |  |      |          |   |  |   |         |  
|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) before income taxes and equity in net (loss) of
subsidiaries                         |  |                         | (860.1   | )    |  |      | (768.3    | ) |  |   | (566.4   | )
|Income tax benefit (expense)                                                                |  |                         | 1.2      |      |  |      | (1.2      | ) |  |   |         |  
|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|(Loss) before equity in net (loss) of subsidiaries                                          |  |                         | (858.9   | )    |  |      | (769.5    | ) |  |   | (566.4   | )
|Equity in net (loss) of subsidiaries                                                        |  |                         | (1,516.9 | )    |  |      | (11,067.5 | ) |  |   | (1,821.7 | )
|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  
|Net (loss)                                                                                  |  | $                       | (2,375.8 | )    |  | $    | (11,837.0 | ) |  | $ | (2,388.1 | )
|                                                                                            |  |                         |          |      |  |      |           |   |  |   |          |  

See accompanying notes.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession)
Condensed Statements of Cash Flows
(in millions)

|                                                                 |  |                         |       |      |  |      |          |   |  |   |          |  
|---------------------------------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | -------- | - |  | - | -------- | -
|                                                                 |  | Year Ended December 31,
|                                                                 |  |                        
|                                                                 |  | 2002                    |       | 2001 |  | 2000
|                                                                 |  |                         |       |      |  |     
|Net cash provided by (used in) operating activities              |  | $                       | 52.9  |      |  | $    | (406.7   | ) |  | $ | (301.7   | )
|Investing activities                                             |  |                         |       |      |  |      |          |   |  |   |          |  
|Purchase of office improvements and equipment                    |  |                         |      |      |  |      | (0.1     | ) |  |   | (0.5     | )
|Purchase of marketable securities                                |  |                         | (10.8 | )    |  |      | (9.9     | ) |  |   |         |  
|Proceeds from sales of marketable securities                     |  |                         | 5.6   |      |  |      | 10.0     |   |  |   | 5.0      |  
|Investments in and loans to affiliates                           |  |                         | (93.9 | )    |  |      | (949.1   | ) |  |   | (5,944.2 | )
|Increase in other assets                                         |  |                         |      |      |  |      |         |   |  |   | (1.1     | )
|Loan to NTL Incorporated                                         |  |                         |      |      |  |      | (150.0   | ) |  |   |         |  
|                                                                 |  |                         |       |      |  |      |          |   |  |   |          |  
|Net cash (used in) investing activities                          |  |                         | (99.1 | )    |  |      | (1,099.1 | ) |  |   | (5,940.8 | )
|Financing activities                                             |  |                         |       |      |  |      |          |   |  |   |          |  
|Distribution to NTL (Delaware), Inc.                             |  |                         |      |      |  |      | (10.6    | ) |  |   |         |  
|Contributions from NTL (Delaware), Inc                           |  |                         | 3.9   |      |  |      | 40.8     |   |  |   | 5,227.2  |  
|Proceeds from borrowings, net of financing costs                 |  |                         |      |      |  |      | 1,385.9  |   |  |   | 476.3    |  
|Principal payments                                               |  |                         |      |      |  |      |         |   |  |   | (73.7    | )
|Cash released from escrow for debt repayment                     |  |                         |      |      |  |      |         |   |  |   | 77.5     |  
|                                                                 |  |                         |       |      |  |      |          |   |  |   |          |  
|Net cash provided by financing activities                        |  |                         | 3.9   |      |  |      | 1,416.1  |   |  |   | 5,707.3  |  
|                                                                 |  |                         |       |      |  |      |          |   |  |   |          |  
|(Decrease) in cash and cash equivalents                          |  |                         | (42.3 | )    |  |      | (89.7    | ) |  |   | (535.2   | )
|Cash and cash equivalents at beginning of year                   |  |                         | 78.5  |      |  |      | 168.2    |   |  |   | 703.4    |  
|                                                                 |  |                         |       |      |  |      |          |   |  |   |          |  
|Cash and cash equivalents at end of year                         |  | $                       | 36.2  |      |  | $    | 78.5     |   |  | $ | 168.2    |  
|                                                                 |  |                         |       |      |  |      |          |   |  |   |          |  
|Supplemental disclosure of cash flow information                 |  |                         |       |      |  |      |          |   |  |   |          |  
|Cash paid for interest                                           |  | $                       | 96.4  |      |  | $    | 424.3    |   |  | $ | 240.2    |  
|Income taxes paid                                                |  |                         |      |      |  |      |         |   |  |   | 0.4      |  
|Supplemental schedule of non-cash financing activities           |  |                         |       |      |  |      |          |   |  |   |          |  
|Conversion of notes, net of unamortized deferred financing costs |  | $                       |      |      |  | $    | 109.5    |   |  | $ |         |  
|Contribution from NTL (Delaware), Inc                            |  |                         | 123.9 |      |  |      | 110.2    |   |  |   |         |  

See accompanying notes.

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NTL Incorporated (formerly NTL Communication Corp.) (Debtor-in-Possession)
Notes to Condensed Financial Statements

1.  Corporate Restructuring

On May 8, 2002, NTL Incorporated (then known as NTL Communications Corp.), (the
Company) NTL Europe, Inc. (then known as NTL Incorporated) and certain of the
Companys and NTL Europe, Inc.s subsidiaries filed a pre-arranged joint
reorganization plan (the Plan) under Chapter 11 of the US Bankruptcy Code.
The Companys operating subsidiaries and those of NTL Europe, Inc. were not
included in the Chapter 11 filing. The Plan became effective on January 10,
2003, at which time the Company emerged from Chapter 11 reorganization.

Pursuant to the Plan, the entity formerly known as NTL Incorporated and its
subsidiaries and affiliates were split into two separate groups, and the
Company and NTL Europe, Inc. each emerged as independent public companies. The
entity formerly known as NTL Communications Corp. was renamed NTL
Incorporated and became the holding company for the former NTL groups
principal UK and Ireland assets. Prior to consummation of the Plan, the
Company was a wholly-owned subsidiary of the entity then known as NTL
Incorporated, which, pursuant to the Plan, was renamed NTL Europe, Inc. and
which became the holding company for the former NTL groups continental
European and certain other assets. Pursuant to the Plan, all of the
outstanding securities of the Companys former ultimate parent company (NTL
Europe) and certain of its subsidiaries, including the Company, were cancelled,
and the Company issued shares of its common stock and Series A warrants and NTL
Europe, Inc. issued shares of its common stock and preferred stock to various
former creditors and stockholders of the Companys former ultimate parent
company and its subsidiaries, including the Company. The precise mix of new
securities received by holders of each particular type of security of the
Companys former ultimate parent company and its subsidiaries was set forth in
the Plan. The outstanding notes of Diamond Holding Limited and NTL (Triangle)
LLC were not canceled and remain outstanding.

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.

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NTL Incorporated (formerly NTL Communication Corp.) (Debtor-in-Possession)
Notes to Condensed Financial Statements

3.   Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

|                                |                                                         |   |               |         | 
|------------------------------- | ------------------------------------------------------- | - | ------------- | ------- | 
|                                |                                                         |   | December 31, 
|                                |                                                         |   | 2002         
|                                |                                                         |   |              
|                                |                                                         |   | (in millions)
|Accounts payable                |                                                         | $ | 0.6           |        
|Interest payable                |                                                         |   | 243.2         |        
|Payable to NTL (Delaware), Inc. |                                                         |   | 25.2          |        
|Accrued expenses                |                                                         |   | 1.0           |        
|Long-term debt                  |                                                         |   |               |        
|NTL Communications:             |                                                         |   |               |        
|                                | 12 3/4% Senior Deferred Coupon Notes                    |   |               | 277.8   | 
|                                | 11 1/2% Senior Deferred Coupon Notes                    |   |               | 1,050.0 | 
|                                | 10% Senior Notes                                        |   |               | 400.0   | 
|                                | 9 1/2% Senior Sterling Notes, less unamortized discount |   |               | 200.8   | 
|                                | 10 3/4% Senior Deferred Coupon Sterling Notes           |   |               | 439.2   | 
|                                | 9 3/4% Senior Deferred Coupon Notes                     |   |               | 1,193.3 | 
|                                | 9 3/4% Senior Deferred Coupon Sterling Notes            |   |               | 441.6   | 
|                                | 11 1/2% Senior Notes                                    |   |               | 625.0   | 
|                                | 12 3/8% Senior Deferred Coupon Notes                    |   |               | 380.6   | 
|                                | 7% Convertible Subordinated Notes                       |   |               | 489.8   | 
|                                | 9 1/4% Senior Euro Notes                                |   |               | 262.1   | 
|                                | 9 7/8% Senior Euro Notes                                |   |               | 367.0   | 
|                                | 11 1/2% Senior Deferred Coupon Euro Notes               |   |               | 166.1   | 
|                                | 11 7/8% Senior Notes, less unamortized discount         |   |               | 491.7   | 
|                                | 12 3/8% Senior Euro Notes, plus unamortized premium     |   |               | 315.3   | 
|                                | 6 3/4% Convertible Senior Notes                         |   |               | 1,150.0 | 
|                                |                                                         |   |               |        
|Total                           |                                                         | $ | 8,520.3       |        
|                                |                                                         |   |               |        

Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
all of the outstanding public notes of the Company were canceled.

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NTL Incorporated (formerly NTL Communication Corp.) (Debtor-in-Possession)
Notes to Condensed Financial Statements

4.   Long-Term Debt

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

|                                                         |  |  |    |   |  |               |   |      |  |   |         | 
|-------------------------------------------------------- |  |  | -- | - |  | ------------- | - | ---- |  | - | ------- | 
|                                                         |  |  |    |   |  | December 31, 
|                                                         |  |  |    |   |  |              
|                                                         |  |  |    |   |  | 2002          |   | 2001 | 
|                                                         |  |  |    |   |  |               |   |      |  |  
|                                                         |  |  |    |   |  | (in millions) |  
|12- 3/4% Senior Deferred Coupon Notes                    |  |  | (a | ) |  | $             |  |      |  | $ | 277.8   | 
|11- 1/2% Senior Deferred Coupon Notes                    |  |  | (b | ) |  |               |  |      |  |   | 1,050.0 | 
|10% Senior Notes                                         |  |  | (c | ) |  |               |  |      |  |   | 400.0   | 
|9- 1/2% Senior Sterling Notes, less unamortized discount |  |  | (d | ) |  |               |  |      |  |   | 181.4   | 
|10- 3/4% Senior Deferred Coupon Sterling Notes           |  |  | (e | ) |  |               |  |      |  |   | 382.3   | 
|9- 3/4% Senior Deferred Coupon Notes                     |  |  | (f | ) |  |               |  |      |  |   | 1,153.8 | 
|9- 3/4% Senior Deferred Coupon Sterling Notes            |  |  | (g | ) |  |               |  |      |  |   | 385.9   | 
|11- 1/2% Senior Notes                                    |  |  | (h | ) |  |               |  |      |  |   | 625.0   | 
|12- 3/8% Senior Deferred Coupon Notes                    |  |  | (i | ) |  |               |  |      |  |   | 364.9   | 
|7% Convertible Subordinated Notes                        |  |  | (j | ) |  |               |  |      |  |   | 489.8   | 
|9- 1/4% Senior Euro Notes                                |  |  | (k | ) |  |               |  |      |  |   | 222.5   | 
|9- 7/8% Senior Euro Notes                                |  |  | (l | ) |  |               |  |      |  |   | 311.5   | 
|11- 1/2% Senior Deferred Coupon Euro Notes               |  |  | (m | ) |  |               |  |      |  |   | 135.6   | 
|11- 7/8% Senior Notes, less unamortized discount         |  |  | (n | ) |  |               |  |      |  |   | 490.7   | 
|12- 3/8% Senior Euro Notes, plus unamortized premium     |  |  | (o | ) |  |               |  |      |  |   | 267.8   | 
|6-3/4% Convertible Senior Notes                          |  |  | (p | ) |  |               |  |      |  |   | 1,150.0 | 
|                                                         |  |  |    |   |  |               |   |      |  |   |         | 
|                                                         |  |  |    |   |  |               |  |      |  |   | 7,889.0 | 
|                                                         |  |  |    |   |  |               |  |      |  |   | 7,889.0 | 
|                                                         |  |  |    |   |  |               |   |      |  |   |         | 
|                                                         |  |  |    |   |  | $             |  |      |  | $ |        | 
|                                                         |  |  |    |   |  |               |   |      |  |   |         | 

F-173



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NTL Incorporated (formerly NTL Communication Corp.) (Debtor-in-Possession)
Notes to Condensed Financial Statements (continued)

Outstanding Public Notes

Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
all of the outstanding public notes of NTL Communications Corp. were canceled.



|(a) |  | 12-3/4% Notes due April 15, 2005, principal amount at maturity of $277.8
million, interest payable semiannually from on October 15, 2000,
redeemable at the Companys option on or after April 15, 2000;                                                                                                                                                                                                                                
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | 11-1/2% Notes due February 1, 2006, principal amount at maturity of
$1,050.0 million, interest payable semiannually from August 1, 2001,
redeemable at the Companys option on or after February 1, 2001;                                                                                                                                                                                                                               
|   
|(c) |  | 10% Notes due February 15, 2007, principal amount at maturity of $400.0
million, interest payable semiannually from August 15, 1997, redeemable at
the Companys option on or after February 15, 2002;                                                                                                                                                                                                                                  
|   
|(d) |  | 9-1/2% Sterling Notes due April 1, 2008, principal amount at maturity of
£125.0 million ($201.2 million), interest payable semiannually from
October 1, 1998, redeemable at the Companys option on or after April 1,
2003;                                                                                                                                                                                                             
|   
|(e) |  | 10-3/4% Sterling Notes due April 1, 2008, principal amount at maturity of
£300.0 million ($482.9 million), interest payable semiannually beginning
on October 1, 2003, redeemable at the Companys option on or after April
1, 2003;                                                                                                                                                                                                    
|   
|(f) |  | 9-3/4% Notes due April 1, 2008, principal amount at maturity of $1,300.0
million, interest payable semiannually beginning on October 1, 2003,
redeemable at the Companys option on or after April 1, 2003;                                                                                                                                                                                                                             
|   
|(g) |  | 9-3/4% Sterling Notes due April 15, 2009, principal amount at maturity of
£330.0 million ($531.1 million), interest payable semiannually beginning
on October 15, 2004, redeemable at the Companys option on or after April
15, 2004;                                                                                                                                                                                                  
|   
|(h) |  | 11-1/2% Notes due October 1, 2008, principal amount at maturity of $625.0
million, interest payable semiannually from April 1, 1999, redeemable at
the Companys option on or after October 1, 2003;                                                                                                                                                                                                                                    
|   
|(i) |  | 12-3/8% Notes due October 1, 2008, principal amount at maturity of $450.0
million, interest payable semiannually beginning on April 1, 2004,
redeemable at the Companys option on or after October 1, 2003;                                                                                                                                                                                                                            
|   
|(j) |  | 7% Convertible Notes due December 15, 2008, principal amount at maturity
of $489.8 million, interest payable semiannually from June 15, 1999,
convertible into shares of NTL Incorporated common stock at a conversion
price of $39.20 per share, redeemable at the Companys option on or after
December 15, 2001 (there are approximately 12.5 million shares of NTL
Incorporated common stock reserved for issuance upon conversion);
|   
|(k) |  | 9- 1/4% Euro Notes due November 15, 2006, principal amount at maturity of
250.0 million ($262.1 million), interest payable semiannually from May
15, 2000;                                                                                                                                                                                                                                                                             
|   
|(l) |  | 9-7/8% Euro Notes due November 15, 2009, principal amount at maturity of
350.0 million ($367.0 million), interest payable semiannually from May
15, 2000, redeemable at the Companys option on or after November 15,
2004;                                                                                                                                                                                                            

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NTL Incorporated (formerly NTL Communication Corp.) (Debtor-in-Possession)
Notes to Condensed Financial Statements (continued)



|(m) |  | 11-1/2% Deferred Euro Notes due November 15, 2009, principal amount at
maturity of 210.0 million ($220.1 million), interest payable semiannually
beginning on May 15, 2005, redeemable at the Companys option on or after
November 15, 2004 and;                                                                                                                                                                                                                  
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(n) |  | 11-7/8% Notes due October 1, 2010, principal amount at maturity of $500.0
million, interest payable semiannually from April 1, 2001, redeemable at
the Companys option on or after October 1, 2005;                                                                                                                                                                                                                                                                
|   
|(o) |  | 12-3/8% Senior Euro Notes due February 1, 2008, issued in January and
February 2001, principal amount at maturity of 300.0 million ($314.6
million), interest payable semiannually from August 1, 2001;                                                                                                                                                                                                                                                            
|   
|(p) |  | 6-3/4% Convertible Senior Notes due May 15, 2008, issued in May 2001,
principal amount at maturity of $1,150.0 million, interest payable
semiannually from November 15, 2001, convertible into shares of NTL
Incorporated common stock at a conversion price of $32.728 per share,
redeemable at the Companys option on or after May 20, 2004 (there are
approximately 35.1 million shares of NTL Incorporated common stock
reserved for issuance upon conversion);

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

During 2002, 2001 and 2000, the Company recognized $96.7 million, $243.5
million and $334.3 million, respectively, of original issue discount as
interest expense.

In connection with the Companys emergence from Chapter 11 reorganization, the
Company and certain of its subsidiaries issued $558.249 million aggregate
principal face amount of 19% Senior Secured Notes due 2010 (the Exit Notes)
on January 10, 2003. Initial purchasers of the Companys Exit Notes also
purchased 500,000 shares of the Companys common stock on that date. The gross
proceeds from the sale of the Exit Notes and such shares totaled $500.0
million. The proceeds were used in part to repay amounts outstanding under the
DIP facility and to purchase from NTL Delaware a £90.0 million note of NTL (UK)
Group Inc. and to repay certain other obligations. The Exit Notes are due on
January 1, 2010. The Exit Notes are redeemable at the Companys option after
January 10, 2003. Interest on the Exit Notes is payable in cash semiannually
from July 1, 2003, with respect to the interest payment due on July 1, 2003,
the Company may elect to pay any portion of the interest in cash or by issuance
of additional pay-in-kind notes. With respect to the interest payments due on
January 1, 2004 and July 1, 2004, the Company may make a similar election based
on our Available Cash, as defined.

The purchasers of the Companys
Exit Notes are entitled to registration rights with respect to such
notes pursuant to the Exchange and Registration Rights Agreement.
Under the Exchange and Registration Rights Agreement, the Company
agreed, among other things, to file with the Securities and Exchange
Commission a registration statement with respect to an offer to
exchange the Exit Notes for new notes registered under the Securities
Act with terms substantially identical to those of the unregistered
notes. If the Company fails to file such registration statement with
the Securities and Exchange Commission on or before April 15,
2003 or if certain other registration default events described in the
Exchange and Registration Rights Agreement occur, then the Company
will be required to pay special interest to each holder of the Exit
Notes, pursuant to provisions of the Exchange and Registration Rights
Agreement, during the period of one or more of such registration
default events. The Company would pay such special interest at a rate
of 0.5% per annum, which increases to 1.0% per annum after the first
120-day period following the occurrence of the first such
registration default. In addition, the Companys failure to
register the notes in compliance with the Exchange and Registration
Rights Agreement would result in an event of default under the
Indenture governing the Exit Notes.

Long-term debt repayments are due as follows (in millions). The table reflects
the Companys contractual obligations as of December 31, 2002 as adjusted for
the emergence from Chapter 11 reorganization.

|                         |                       |   |       |       | 
|------------------------ | --------------------- | - | ----- | ----- | 
|Year ending December 31: |                       |   |       |      
|                         | 2003                  |   | $     |      | 
|                         | 2004                  |   |       |      | 
|                         | 2005                  |   |       |      | 
|                         | 2006                  |   |       |      | 
|                         | 2007                  |   |       |      | 
|                         | Thereafter            |   |       | 558.2 | 
|                         |                       |   |       |      
|                         | Total debt repayments |   |       | 558.2 | 
|                         | Less: current portion |   |       |      | 
|                         |                       |   |       |      
|                         |                       | $ | 558.2 |      
|                         |                       |   |       |      

5.   Leases

Leases for office space end in 2004. Total rental expense for the years ended
December 31, 2002, 2001 and 2000 under operating leases was $1.4 million, $1.8
million and $2.0 million, respectively.

Future minimum lease payments under noncancellable operating leases as of
December 31, 2002 are (in millions): $1.1 (2003) and $0.7 (2004).

F-175



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##### Table of Contents



6.     Other

On the Effective Date, the Company loaned Communications Cable Funding Corp.,
(a wholly-owned subsidiary), $160.6 million for the repayment of debt to NTL
Delaware, Inc. The loan is payable on demand. Interest is payable on demand
at a rate of 5.28516% per annum and will be increased to 15% per annum.

In addition, on the Effective Date, the Company acquired the public debt of
Diamond Cable Communications Limited aggregating $1,373.1 million (including
interest of $136.5 million).

On February 4, 2003, the Company released Diamond Cable Communications
Limited from its obligations under these notes.

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

No cash dividends were paid to the registrant by subsidiaries for the years
ended December 31, 2002, 2001 and 2000.

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NTL Incorporated (formerly NTL Communications Corp.) (Debtor-in-Possession)
Schedule II - Valuation and Qualifying Accounts

|                             |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |       | 
|---------------------------- | ------------------------------- | ------ | ---------- | -------- | --------- | -------- | --------- | -------- | ---------------------- | --------- | ------ | - | ------- |  | - | ----- | ----- |  | - | ----- | 
|Col. A                       |                                 | Col. B |            | Col. C   |           | Col. D   |           | Col. E  
|                             |                                 |        |            |          |           |          |           |         
|                             |                                 |        |            |          |           |          | Additions |          |                        |           |        |   |         |  |  
|                             |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |  
|                             |                                 |        |            |          |           |          |           |          |                        |           | (2)    |   |         |  |   |       |       |  |  
|                             |                                 |        |            |          |           |          | (1)       |          | Charged                |           |        |   |         |  |   |       |      
|                             |                                 |        | Balance at |          | Charged   |          | to        |          |                        |           |        |   |         |  |  
|                             |                                 |        | Beginning  |          | to        |          | Other     |          |                        |           |        |   | Balance
|                             |                                 |        | of         |          | Costs and |          | Accounts  |          | (Deductions)/Additions |           | at End
|Description                  |                                 | Period |            | Expenses |           | Describe |           | Describe |                        | of Period
|                             |                                 |        |            |          |           |          |           |          |                        |          
|Year ended December 31, 2002 |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |      
|                             | Allowance for doubtful accounts |        | $          | 126.1    |           |          | $         | 55.2     |                        |           | $      |  |         |  | $ | (88.6 | )(a)  |  | $ | 92.7  | 
|                             |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |       | 
|Year ended December 31, 2001 |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |      
|                             | Allowance for doubtful accounts |        | $          | 135.2    |           |          | $         | 58.3     |                        |           | $      |  |         |  | $ | (67.4 | )(b)  |  | $ | 126.1 | 
|                             |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |       | 
|Year ended December 31, 2000 |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |      
|                             | Allowance for doubtful accounts |        | $          | 84.9     |           |          | $         | 98.5     |                        |           | $      |  |         |  | $ | (48.2 | )(c)) |  | $ | 135.2 | 
|                             |                                 |        |            |          |           |          |           |          |                        |           |        |   |         |  |   |       |       |  |   |       | 

|    |  |                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Uncollectible accounts written-off, net of recoveries of $99.5
million, offset by $10.9 million foreign currency exchange translation
adjustments.                                                                                                   
|   
|(b) |  | Uncollectible accounts written-off, net of recoveries of $63.5
million and $3.9 million foreign currency translation adjustments.                                                                                                                    
|   
|(c) |  | Uncollectible accounts written-off, net of recoveries of $91.6
million and $5.7 million foreign currency exchange translation
adjustments, offset by $49.1 million allowance for doubtful accounts as
of acquisition dates of purchased subsidiaries.

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SIGNATURES

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

|                   |  |                  |  |                                                                                               
|------------------ |  | ---------------- |  | ----------------------------------------------------------------------------------------------
|                   |  | NTL EUROPE, INC.
|                   |  |                  |  |                                                                                               
|Date: May 29, 2003 |  | By:              |  | /s/ Jeffrey A. Brodsky                                                                        
|                   |  |                  |  |                                                                                               
|                   |  |                  |  | Jeffrey A. Brodsky
Chairman of the Board of Directors, President and Chief  
Executive Officer

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 and in the capacities and on the dates indicated:

|                                         |  |                                                                                            |  |             
|---------------------------------------- |  | ------------------------------------------------------------------------------------------ |  | ------------
|Signatures                               |  | Title                                                                                      |  | Date        
|                                         |  |                                                                                            |  |             
|                                         |  |                                                                                            |  |             
|                                        
|/s/ Jeffrey A. BrodskyJeffrey A. Brodsky |  | Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer) |  | May 29, 2003
|                                        
|/s/ John F. GreggJohn F. Gregg           |  | Treasurer and Chief Financial
Officer (Principal Financial Officer)                        |  | May 29, 2003
|                                        
|/s/ Richard A. SpohnRichard A. Spohn     |  | Vice President and Chief
Accounting Officer (Principal
Accounting Officer)                 |  | May 29, 2003
|                                        
|/s/ Michael J. CochranMichael J. Cochran |  | Director                                                                                   |  | May 29, 2003
|                                        
|/s/ H. Sean MathisH. Sean Mathis         |  | Director                                                                                   |  | May 29, 2003





---



##### Table of Contents



CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jeffrey A. Brodsky, certify that:

1.     I have reviewed this annual report on Form 10-K of NTL Europe, Inc.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | (a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the
effectiveness of disclosure controls and procedures based on our
evaluation of the Evaluation Date;                                                                                                                               

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors:



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: May 29, 2003

|                                                        |  | 
|------------------------------------------------------- |  | 
|/s/ Jeffrey A. Brodsky                                  |  | 
|Name: Jeffrey A. Brodsky
Title: Chief Executive Officer |  | 





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##### Table of Contents



CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, John F. Gregg, certify that:

1.     I have reviewed this annual report on Form 10-K of NTL Europe, Inc.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | (a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the
effectiveness of disclosure controls and procedures based on our
evaluation of the Evaluation Date;                                                                                                                               

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors:



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: May 29, 2003

|                                                   |  | 
|-------------------------------------------------- |  | 
|/s/ John F. Gregg                                  |  | 
|Name: John F. Gregg
Title: Chief Financial Officer |  | 





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##### Table of Contents






EXHIBIT INDEX

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Amended and Restated Certificate of Incorporation, dated as of January
10, 2003 [Incorporated by reference to Exhibit 1 to the Registrants
Registration Statement on Form 8-A/A (Commission File No. 0-30673) filed
on January 10, 2003]                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3.2  |  | Amended and Restated By-Laws [Incorporated by reference to Exhibit 2 to
the Registrants Registration Statement on Form 8-A/A (Commission File No.
0-30673) filed on January 10, 2003]                                                                                                                                                                                                                                                                                                                                                                      
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.1  |  | Form of Common Stock Certificate [Incorporated by reference to Exhibit 4
to the Registrants Registration Statement on Form 8-A/A (Commission File
No. 0-30673) filed on January 10, 2003]                                                                                                                                                                                                                                                                                                                                                                  
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.2  |  | Form of 10% Fixed Coupon Redeemable Preferred Stock [Incorporated by
reference to Exhibit 5 to the Registrants Registration Statement on Form
8-A/A (Commission File No. 0-30673) filed on January 10, 2003]                                                                                                                                                                                                                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.3  |  | Stockholder Rights Agreement, dated as of January 10, 2003, by and
between NTL Europe, Inc. and Continental Stock Transfer and Trust Company
[Incorporated by reference to Exhibit 3 to the Registrants Registration
Statement on Form 8-A/A (Commission File No. 0-30673) filed on January 10,
2003]                                                                                                                                                                                                                                                      
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.4  |  | Registration Rights Agreement, dated as of January 10, 2003, by and among
NTL Europe, Inc. and the other parties listed on the signature pages
thereto [Incorporated by reference to Exhibit 4.2 to the Registrants
Current Report on Form 8-K (Commission File No. 0-30673) filed on January
27, 2003]                                                                                                                                                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.5* |  | Amendment No. 1 to Registration Rights Agreement, dated as of May 7,
2003, by and among NTL Europe, Appaloosa Management L.P. and Angelo Gordon
& Co., L.P.                                                                                                                                                                                                                                                                                                                                                                                                 
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.1 |  | NTL Europe, Inc. 2003 Stock Option Plan adopted on January 10, 2003
[Incorporated by reference to Exhibit 10.1 to the Registrants Current
Report on Form 8-K (Commission File No. 0-30673) filed on January 10,
2003]                                                                                                                                                                                                                                                                                                                                      
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.2 |  | Credit Agreement, dated March 28, 2000, as amended on May 16, 2000 and as
amended and restated as of April 30, 2002, by and among NTL Delaware as
parent, NTL Cablecom Holding GmbH as shareholder, Cablecom GmbH as
principal borrower, J.P. Morgan plc and Morgan Stanley Senior Funding,
Inc. as arrangers and joint book managers, J.P. Morgan Europe Limited as
agent, and the lenders party thereto [Incorporated by reference to Exhibit
10.2 to the Registrants Current Report on Form 8-K (Commission File No.
0-30673) filed on January 10, 2003]
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.3 |  | Employment Agreement, dated October 15, 2002, by and between NTL Europe,
Inc. and John F. Gregg [Incorporated by reference to Exhibit 10.3 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                                                                                                                                                                                                                          
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.4 |  | Employment Agreement, dated October 15, 2002, by and between NTL Europe,
Inc. and Bruno J. Claude [Incorporated by reference to Exhibit 10.4 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                                                                                                                                                                                                                        





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##### Table of Contents



|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5   |  | Employment Agreement, dated October 15, 2002, by and between Cablecom
GmbH and John F. Gregg [Incorporated by reference to Exhibit 10.5 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.6   |  | Employment Agreement, dated October 15, 2002, by and between Cablecom
GmbH and Bruno J. Claude [Incorporated by reference to Exhibit 10.6 to the
Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.7   |  | Engagement Letter, dated August 30, 2002, by and among NTL Europe, Inc.,
the Creditors Committee and Quest Turnaround Advisors, L.L.C.
[Incorporated by reference to Exhibit 10.7 to the Registrants Current
Report on Form 8-K (Commission File No. 0-30673) filed on January 10,
2003]                                                                      
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.8   |  | Form of NTL Europe, Inc. Director and Officer Indemnification Agreement
and a schedule of persons party thereto [Incorporated by reference to
Exhibit 10.8 to the Registrants Current Report on Form 8-K (Commission
File No. 0-30673) filed on January 10, 2003]                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.9   |  | Tax Sharing Agreement, dated January 10, 2003, by and between NTL Europe,
Inc. and NTL Incorporated [Incorporated by reference to Exhibit 10.9 to
the Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.10  |  | Transitional Services Agreement, dated January 10, 2003, by and between
NTL Europe, Inc. and NTL Incorporated [Incorporated by reference to
Exhibit 10.10 to the Registrants Current Report on Form 8-K (Commission
File No. 0-30673) filed on January 10, 2003]                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.11  |  | De-Merger Agreement, dated January 10, 2003, by and between NTL Europe,
Inc. and NTL Incorporated [Incorporated by reference to Exhibit 10.11 to
the Registrants Current Report on Form 8-K (Commission File No. 0-30673)
filed on January 10, 2003]                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.12  |  | Novation Agreement, dated January 10, 2003, by and among NTL Europe,
Inc., NTL Incorporated, Cable and Wireless plc and certain of each of
their respective subsidiaries [Incorporated by reference to Exhibit 10.12
to the Registrants Current Report on Form 8-K (Commission File No.
0-30673) filed on January 10, 2003]                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.13  |  | Agreement, relating to the transfer of certain securities in B2, dated
April 30, 2003, among NTL Delaware, NTL Sweden, Nogenta Swedish
Acquisition Holding B.V. and the Key Shareholders, Other Holders and B2.
[Incorporated by reference to Exhibit 10.13 of the Registrants Current
Report on Form 8-K (Commission File. No. 0-30673) filed on May 14, 2003]
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|10.14* |  | Engagement Letter, dated January 28, 2003, by and between NTL Europe,
Inc. and Quest Turnaround Advisors, L.L.C.                                                                                                                                                                                                                                                
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|21*    |  | Subsidiaries                                                                                                                                                                                                                                                                                                                                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|99.1*  |  | Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act                                                                                                                                                                                                                                                                      
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|99.2*  |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act                                                                                                                                                                                                                                                                      
|       |  |                                                                                                                                                                                                                                                                                                                                                                 
|99.3*  |  | Corporate Governance Guidelines of NTL Europe, Inc. adopted on January 10, 2003                                                                                                                                                                                                                                                                                 





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##### Table of Contents



|      |  |                                                                                                 
|----- |  | ------------------------------------------------------------------------------------------------
|99.4* |  | Code of Business Conduct and Ethics of NTL Europe, Inc. adopted on January 10, 2003             
|      |  |                                                                                                 
|99.5* |  | Code of Ethics for Principal Executive and Senior Financial Officers
adopted on January 10, 2003
|      |  |                                                                                                 
|99.6* |  | Compensation Committee Charter of NTL Europe, Inc. adopted on January 10, 2003                  
|      |  |                                                                                                 
|99.7* |  | Audit Committee Charter of NTL Europe, Inc. adopted on January 10, 2003                         
|      |  |                                                                                                 
|99.8* |  | Disclosure Committee Charter of NTL Europe, Inc. adopted on April 10, 2003                      



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|* |  | filed herewith
|- |  | --------------