##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)[ x ]
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the Quarterly Period Ended:


SEPTEMBER 30, 2003

OR

[    ]
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the Transition Period from  to


Commission File Number 33-83740

DIAMOND CABLE COMMUNICATIONS LIMITED
(Exact name of registrant as specified in its charter)

England and Wales
    
    N/A(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)


NTL House, Bartley Wood Business Park, Hook,
Hampshire, RG27 9UP, England
011 44 1256 752000
(Address, including zip code, and telephone number, including area code,
of Registrants principal executive offices)




---



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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [x]



---



As of September 30, 2003, there were 59,138,852 shares of the Registrants
Ordinary Shares of 2.5 pence each outstanding. The Registrant is a wholly owned
subsidiary of NTL Incorporated and there is no market for the Registrants
shares.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

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
confirmed by a court. Yes [ x ] No [ ]





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TABLE OF CONTENTS



|                             |                                                                                               |                                                                       |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                             |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                                
|                             |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                      
|                             |                                                                                               | CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (DEFICIENCY)
|                             |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                      
|                             |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                 
|                             | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|                             | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                             | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION  
|                             | ITEM 5. OTHER INFORMATION                                                                    
|                             | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                  



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

INDEX

PageNumberPART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of September 30, 2003
(Unaudited) and December 31, 2002
    
    
    1Condensed Consolidated Statements of Operations for Three and
Nine Months Ended September 30, 2003 and 2002 and January 1,
2003 (Unaudited)
    
    
    2Condensed Consolidated Statement of Shareholders Equity
(Deficiency) for the Nine Months Ended September 30, 2003
(Unaudited)
    
    
    3Condensed Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 2003 and 2002 and January 1, 2003
(Unaudited)
    
    
    4Notes to the Condensed Consolidated Financial Statements
(Unaudited)
    
    
    5Item 2. Managements Discussion and Analysis of Results of
Operations and Financial Condition
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29PART II. OTHER INFORMATIONItem 5. Other Information
    
    
    30Item 6. Exhibits and Reports on Form 8-K
    
    
    31SIGNATURES
    
    
    32






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DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




PART I FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




CONDENSED CONSOLIDATED BALANCE SHEETS
(in £000s)

September 30,
    
    
    
    December 31,2003
    
    
    
    2002Reorganized
    
    
    
    Predecessorcompany
    
    
    
    company(Unaudited)
    
    
    
    (See Note)AssetsCurrent assetsCash and cash equivalents
    
    
    £3,265
    
    
    
    
    
    £12,168Accounts receivable, less allowance for doubtful accounts
of £1,665 (2003) and £2,847 (2002)
    
    
    16,482
    
    
    
    
    
    15,952Other current assets
    
    
    266
    
    
    
    
    
    498Total current assets
    
    
    20,013
    
    
    
    
    
    28,618Fixed assets, net
    
    
    349,488
    
    
    
    
    
    486,142Deferred financing costs, net of accumulated amortization
of £695 (2003) and £15,468 (2002)
    
    
    2,997
    
    
    
    
    
    9,684Goodwill
    
    
    
    
    
    
    
    
    66,647Franchise costs
    
    
    
    
    
    
    
    
    316Customer list, net of accumulated amortization of £9,421 (2003)
    
    
    57,140
    
    
    
    
    
    Reorganization value in excess of amounts allocable to
identifiable assets
    
    
    79,262
    
    
    
    
    
    Total assets
    
    
    £508,900
    
    
    
    
    
    £591,407Liabilities and shareholders equity (deficiency)Current liabilitiesAccrued expenses
    
    
    £8,150
    
    
    
    
    
    £10,542Interest payable
    
    
    3,256
    
    
    
    
    
    Deferred revenue
    
    
    4,929
    
    
    
    
    
    4,525Due to affiliates
    
    
    14,019
    
    
    
    
    
    30,655Current portion of long-term debt
    
    
    252
    
    
    
    
    
    1,960Total current liabilities
    
    
    30,606
    
    
    
    
    
    47,682Liabilities subject to compromise
    
    
    
    
    
    
    
    
    1,029,422Long-term debt, less current portion
    
    
    162,760
    
    
    
    
    
    Loan from affiliates
    
    
    19,607
    
    
    
    
    
    Deferred income taxes
    
    
    921
    
    
    
    
    
    921Commitments and contingent liabilitiesShareholders equity (deficiency)Ordinary shares of 2.5p each: 150,000,060 authorized;59,138,852 (2003) and 59,138,851 (2002) issued and outstanding
    
    
    1,478
    
    
    
    
    
    1,478Additional paid-in capital
    
    
    350,288
    
    
    
    
    
    317,506Accumulated deficit
    
    
    (56,760
    )
    
    
    
    
    (805,602
    )Total shareholders equity (deficiency)
    
    
    295,006
    
    
    
    
    
    (486,618
    )Total liabilities and shareholders equity (deficiency)
    
    
    £508,900
    
    
    
    
    
    £591,407


Note: The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date.
See accompanying notes.

1



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DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in £000s)

Three months ended
    
    
    
    Nine months endedSeptember 30,
    
    
    
    September 30,2003
    
    
    
    2002
    
    
    
    2003
    
    
    
    2002Reorganized
    
    
    
    Predecessor
    
    
    
    Reorganized
    
    
    
    Predecessorcompany
    
    
    
    company
    
    
    
    company
    
    
    
    companyRevenue
    
    
    £46,659
    
    
    
    
    
    £42,965
    
    
    
    
    
    £138,114
    
    
    
    
    
    £133,161Costs and expensesOperating costs (exclusive of depreciation
shown below)
    
    
    (19,748
    )
    
    
    
    
    (21,354
    )
    
    
    
    
    (60,885
    )
    
    
    
    
    (66,290
    )Selling, general and administrative
expenses
    
    
    (14,519
    )
    
    
    
    
    (13,698
    )
    
    
    
    
    (43,524
    )
    
    
    
    
    (42,087
    )Other charges
    
    
    (69
    )
    
    
    
    
    (2,926
    )
    
    
    
    
    (847
    )
    
    
    
    
    (2,956
    )Depreciation
    
    
    (11,839
    )
    
    
    
    
    (14,873
    )
    
    
    
    
    (34,685
    )
    
    
    
    
    (45,938
    )Amortization
    
    
    (3,141
    )
    
    
    
    
    
    
    
    
    
    
    (9,421
    )
    
    
    
    
    (49,316
    )
    
    
    
    
    (52,851
    )
    
    
    
    
    (149,362
    )
    
    
    
    
    (157,271
    )Operating loss
    
    
    (2,657
    )
    
    
    
    
    (9,886
    )
    
    
    
    
    (11,248
    )
    
    
    
    
    (24,110
    )Other income (expense)Interest expense and amortization of
debt discount and expenses
    
    
    (7,472
    )
    
    
    
    
    (5,841
    )
    
    
    
    
    (22,428
    )
    
    
    
    
    (53,819
    )Interest expense to affiliate
    
    
    (332
    )
    
    
    
    
    
    
    
    
    
    
    (29,811
    )
    
    
    
    
    Interest income
    
    
    45
    
    
    
    
    
    164
    
    
    
    
    
    110
    
    
    
    
    
    345Exchange gains
    
    
    508
    
    
    
    
    
    26,161
    
    
    
    
    
    6,617
    
    
    
    
    
    69,558(7,251
    )
    
    
    
    
    20,484
    
    
    
    
    
    (45,512
    )
    
    
    
    
    16,084Net (loss) income
    
    
    (£9,908
    )
    
    
    
    
    £10,598
    
    
    
    
    
    (£56,760
    )
    
    
    
    
    (£8,026
    )




January 1,2003PredecessorcompanyInterest expense to affiliate
    
    
    (£59,850
    )Fresh-start adoption  intangible assets
    
    
    78,860Fresh-start adoption  long-term debt
    
    
    723,533Fresh-start adoption  fixed assets
    
    
    (113,965
    )Net income
    
    
    £628,578


See accompanying notes.

2



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DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (DEFICIENCY)
(Unaudited)
(in £000s except number of shares)

Compre-Additional
    
    hensiveOrdinary
    
    
    
    
    
    paid-in
    
    income
    
    Accumulatedshares
    
    Par
    
    capital
    
    (loss)
    
    deficit
    
    TotalPredecessor companyBalance at December 31,
2002
    
    
    59,138,851
    
    
    
    £1,478
    
    
    
    £317,506
    
    
    
    
    
    
    
    (£805,602
    )
    
    
    (£486,618
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    £628,578
    
    
    
    628,578
    
    
    
    628,578Exit transactions
    
    
    1
    
    
    
    
    
    
    
    14,380
    
    
    
    
    
    
    
    
    
    
    
    14,380Fresh start adjustment
    
    
    
    
    
    
    
    
    
    
    (177,024
    )
    
    
    
    
    
    
    177,024
    
    
    
    Reorganized companyBalance at January 1, 2003
    
    
    59,138,852
    
    
    
    1,478
    
    
    
    154,862
    
    
    
    
    
    
    
    
    
    
    
    156,340Release of debt obligations
    
    
    
    
    
    
    
    
    
    
    195,426
    
    
    
    
    
    
    
    
    
    
    
    195,426Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (£56,760
    )
    
    
    (56,760
    )
    
    
    (56,760
    )Balance at September 30,
2003
    
    
    59,138,852
    
    
    
    £1,478
    
    
    
    £350,288
    
    
    
    
    
    
    
    (£56,760
    )
    
    
    £295,006


See accompanying notes.

3



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in £000s)

Nine months endedSeptember 30,2003
    
    
    
    2002Reorganized
    
    
    
    Predecessorcompany
    
    
    
    companyNet cash (used in) provided by operating activities
    
    
    (£16,166
    )
    
    
    
    
    £12,976Investing activitiesPurchases of fixed assets
    
    
    (12,528
    )
    
    
    
    
    (16,717
    )Proceeds from disposition of fixed assets
    
    
    
    
    
    
    
    
    31Net
cash used in investing activities
    
    
    (12,528
    )
    
    
    
    
    (16,686
    )Financing activitiesPrincipal payments
    
    
    (132
    )
    
    
    
    
    (218
    )Capital lease payments
    
    
    
    
    
    
    
    
    (476
    )Loans from affiliate
    
    
    19,923
    
    
    
    
    
    12,961Contributions from NTL Communications Corp.
    
    
    
    
    
    
    
    
    140Net cash provided by financing activities
    
    
    19,791
    
    
    
    
    
    12,407(Decrease) increase in cash and cash equivalents
    
    
    (8,903
    )
    
    
    
    
    8,697Cash and cash equivalents, beginning of period
    
    
    12,168
    
    
    
    
    
    4,535Cash and cash equivalents, end of period
    
    
    £3,265
    
    
    
    
    
    £13,232Supplemental disclosure of cash flow informationCash paid during the period for interest
    
    
    £30,143
    
    
    
    
    
    £23,598




January 1,2003PredecessorcompanyNet cash (used in) provided by operating activities
    
    
    £Investing activitiesNet cash used in investing activities
    
    
    Financing activitiesNet cash provided by financing activities
    
    
    (Decrease) increase in cash and cash equivalents
    
    
    Cash and cash equivalents, beginning of period
    
    
    12,168Cash and cash equivalents, end of period
    
    
    £12,168Supplemental disclosure of cash flow informationCash paid during the period for interest
    
    
    £


See accompanying notes.

4



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



|1. |  | Basis of Presentation
|-- |  | ---------------------

Organization and Business

We are a limited company incorporated under the laws of England and Wales. We
are the holding company of subsidiaries that offer broadband and communications
services providing telephone, cable television and Internet services to the
home, as well as data, voice and Internet services to businesses in the
Leicestershire and Nottinghamshire regions of the UK. These interests are held
through our subsidiary, Diamond Holdings Limited. We are a wholly owned
subsidiary of NTL Incorporated (NTL) and we are reliant upon the support of
NTL and its subsidiaries to continue our operations.

Chapter 11 Reorganization

On May 8, 2002, Diamond Holdings and we filed a prearranged joint
reorganization plan (the Plan) under Chapter 11 of Title 11 of the US
Bankruptcy Code. We filed jointly with NTL Europe, Inc. (formerly NTL
Incorporated), NTL (Delaware), Inc., NTL Incorporated (formerly NTL
Communications Corp.) and Communications Cable Funding Corp. Also, on May 8,
2002, we filed proceedings for Administration in England. Our operating
subsidiaries were not included in the Chapter 11 filing. The Plan became
effective on January 10, 2003, (the Effective Date) at which time we emerged
from Chapter 11 reorganization and administration.

Basis of Presentation

We have prepared our accompanying unaudited condensed consolidated financial
statements in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of our management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Our operating results for the three
and nine months ended September 30, 2003 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2003. For further
information, refer to the consolidated financial statements and footnotes
thereto included in our Annual Report on Form 10-K for the year ended December
31, 2002.

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

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

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

5



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DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

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

Reorganization Value

We engaged an independent financial adviser to assist in the determination of
our reorganization value as defined in SOP 90-7. Our independent financial
advisor and we determined that our reorganization value was £556.3 million.
This determination was based upon various valuation methods, including
discounted projected cash flow analysis, selected comparable market multiples
of publicly traded companies and other applicable ratios and economic
information relevant to our operations. Certain factors that were incorporated
into the determination of our reorganization value included the following:



| |  |  | Reporting unit 10 year cash flow projections
| | - |  | --------------------------------------------



| |  |  | Corporate income tax rates of 30% in the UK
| | - |  | -------------------------------------------



| |  |  | Present value discount factor of 15%
| | - |  | ------------------------------------



| |  |  | Residual value representing the sum of the value beyond 10 years
into perpetuity was calculated using the Gordon Growth Model
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

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

We determined that our reorganization value computed as of the Effective Date
of January 10, 2003 consisted of the following (in £000s):

Present value of discounted cash flows of the emerging entity
    
    
    £518,000Current assets
    
    
    28,618Other assets
    
    
    9,684Reorganization value
    
    
    £556,302


6



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DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Fresh-Start Reporting

In accordance with SOP 90-7, we adopted fresh-start reporting on January 1,
2003. We adopted fresh-start reporting because the holders of NTLs voting
common shares immediately before filing and confirmation of the Plan received
less than 50% of NTLs voting shares of the emerging company, and because our
reorganization value is less than our post-petition liabilities and allowed
claims, as shown below (in £000s):

Allowed claims:Liabilities subject to compromise
    
    
    £1,029,422Post petition liabilitiesCurrent liabilities
    
    
    47,682Deferred income taxes
    
    
    9211,078,025Reorganization value
    
    
    (556,302
    )£521,723


We engaged an independent financial advisor to assist in the determination of
the reorganization value (or fair value) of our assets and the present value of
our 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, our total reorganization value exceeded the amounts
allocable to identifiable assets that resulted in a new indefinite-lived
intangible asset.

7



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DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

The following reconciliation of the Predecessor Companys consolidated balance
sheet as of December 31, 2002 to that of the Reorganized Company as of January
1, 2003 gives effect to our emergence from Chapter 11 reorganization and the
adoption of fresh-start reporting. The adjustments titled Emergence from
Chapter 11 reflect the consummation of the Plan. The adjustments titled
Fresh-Start reflect the adoption of fresh-start reporting (in £000s).

December 31,
    
    
    
    
    
    
    
    
    
    January 1,2002
    
    
    
    
    
    
    
    
    
    2003EmergencePredecessor
    
    from
    
    Fresh-
    
    Reorganizedcompany
    
    Chapter 11
    
    start
    
    companyAssetsCurrent assetsCash and cash equivalents
    
    
    £12,168
    
    
    
    £
    
    
    
    £
    
    
    
    £12,168Accounts receivable, net
    
    
    15,952
    
    
    
    
    
    
    
    
    
    
    
    15,952Other current assets
    
    
    498
    
    
    
    
    
    
    
    
    
    
    
    498Total current assets
    
    
    28,618
    
    
    
    
    
    
    
    
    
    
    
    28,618Fixed assets, net
    
    
    486,142
    
    
    
    
    
    
    
    (113,965
    )
    
    
    372,177Deferred financing costs, net
    
    
    9,684
    
    
    
    
    
    
    
    
    
    
    
    9,684Goodwill
    
    
    66,647
    
    
    
    
    
    
    
    (66,647
    )
    
    
    Franchise costs
    
    
    316
    
    
    
    
    
    
    
    (316
    )
    
    
    Customer list
    
    
    
    
    
    
    
    
    
    
    66,561
    
    
    
    66,561Reorganization value in excess of amounts allocable to
identifiable assets
    
    
    
    
    
    
    
    
    
    
    79,262
    
    
    
    79,262Total assets
    
    
    £591,407
    
    
    
    £
    
    
    
    (£35,105
    )
    
    
    £556,302Liabilities and shareholders equity (deficiency)Liabilities not subject to compromiseCurrent liabilitiesAccounts payable and accrued expenses
    
    
    £10,542
    
    
    
    £
    
    
    
    £
    
    
    
    £10,542Interest payable
    
    
    
    
    
    
    18,487
    
    
    
    
    
    
    
    18,487Deferred revenue
    
    
    4,525
    
    
    
    
    
    
    
    
    
    
    
    4,525Due to affiliates
    
    
    30,655
    
    
    
    
    
    
    
    
    
    
    
    30,655Current portion of long-term debt
    
    
    1,960
    
    
    
    
    
    
    
    (1,708
    )
    
    
    252Total current liabilities
    
    
    47,682
    
    
    
    18,487
    
    
    
    (1,708
    )
    
    
    64,461Long-term debt, net of discount
    
    
    
    
    
    
    203,282
    
    
    
    (45,733
    )
    
    
    157,549Long-term debt due to affiliate
    
    
    
    
    
    
    853,123
    
    
    
    (676,092
    )
    
    
    177,031Deferred income taxes
    
    
    921
    
    
    
    
    
    
    
    
    
    
    
    921Total liabilities not subject to compromise
    
    
    48,603
    
    
    
    1,074,892
    
    
    
    (723,533
    )
    
    
    399,962Liabilities subject to compromiseLong-term debt, less current portion
    
    
    971,567
    
    
    
    (971,567
    )
    
    
    
    
    
    
    Notes payable to affiliates
    
    
    12,117
    
    
    
    (12,117
    )
    
    
    
    
    
    
    Accrued interest
    
    
    45,738
    
    
    
    (45,738
    )
    
    
    
    
    
    
    Total liabilities subject to compromise
    
    
    1,029,422
    
    
    
    (1,029,422
    )
    
    
    
    
    
    
    Shareholders equity (deficiency)Ordinary shares
    
    
    1,478
    
    
    
    
    
    
    
    
    
    
    
    1,478Additional paid-in capital
    
    
    317,506
    
    
    
    14,380
    
    
    
    (177,024
    )
    
    
    154,862Accumulated deficit
    
    
    (805,602
    )
    
    
    (59,850
    )
    
    
    865,452
    
    
    
    Total shareholders equity (deficiency)
    
    
    (486,618
    )
    
    
    (45,470
    )
    
    
    688,428
    
    
    
    156,340Total liabilities and shareholders equity (deficiency)
    
    
    £591,407
    
    
    
    £
    
    
    
    (£35,105
    )
    
    
    £556,302


8



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Pro Forma Results of Operations

The unaudited condensed consolidated pro forma results of our operations for
the three and nine months ended September 30, 2002 assuming we emerged from
Chapter 11 reorganization and adopted fresh-start reporting on January 1, 2002
follows (in £000s). The pro forma results of our operations are not
necessarily indicative of the results that would have occurred had we emerged
from Chapter 11 reorganization and adopted fresh-start reporting on January 1,
2002, or that might occur in the future.

Three months
    
    Nine monthsended
    
    endedSeptember 30,
    
    September 30,2002
    
    2002Total revenue
    
    
    £42,965
    
    
    
    £133,161Net (loss) income
    
    
    (£16,652
    )
    
    
    (£44,339
    )




|2. |  | Recent Accounting Pronouncements
|-- |  | --------------------------------

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

In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of
Variable Interest Entities, which requires variable interest
entities to be consolidated by the primary beneficiary of the entity if certain
criteria are met. FIN 46 is effective immediately for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN
46 become effective for us during the fourth quarter of 2003. The
implementation of this interpretation is not expected to have a significant
effect on our results of operations, financial condition or cash flows.

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

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS No. 146 replaced EITF 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.
SFAS No. 146 is effective for exit or disposal activities that are initiated
after December 31, 2002. The adoption of this standard did not have a
significant effect on our results of operations, financial condition or cash
flows.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, effective for us on January 1, 2003. SFAS No. 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible fixed assets and the associated asset retirement costs.
The adoption of this standard has not had a significant impact on our results
of operations, financial condition or cash flows.

9



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003



|3. |  | Comprehensive (Loss) Income
|-- |  | ---------------------------

Consolidated comprehensive (loss) income for the three months ended September
30, 2003 and 2002 was £9.9 million (loss) and £10.6 million (income),
respectively. Consolidated comprehensive (loss) for the nine months ended
September 30, 2003 and 2002 was £56.8 million and £8.0 million, respectively.



|4. |  | Fixed assets
|-- |  | ------------

Fixed assets consists of (in £000s):

Estimated
    
    September 30,
    
    December 31,Useful Life
    
    2003
    
    2002Reorganized
    
    Predecessorcompany
    
    company(unaudited)Operating equipment
    
    5-30 years
    
    
    £370,355
    
    
    
    £771,778Other equipment
    
    5-30 years
    
    
    13,818
    
    
    
    24,575Construction in progress
    
    
    
    
    
    
    
    
    
    
    4,742384,173
    
    
    
    801,095Accumulated depreciation
    
    
    
    
    
    
    (34,685
    )
    
    
    (314,953
    )£349,488
    
    
    
    £486,142


The change in fixed assets is primarily the result of the £114.0 million
reduction in the carrying value upon the adoption of fresh-start reporting as
of January 1, 2003.



|5. |  | Intangible assets
|-- |  | -----------------

The change in intangible assets is primarily the result of the £66.6 million
increase in the carrying value of customer lists, the £66.6 million decrease in
the carrying value of goodwill, the £79.3 million increase in reorganization
value in excess of amounts allocable to identifiable assets and the £0.3
million decrease in the carrying value of franchise costs upon the adoption of
fresh-start reporting as of January 1, 2003. Customer lists are amortized on a
straight-line basis over approximately five years.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2002 is as follows: £12.6 million in 2003, £12.6
million in 2004, £12.6 million in 2005, £12.6 million in 2006 and £12.6 million
in 2007.

10



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003



|6. |  | Liabilities subject to compromise
|-- |  | ---------------------------------

Liabilities subject to compromise consist of (in £000s):

September 30,
    
    December 31,2003
    
    2002Reorganized
    
    Predecessorcompany
    
    company(unaudited)Diamond Cable:13 1/4% Senior Discount Notes
    
    
    £
    
    
    
    £177,13611 3/4% Senior Discount Notes
    
    
    
    
    
    
    329,88710 3/4% Senior Discount Notes
    
    
    
    
    
    
    261,262Diamond Holdings:10% Senior Sterling Notes
    
    
    
    
    
    
    135,0009 1/8% Senior Notes
    
    
    
    
    
    
    68,282Other30% Loan Note
    
    
    
    
    
    
    12,117Accrued interest
    
    
    
    
    
    
    45,738£
    
    
    
    £1,029,422


Upon emergence from Chapter 11 reorganization and in accordance with the Plan,
NTL acquired all of our outstanding public notes except for the Diamond
Holdings Notes. On February 4, 2003, NTL released us from any further
obligations to pay interest and/or principal on the Diamond Cable Notes. The
Diamond Holdings Notes remain outstanding.



|7. |  | Long-term debt
|-- |  | --------------

Long-term debt consists of the following Notes payable (in £000s):

September 30,
    
    December 31,2003
    
    2002Reorganized
    
    Predecessorcompany
    
    company(unaudited)10% Senior Sterling Notes, less
unamortized discount of £23,016 (2003)
    
    
    £111,984
    
    
    
    £9 1/8% Senior Notes, less
unamortized discount of £16,925 (2003)
    
    
    49,200
    
    
    
    Mortgage loan
    
    
    1,828
    
    
    
    1,960163,012
    
    
    
    1,960Less current portion
    
    
    (252
    )
    
    
    (1,960
    )£162,760
    
    
    
    £


11



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003



|8. |  | Related Party Transactions
|-- |  | --------------------------

On March 31, 2003, we entered into a loan agreement with NTL under which £10.0
million had been borrowed on April 2, 2003. On July 31, 2003, we borrowed a
further $16 million. Interest is payable on any and all outstanding principal
amounts from time to time from and including the date of the initial borrowing
until such principal amounts are paid in full. The initial interest rate is
8.0% or such other rate as may be agreed from time to time. The outstanding
principal and accrued and unpaid interest are payable upon demand, but are
subordinated to Diamond Holdings Senior Notes. NTL has indicated that it does
not intend to demand payment on the loan agreement prior to October 1, 2004.

Since NTL acquired us in March 1999, a subsidiary of NTL has been providing
infrastructure and management support services to us. Benefits include usage of
NTL network assets, network maintenance, marketing and shared overhead.
Additionally, in 2001 certain elements of our network operations and customer
operations were integrated with NTLs national and regional operations in order
for us to gain the advantage of NTLs scale.

The related charges, which began in the fourth quarter of 1999, represent our
portion of costs incurred by a subsidiary of NTL for the benefit of all UK
operations within NTL. These charges are made on the basis of an allocation
formula appropriate to each category of charge. We were charged £69.3 million,
and £70.5 million for the nine months ended September 30, 2003 and 2002,
respectively. For 2003, £25.8 million was included in operating costs and £43.5
million was included in selling, general and administrative expense. For 2002,
£28.4 million was included in operating costs and £42.1 million was included in
selling, general and administrative expense. It is not practicable to determine
the amount of these expenses that would have been incurred had we operated as
an unaffiliated entity. In the opinion of our management, the allocation method
is reasonable.

In the nine months ended September 30, 2003, we were also charged £0.8 million
representing our proportion of the costs of NTLs internal restructuring.
These costs included severance and other employee related costs. Restructuring
charges allocated to us by a subsidiary of NTL are made on the basis of an
allocation formula appropriate to each category of charge that is based on
managements judgement of a reasonable methodology given the facts and
circumstances.

As of September 30, 2003 and December 31, 2002, the due to affiliates balance
includes payments made to third parties on our behalf by a subsidiary of NTL.
We have reduced direct transactions with third parties as a result of our
continued integration with NTL. We have therefore had our liabilities to third
parties significantly reduced, with a rise in amounts due to affiliates. The
payments made on our behalf represent directly attributable expenses incurred
by us.



|9. |  | Commitments and Contingent Liabilities
|-- |  | --------------------------------------

As of September 30, 2003, we had no significant commercial commitments.

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



|10. |  | Condensed Consolidating Financial Statements
|--- |  | --------------------------------------------

On February 6, 1998, our subsidiary, Diamond Holdings, issued £135.0 million
principal amount of its 10% Senior Notes due February 1, 2008 and $109.9
million principal amount of its 9 1/8% Senior Notes due February 1, 2008
(together, the 1998 Notes). We have fully and unconditionally guaranteed the
1998 Notes as to principal, interest and other amounts due. We have no
independent operations and no subsidiaries other than Diamond Holdings. Diamond
Holdings is restricted in its ability to make funds available to us except for
funds to pay interest on our notes and £5.0 million annually. We present the
following condensed consolidating financial information as of September 30,
2003 and December 31, 2002 and for the three and nine months ended September
30, 2003, on January 1, 2003 and three and nine months ended September 30, 2002
as required by Article 3-10(c) of Regulation S-X.

12



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Three months ended September 30, 2003ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of operationsRevenue
    
    
    £
    
    
    
    £
    
    
    
    £46,659
    
    
    
    £
    
    
    
    £46,659Costs and expensesOperating costs
    
    
    
    
    
    
    
    
    
    
    (19,748
    )
    
    
    
    
    
    
    (19,748
    )Selling, general and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    (14,519
    )
    
    
    
    
    
    
    (14,519
    )Other charges
    
    
    
    
    
    
    
    
    
    
    (69
    )
    
    
    
    
    
    
    (69
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    (14,980
    )
    
    
    
    
    
    
    (14,980
    )
    
    
    
    
    
    
    
    (49,316
    )
    
    
    
    
    
    
    (49,316
    )Operating loss
    
    
    
    
    
    
    
    
    
    
    (2,657
    )
    
    
    
    
    
    
    (2,657
    )Other income (expense)Interest expense and amortization of
debt discount and expenses
    
    
    
    
    
    
    (7,448
    )
    
    
    (24
    )
    
    
    
    
    
    
    (7,472
    )Interest expense to affiliate
    
    
    (332
    )
    
    
    
    
    
    
    (5,061
    )
    
    
    5,061
    
    
    
    (332
    )Interest income
    
    
    346
    
    
    
    4,715
    
    
    
    45
    
    
    
    (5,061
    )
    
    
    45Exchange gains (losses)
    
    
    431
    
    
    
    (650
    )
    
    
    727
    
    
    
    
    
    
    
    508Equity in net loss of subsidiaries
    
    
    (10,353
    )
    
    
    (6,970
    )
    
    
    
    
    
    
    17,323
    
    
    
    Net (loss) income
    
    
    (£9,908
    )
    
    
    (£10,353
    )
    
    
    (£6,970
    )
    
    
    £17,323
    
    
    
    (£9,908
    )




Three months ended September 30, 2002ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of operationsRevenue
    
    
    £
    
    
    
    £
    
    
    
    £42,965
    
    
    
    £
    
    
    
    £42,965Costs and expensesOperating costs
    
    
    
    
    
    
    
    
    
    
    (21,354
    )
    
    
    
    
    
    
    (21,354
    )Selling, general and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    (13,698
    )
    
    
    
    
    
    
    (13,698
    )Other charges
    
    
    (1,175
    )
    
    
    (1,174
    )
    
    
    (577
    )
    
    
    
    
    
    
    (2,926
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    (14,873
    )
    
    
    
    
    
    
    (14,873
    )(1,175
    )
    
    
    (1,174
    )
    
    
    (50,502
    )
    
    
    
    
    
    
    (52,851
    )Operating loss
    
    
    (1,175
    )
    
    
    (1,174
    )
    
    
    (7,537
    )
    
    
    
    
    
    
    (9,886
    )Other income (expense)Interest expense and amortization of
debt discount and expenses
    
    
    (753
    )
    
    
    (5,061
    )
    
    
    (32,107
    )
    
    
    32,080
    
    
    
    (5,841
    )Interest expense to affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest income
    
    
    27,469
    
    
    
    4,611
    
    
    
    164
    
    
    
    (32,080
    )
    
    
    164Exchange gains (losses)
    
    
    (1,975
    )
    
    
    (7
    )
    
    
    28,143
    
    
    
    
    
    
    
    26,161Equity in net loss of subsidiaries
    
    
    (12,968
    )
    
    
    (11,337
    )
    
    
    
    
    
    
    24,305
    
    
    
    Net (loss) income
    
    
    £10,598
    
    
    
    (£12,968
    )
    
    
    (£11,337
    )
    
    
    £24,305
    
    
    
    £10,598


13



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Nine months ended September 30, 2003ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of operationsRevenue
    
    
    £
    
    
    
    £
    
    
    
    £138,114
    
    
    
    £
    
    
    
    £138,114Costs and expensesOperating costs
    
    
    
    
    
    
    
    
    
    
    (60,885
    )
    
    
    
    
    
    
    (60,885
    )Selling, general and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    (43,524
    )
    
    
    
    
    
    
    (43,524
    )Other charges
    
    
    
    
    
    
    
    
    
    
    (847
    )
    
    
    
    
    
    
    (847
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    (44,106
    )
    
    
    
    
    
    
    (44,106
    )
    
    
    
    
    
    
    
    (149,362
    )
    
    
    
    
    
    
    (149,362
    )Operating loss
    
    
    
    
    
    
    
    
    
    
    (11,248
    )
    
    
    
    
    
    
    (11,248
    )Other income (expense)Interest expense and amortization of
debt discount and expenses
    
    
    
    
    
    
    (22,353
    )
    
    
    (75
    )
    
    
    
    
    
    
    (22,428
    )Interest expense to affiliate
    
    
    (29,811
    )
    
    
    
    
    
    
    (17,881
    )
    
    
    17,881
    
    
    
    (29,811
    )Interest income
    
    
    3,799
    
    
    
    14,082
    
    
    
    110
    
    
    
    (17,881
    )
    
    
    110Exchange gains (losses)
    
    
    5,022
    
    
    
    16
    
    
    
    1,579
    
    
    
    
    
    
    
    6,617Equity in net loss of subsidiaries
    
    
    (35,770
    )
    
    
    (27,515
    )
    
    
    
    
    
    
    63,285
    
    
    
    Net (loss) income
    
    
    (£56,760
    )
    
    
    (£35,770
    )
    
    
    (£27,515
    )
    
    
    £63,285
    
    
    
    (£56,760
    )




Nine months ended September 30, 2002ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of operationsRevenue
    
    
    £
    
    
    
    £
    
    
    
    £133,161
    
    
    
    £
    
    
    
    £133,161Costs and expensesOperating costs
    
    
    
    
    
    
    
    
    
    
    (66,290
    )
    
    
    
    
    
    
    (66,290
    )Selling, general and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    (42,087
    )
    
    
    
    
    
    
    (42,087
    )Other charges
    
    
    (1,190
    )
    
    
    (1,189
    )
    
    
    (577
    )
    
    
    
    
    
    
    (2,956
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    (45,938
    )
    
    
    
    
    
    
    (45,938
    )(1,190
    )
    
    
    (1,189
    )
    
    
    (154,892
    )
    
    
    
    
    
    
    (157,271
    )Operating loss
    
    
    (1,190
    )
    
    
    (1,189
    )
    
    
    (21,731
    )
    
    
    
    
    
    
    (24,110
    )Other income (expense)Interest expense and amortization of
debt discount and expenses
    
    
    (38,083
    )
    
    
    (15,618
    )
    
    
    (100,680
    )
    
    
    100,562
    
    
    
    (53,819
    )Interest expense to affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest income
    
    
    86,428
    
    
    
    14,134
    
    
    
    345
    
    
    
    (100,562
    )
    
    
    345Exchange gains (losses)
    
    
    (5,314
    )
    
    
    (10
    )
    
    
    74,882
    
    
    
    
    
    
    
    69,558Equity in net loss of subsidiaries
    
    
    (49,867
    )
    
    
    (47,184
    )
    
    
    
    
    
    
    97,051
    
    
    
    Net (loss) income
    
    
    (£8,026
    )
    
    
    (£49,867
    )
    
    
    (£47,184
    )
    
    
    £97,051
    
    
    
    (£8,026
    )


14



---



##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

January 1, 2003ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of operationsInterest expense to affiliate
    
    
    (£59,850
    )
    
    
    £
    
    
    
    £
    
    
    
    £
    
    
    
    (£59,850
    )Fresh start adoption
    
    
    676,092
    
    
    
    47,441
    
    
    
    (35,105
    )
    
    
    
    
    
    
    688,428Equity in net loss of subsidiaries
    
    
    12,336
    
    
    
    (35,105
    )
    
    
    
    
    
    
    22,769
    
    
    
    Net income (loss)
    
    
    £628,578
    
    
    
    £12,336
    
    
    
    (£35,105
    )
    
    
    £22,769
    
    
    
    £628,578




---

September 30, 2003ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Balance sheetCurrent assets
    
    
    £
    
    
    
    £
    
    
    
    £20,013
    
    
    
    £
    
    
    
    £20,013Investments in and advances to
subsidiaries
    
    
    316,060
    
    
    
    457,680
    
    
    
    
    
    
    
    (773,740
    )
    
    
    Fixed and non current assets
    
    
    
    
    
    
    2,997
    
    
    
    485,890
    
    
    
    
    
    
    
    488,887£316,060
    
    
    
    £460,677
    
    
    
    £505,903
    
    
    
    (£773,740
    )
    
    
    £508,900Current liabilities
    
    
    £526
    
    
    
    £3,256
    
    
    
    £26,824
    
    
    
    £
    
    
    
    £30,606Long-term debt
    
    
    
    
    
    
    161,184
    
    
    
    1,576
    
    
    
    
    
    
    
    162,760Due to affiliates
    
    
    19,607
    
    
    
    
    
    
    
    206,588
    
    
    
    (206,588
    )
    
    
    19,607Deferred income taxes
    
    
    921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    921Shareholders equity (deficiency)
    
    
    295,006
    
    
    
    296,237
    
    
    
    270,915
    
    
    
    (567,152
    )
    
    
    295,006Total liabilities and
shareholders equity (deficiency)
    
    
    £316,060
    
    
    
    £460,677
    
    
    
    £505,903
    
    
    
    (£773,740
    )
    
    
    £508,900


15



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

December 31, 2002ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(in £'000s)Balance sheetCurrent assets
    
    
    £238
    
    
    
    £239
    
    
    
    £28,141
    
    
    
    £
    
    
    
    £28,618Investments in and advances to subsidiaries
    
    
    315,549
    
    
    
    (468,266
    )
    
    
    
    
    
    
    152,717
    
    
    
    Fixed and non current assets
    
    
    6,169
    
    
    
    3,515
    
    
    
    553,105
    
    
    
    
    
    
    
    562,789£321,956
    
    
    
    (£464,512
    )
    
    
    £581,246
    
    
    
    £152,717
    
    
    
    £591,407Current liabilities
    
    
    £
    
    
    
    £
    
    
    
    £47,682
    
    
    
    £
    
    
    
    £47,682Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Due to affiliates
    
    
    
    
    
    
    
    
    
    
    1,206,489
    
    
    
    (1,206,489
    )
    
    
    Liabilities subject to compromise
    
    
    807,653
    
    
    
    221,769
    
    
    
    
    
    
    
    
    
    
    
    1,029,422Deferred income taxes
    
    
    921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    921Shareholders equity (deficiency)
    
    
    (486,618
    )
    
    
    (686,281
    )
    
    
    (672,925
    )
    
    
    1,359,206
    
    
    
    (486,618
    )Total liabilities and
shareholders equity (deficiency)
    
    
    £321,956
    
    
    
    (£464,512
    )
    
    
    £581,246
    
    
    
    £152,717
    
    
    
    £591,407




---

Nine months ended September 30, 2003ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of cash flowsNet cash (used in) provided by
operating activities
    
    
    £
    
    
    
    (£30,068
    )
    
    
    (£6,103
    )
    
    
    £20,005
    
    
    
    (£16,166
    )Investing activities:(Advances to) repayments from subsidiaries, net
    
    
    (19,993
    )
    
    
    10,075
    
    
    
    
    
    
    
    9,918
    
    
    
    Purchases of fixed assets
    
    
    
    
    
    
    
    
    
    
    (12,528
    )
    
    
    
    
    
    
    (12,528
    )Net cash provided by (used in)
investing activities
    
    
    (19,993
    )
    
    
    10,075
    
    
    
    (12,528
    )
    
    
    9,918
    
    
    
    (12,528
    )Financing activities:Principal payments
    
    
    
    
    
    
    
    
    
    
    (132
    )
    
    
    
    
    
    
    (132
    )Loans from affiliate
    
    
    19,923
    
    
    
    19,923
    
    
    
    10,000
    
    
    
    (29,923
    )
    
    
    19,923Net cash provided by (used in)
financing activities
    
    
    19,923
    
    
    
    19,923
    
    
    
    9,868
    
    
    
    (29,923
    )
    
    
    19,791Decrease in cash and cash equivalents
    
    
    (70
    )
    
    
    (70
    )
    
    
    (8,763
    )
    
    
    
    
    
    
    (8,903
    )Cash and cash equivalents at beginning of period
    
    
    70
    
    
    
    70
    
    
    
    12,028
    
    
    
    
    
    
    
    12,168Cash and cash equivalents at end of period
    
    
    £
    
    
    
    £
    
    
    
    £3,265
    
    
    
    £
    
    
    
    £3,265


16



---



##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Nine months ended September 30, 2002ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of cash flowsNet cash (used in) provided by
operating activities
    
    
    (£13,246
    )
    
    
    (£10,568
    )
    
    
    £25,937
    
    
    
    £10,853
    
    
    
    £12,976Investing activities:(Advances to) repayments from subsidiaries, net
    
    
    215
    
    
    
    10,568
    
    
    
    
    
    
    
    (10,783
    )
    
    
    Purchases of fixed assets
    
    
    
    
    
    
    
    
    
    
    (16,717
    )
    
    
    
    
    
    
    (16,717
    )Proceeds from disposition of fixed assets
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    31Net cash provided by (used in)
investing activities
    
    
    215
    
    
    
    10,568
    
    
    
    (16,686
    )
    
    
    (10,783
    )
    
    
    (16,686
    )Financing activities:Principal payments
    
    
    
    
    
    
    
    
    
    
    (218
    )
    
    
    
    
    
    
    (218
    )Capital lease payments
    
    
    
    
    
    
    
    
    
    
    (476
    )
    
    
    
    
    
    
    (476
    )Loans from affiliate
    
    
    12,961
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,961Contributions from NTL Communications Corp.
    
    
    140
    
    
    
    70
    
    
    
    
    
    
    
    (70
    )
    
    
    140Net cash provided by (used in)
financing activities
    
    
    13,101
    
    
    
    70
    
    
    
    (694
    )
    
    
    (70
    )
    
    
    12,407Increase in cash and cash equivalents
    
    
    70
    
    
    
    70
    
    
    
    8,557
    
    
    
    
    
    
    
    8,697Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    
    
    
    
    4,535
    
    
    
    
    
    
    
    4,535Cash and cash equivalents at end of period
    
    
    £70
    
    
    
    £70
    
    
    
    £13,092
    
    
    
    £
    
    
    
    £13,232


January 1, 2003ConsolidatedDiamond
    
    Diamond
    
    
    
    
    
    
    
    
    
    DiamondCable
    
    Holdings
    
    Subsidiaries
    
    Adjustments
    
    Cable(unaudited) (in £'000s)Statement of cash flowsNet cash (used in) provided by
operating activities
    
    
    £
    
    
    
    £
    
    
    
    £
    
    
    
    £
    
    
    
    £Investing activities:Net cash provided by (used in)
investing activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Financing activities:Net cash provided by (used in)
financing activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Decrease) increase in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at beginning of period
    
    
    70
    
    
    
    70
    
    
    
    12,028
    
    
    
    
    
    
    
    12,168Cash and cash equivalents at end of period
    
    
    £70
    
    
    
    £70
    
    
    
    £12,028
    
    
    
    £
    
    
    
    £12,168


17



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Overview

We are a limited company incorporated under the laws of England and Wales. We
are the holding company of subsidiaries that offer broadband and communications
services providing telephone, cable television and Internet services to the
home, as well as data, voice and Internet services to businesses in the
Leicestershire and Nottinghamshire regions of the UK. These interests are held
through our subsidiary, Diamond Holdings Limited. We are a wholly owned
subsidiary of NTL Incorporated, or NTL, and we are reliant upon the support of
NTL and its subsidiaries to continue our operations.

Selected Operating Data

We set forth in the following table certain data concerning our franchises at
September 30, 2003 and December 31, 2002:

September 30,
    
    December 31,2003
    
    2002Homes passed (1)
    
    
    794,000
    
    
    
    794,000Homes marketed (2)
    
    
    701,006
    
    
    
    712,600Total customers (4)
    
    
    343,405
    
    
    
    331,553Digital cable subscribers
    
    
    113,487
    
    
    
    107,877Analog cable subscribers
    
    
    77,465
    
    
    
    87,819Broadband Internet subscribers
    
    
    125,398
    
    
    
    75,826Dial-up Internet subscribers
    
    
    66,657
    
    
    
    80,198Telephone subscribers
    
    
    315,956
    
    
    
    309,462Penetration (homes marketed) (3)
    
    
    49.0
    %
    
    
    46.5
    %Annualized Churn
    
    
    12.6
    %
    
    
    15.6
    %




| |  | 
| |  | 



| |  | (1) | Homes passed is the number of homes that have had ducting buried outside.
| |  | --- | -------------------------------------------------------------------------



| |  | (2) | Homes marketed is the number of homes for which the initial marketing
phase (including door to door direct marketing) has been completed. Homes
marketed at September 30, 2003 reflects an ongoing data cleansing
exercise.
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (3) | Penetration rate is calculated by dividing the number of total customers
by the number of homes marketed.
| |  | --- | ---------------------------------------------------------------------------------------------------------



| |  | (4) | Total customers at December 31, 2002 have been restated to include Master
Antenna Television (MATV) customers.
| |  | --- | --------------------------------------------------------------------------------------------------------------

Results of Operations

We derive our revenue principally from monthly fees and usage charges. Our
packaging of services and pricing are designed to encourage our customers to
use multiple services like dual telephone and broadband, dual telephone and
television or triple telephone, television and Internet access.

The
principal components of our operating and selling, general and administrative expenses include (1) payroll and other employee related costs; (2) interconnection
costs paid to other carriers related to telephone services; (3) television
programming costs; (4) marketing and selling costs; (5) repairs
and maintenance; (6) facility related costs, such as rent, utilities and rates;  and (7) provisions for bad debt. A
significant portion of our operating costs and all of our selling, general and
administrative expenses are charged to us by a subsidiary of NTL. These charges
include costs for the provision of network services and support, the use of
NTLs national backbone telephony network for carriage of our telephony traffic, as
well as the provision of technical infrastructure and network capacity by NTL
for our subscription Internet service and digital cable services, the provision
of corporate services, including finance, legal, human resources and facility
services, and for the provision of IT services, including our use of the
related IT equipment.

18



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

We continue to focus on improving our customer service and increasing our
service offering to customers in an effort to curtail and control churn. NTL
is in the process of integrating its various billing systems and customer
databases in an effort to improve one of the main tools it uses to provide
customer service. This effort is at a relatively early stage although NTL has
continued to make progress through September 30, 2003. Although the new system
does not yet support NTLs full suite of services, NTL expects to complete the
project substantially by late 2004. The total project cost is estimated to be
approximately £75 million, of which NTL has incurred £46 million through
September 30, 2003. If the integration is not successful, we could experience
an adverse effect on our customer service, our churn rate and our share of the
costs of maintaining these systems going forward. We could also experience
operational failures related to billing and collecting revenue from our
customers, which, depending upon on the severity of the failure, could have a
material adverse effect on our business.

Our
plan to control churn and to increase average revenue per customer,
referred to as ARPU, includes an increase in broadband services to our
existing customers. We believe that our triple play offering of telephony,
broadband access to the Internet and digital television will continue to prove
attractive to our existing customer base, which will result in higher ARPU as
revenues per existing customer increase. However, there is still significant
competition in our markets, through digital satellite and digital terrestrial
television and through alternative Internet access media, such as DSL offered
by BT. If in the future we are unable to charge the prices for these services
that we anticipate in our business plan in response to competition or if our
competition is able to attract our customers, our results of operations will be
adversely affected.

Three months ended September 30, 2003 and 2002

We present below summarized consolidated financial information for the three
months ended September 30, (in £000s, NM denotes percentage is not
meaningful):

Three months endedSeptember 30,
    
    Increase (decrease)2003
    
    2002
    
    £
    
    %Revenues
    
    
    £46,659
    
    
    
    £42,965
    
    
    
    3,694
    
    
    
    8.6Operating costs
    
    
    (19,748
    )
    
    
    (21,354
    )
    
    
    (1,606
    )
    
    
    (7.5
    )Selling, general
and administrative
expenses
    
    
    (14,519
    )
    
    
    (13,698
    )
    
    
    821
    
    
    
    6.0Other charges
    
    
    (69
    )
    
    
    (2,926
    )
    
    
    (2,857
    )
    
    
    (97.6
    )Depreciation and
amortization
    
    
    (14,980
    )
    
    
    (14,873
    )
    
    
    107
    
    
    
    0.7Operating loss
    
    
    (2,657
    )
    
    
    (9,886
    )
    
    
    (7,229
    )
    
    
    (73.1
    )Interest expense
    
    
    (7,472
    )
    
    
    (5,841
    )
    
    
    1,631
    
    
    
    27.9Interest expense to
affiliate
    
    
    (332
    )
    
    
    
    
    
    
    332
    
    
    NMInterest income
    
    
    45
    
    
    
    164
    
    
    
    (119
    )
    
    
    (72.6
    )Exchange gains
    
    
    508
    
    
    
    26,161
    
    
    
    (25,653
    )
    
    
    (98.1
    )Net (loss) income
    
    
    (£9,908
    )
    
    
    £10,598
    
    
    
    (20,506
    )
    
    
    (193.5
    )


Between 2002 and 2003 we have introduced a number of price increases including
the introduction of charges for our dial-up Internet service (which was
previously available without charge) resulting in an improvement in our
revenues. Furthermore, we have sold additional services to our existing
customers and gained more broadband subscribers. We expect revenue increases
in the future to be achieved by further growth in services such as digital
television and broadband services.

19



---



##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Over the respective periods, we have seen a reduction in our operating costs.
We have benefited from the efficiencies that NTL has gained in the network and
negotiated reductions in the costs of interconnection and television
programming. Our operating costs include certain costs that are charged by a
subsidiary of NTL for the provision of network services and support, the use of
NTLs national backbone telephony network for carriage of our telephony
traffic, as well as the provision of technical infrastructure and network
capacity by NTL for our subscription Internet service and digital cable
services. In the three months ended September 30, 2003 and 2002, we were
charged £8.3 million and £8.7 million, respectively for these services.

Our selling, general and administrative expenses include certain costs that are
charged by a subsidiary of NTL for the provision of corporate services,
including finance, legal, human resources and facility services, and for the
provision of IT services, including our use of the related IT equipment. In the
three months ended September 30, 2003 and 2002, we were charged £14.5 million
and £13.7 million, respectively, for these services.

Other charges of £69,000 in 2003 were allocated to us by a subsidiary of NTL
and include employee severance and related costs. Other charges of £2.9
million in 2002 include recapitalization items of £2.4 million incurred in
connection with the reorganization under Chapter 11 and £577,000 of costs
related to NTLs restructuring of operations.

In accordance with SOP 90-7, we adopted fresh-start reporting on January 1,
2003. We engaged an independent financial advisor to assist in the
determination of the reorganization value (or fair value) of our assets. This
determination resulted in the fresh-start reporting adjustments to write-down
fixed assets and write-up intangible assets to their fair values.
Consequently, depreciation is charged on the revised fair value of the fixed
assets over the remaining useful economic life at January 1, 2003. In
addition, we are amortizing the fair value of our customer lists over
approximately five years.

Interest expense in the current period represents the interest we incur on
Diamond Holdings Senior Notes, our mortgage loan and the amortization of the
difference between the principal amount of the Senior Notes and their fair
value adopted on January 1, 2003. On emergence from Chapter 11, NTL acquired
our outstanding Discount Notes and subsequently released us from any further
obligation to pay interest and/or principal on February 4, 2003. Accordingly,
we recorded no interest on our Discount Notes in the three months ended
September 30, 2003. In the comparative period, interest expense includes only
interest on Diamond Holdings Senior Notes and the mortgage loan. In accordance
with the Plan and SOP 90-7, beginning May 8, 2002, we discontinued accruing
interest on our Discount Notes. 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 proceedings or that it is probable that it will be an allowed
priority, secured or unsecured claim.

Interest expense to affiliate relates to the interest charged on the
outstanding amounts borrowed under the loan agreement with NTL.

A substantial portion of our existing debt obligations are denominated in U.S.
dollars, while our revenues and expenses are generated and stated in UK pounds
sterling. During the three months ended September 30, 2003 and 2002, we
recognized net foreign exchange gains of £0.5 million and £26.2 million,
respectively, primarily owing to the unrealized gains on translation of our
Discount Notes and Diamond Holdings 9 1/8% Senior Notes. Changes in foreign
currency exchange rates may affect our ability to satisfy our obligations under
these debt instruments as they become due.

20



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Nine months ended September 30, 2003 and 2002

We present below summarized consolidated financial information for the nine
months ended September 30, (in £000s, NM denotes percentage is not
meaningful):

Nine months endedSeptember 30,
    
    Increase (decrease)2003
    
    2002
    
    £
    
    %Revenues
    
    
    £138,114
    
    
    
    £133,161
    
    
    
    4,953
    
    
    
    3.7Operating costs
    
    
    (60,885
    )
    
    
    (66,290
    )
    
    
    (5,405
    )
    
    
    (8.2
    )Selling, general
and administrative
expenses
    
    
    (43,524
    )
    
    
    (42,087
    )
    
    
    1,437
    
    
    
    3.4Other charges
    
    
    (847
    )
    
    
    (2,956
    )
    
    
    (2,109
    )
    
    
    (71.3
    )Depreciation and
amortization
    
    
    (44,106
    )
    
    
    (45,938
    )
    
    
    (1,832
    )
    
    
    (4.0
    )Operating loss
    
    
    (11,248
    )
    
    
    (24,110
    )
    
    
    (12,862
    )
    
    
    (53.3
    )Interest expense
    
    
    (22,428
    )
    
    
    (53,819
    )
    
    
    (31,391
    )
    
    
    (58.3
    )Interest expense to
affiliate
    
    
    (29,811
    )
    
    
    
    
    
    
    29,811
    
    
    NMInterest income
    
    
    110
    
    
    
    345
    
    
    
    (235
    )
    
    
    (68.1
    )Exchange gains
    
    
    6,617
    
    
    
    69,558
    
    
    
    (62,941
    )
    
    
    (90.5
    )Net loss
    
    
    (£56,760
    )
    
    
    (£8,026
    )
    
    
    48,734
    
    
    
    607.2


Between 2002 and 2003 we have introduced a number of price increases including
the introduction of charges for our dial-up Internet service, which was
previously available without charge, resulting in an improvement in our
revenues. Furthermore, we have sold additional services to our existing
customers and gained more broadband subscribers. We expect revenue increases
in the future to be achieved by further growth in services such as digital
television and broadband services.

Over the respective periods, we have seen a reduction in our operating costs.
We have benefited from the efficiencies that NTL has gained in the network and
negotiated reductions in the costs of interconnection and television
programming. Our operating costs include certain costs that are charged by a
subsidiary of NTL for the provision of network services and support, the use of
NTLs national backbone telephony network for carriage of our telephony
traffic, as well as the provision of technical infrastructure and network
capacity by NTL for our subscription Internet service and digital cable
services. In the nine months ended September 30, 2003 and 2002, we were charged
£25.8 million and £28.4 million, respectively for these services.

Our selling, general and administrative expenses include certain costs that are
charged by a subsidiary of NTL for the provision of corporate services,
including finance, legal, human resources and facility services, and for the
provision of IT services, including our use of the related IT equipment. In the
nine months ended September 30, 2003 and 2002, we were charged £43.5 million
and £42.1 million, respectively, for these services.

Other charges of £847,000 in 2003 were allocated to us by a subsidiary of NTL
and include employee severance and related costs. Other charges of £3.0 million
in 2002 include recapitalization items of £2.4 million incurred in connection
with the reorganization under Chapter 11 and £577,000 of costs related to NTLs
restructuring of operations.

In accordance with SOP 90-7, we adopted fresh-start reporting on January 1,
2003. We engaged an independent financial advisor to assist in the
determination of the reorganization value (or fair value) of our assets. This
determination resulted in the fresh-start reporting adjustments to write-down
fixed assets and write-up intangible assets to their fair values.

Consequently, depreciation is charged on the revised fair value of the fixed
assets over the remaining useful economic life at January 1, 2003. In
addition, we are amortizing the fair value of our customer lists over
approximately five years.

Interest expense in the current period represents the interest we incur on
Diamond Holdings Senior Notes, our mortgage loan and the amortization of the
difference between the principal amount of the Senior Notes and their fair
value adopted on January 1, 2003. On emergence from Chapter 11, NTL acquired
our outstanding Discount Notes and subsequently released us from any further
obligation to pay interest and/or principal on February 4, 2003. Accordingly,
we have included interest to February 4, 2003 on our Discount Notes and
amortization of the difference between the principal amount of our Discount
Notes and their fair value adopted on January 1, 2003 within interest payable
to affiliates in the nine months ended September 30, 2003. In the comparative
period, interest expense includes interest on our Discount Notes to May 8,
2002. In accordance with the Plan and SOP 90-7, beginning May 8, 2002 we
discontinued accruing interest on our Discount Notes. 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 proceedings or that it is probable that it will
be an allowed priority, secured or unsecured claim.

21



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Interest expense to affiliate relates to the interest charged on the
outstanding amounts borrowed under the loan agreement with NTL and the interest
to February 4, 2003 on our Discount Notes and amortization of the difference
between the principal amount of our Discount Notes and their fair value adopted
on January 1, 2003.

A substantial portion of our existing debt obligations are denominated in U.S.
dollars, while our revenues and expenses are generated and stated in UK pounds
sterling. During the nine months ended September 30, 2003 and 2002, we
recognized net foreign exchange gains of £6.6 million and £69.6 million,
respectively, primarily owing to the unrealized gains on translation of our
Discount Notes and Diamond Holdings 9 1/8% Senior Notes. Changes in foreign
currency exchange rates may affect our ability to satisfy our obligations under
these debt instruments as they become due.

Condensed Consolidated Statements of Cash Flows

We used £16.2 million in cash for our operating activities in the nine months
ended September 30, 2003. This was principally owing to the payment that we
made on emergence from Chapter 11 of the outstanding interest due August 1,
2002, on Diamond Holdings Senior Notes. This interest had accrued from
February 1, 2002.

In the nine months ended September 30, 2003, we spent £12.5 million on fixed
asset purchases, including connecting new customers to our networks.

In the nine months ended September 30, 2003, we received £19.9 million from
NTL. We also made payments on our mortgage loan of £0.1 million as and when
they fell due. In the prior period, we received £13.1 million from our parent
company and made payments totaling £0.7 million on our mortgage loan and
capital leases.

Liquidity and Capital Resources

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 are reliant on the support of NTL
and its subsidiaries to continue our operations.

Although we currently expect that our cash from operations will be sufficient
to fund our working capital including our capital expenditures and debt service
requirements in the twelve months from October 1, 2003 to September 30, 2004,
we expect to require additional cash owing to the timing of our cash flows. We
believe that cash and cash equivalents on hand at September 30, 2003 and cash
from NTL will be sufficient for our cash requirements during the twelve months
from October 1, 2003 to September 30, 2004.

Over the long term, we will continue to require cash to fund our operations,
service or repay our remaining debt and implement our strategy. In order to
fund these requirements, we anticipate that we will use cash flow from our
operations and may also need to issue additional debt or equity securities or
may need to secure bank financing. Given the restrictions on incurring
additional debt that are in the indentures governing our outstanding notes,
there can be no assurance that these sources of funds will be available to us.

22



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Description of Indebtedness

Loan Note payable to NTL Incorporated

On March 31, 2003, we entered into a loan agreement with NTL under which £10.0
million had been borrowed on April 2, 2003. On July 31, 2003, we borrowed a
further $16 million. Interest is payable on any and all outstanding principal
amounts from time to time from and including the date of the initial borrowing
until such principal amounts are paid in full. The initial interest rate is
8.0% or such other rate as may be agreed from time to time. The outstanding
principal and accrued and unpaid interest are payable upon demand, but
subordinated to the Diamond Holdings Senior Notes. NTL has indicated that it
does not intend to demand payment on the loan agreement prior to October 1,
2004.

Diamond Holdings Senior Notes

In February 1998, Diamond Holdings issued 10% Senior Notes due February 1, 2008
and 9 1/8% Senior Notes due February 1, 2008, collectively
referred to as the Senior
Notes. We have guaranteed the Senior Notes as to payment of principal,
interest and any other amounts due. In connection with the issuance of the
Senior Notes, we terminated our existing bank facility. The Senior Notes are
redeemable at Diamond Holdings option on or after February 1, 2003.

As of September 30, 2003, Diamond Holdings has £135.0 million in principal
amount of its 10% Senior Notes due February 1, 2008 and $109.9 million in
principal amount of its 9 1/8% Senior Notes due February 1, 2008 outstanding.
Interest on these notes is payable semiannually on February 1 and August 1. The
Senior Notes are redeemable at Diamond Holdings option on or after February 1,
2003.

Upon consummation of the Plan on January 10, 2003, the Senior Notes were
reinstated and accrued interest due but not paid on August 1,
2002 was paid,
with accrued interest thereon.

Contractual Obligations and Commercial Commitments

We had no significant commercial commitments as of September 30, 2003.

The following table includes aggregate information about our contractual
obligations as of September 30, 2003 and the periods in which payments are due.
The following table excludes the repayment of the amounts borrowed under the
loan agreement with NTL of £19.6 million as of September 30, 2003 because the
loans do not have a definite due date.

Payments due by periodLess than
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    1 year
    
    1-3 years
    
    4-5 years
    
    5 yearsContractual obligationsLong-term debt
    
    
    £203.0
    
    
    
    £0.3
    
    
    
    £0.5
    
    
    
    £201.6
    
    
    
    £0.6Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unconditional purchase obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other long-term obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    
    £203.0
    
    
    
    £0.3
    
    
    
    £0.5
    
    
    
    £201.6
    
    
    
    £0.6


NTLs Completed Restructuring

On May 8, 2002, NTL (then known as NTL Communications Corp.), NTL Europe, Inc.
(then known as NTL Incorporated and the former parent company of NTL
Communications Corp.) and certain of their subsidiaries, including us and
Diamond Holdings, filed a pre-arranged joint reorganization plan, referred to
in this Report as the Plan, under Chapter 11 of the US Bankruptcy Code. Our
operating subsidiaries were not included in the Chapter 11 filing, nor were the
other operating subsidiaries of NTL and NTL Europe. Also on May 8, 2002,
Diamond Holdings and we filed proceedings for Administration in England. The Plan became effective on January 10, 2003, at which time NTL,
Diamond Holdings and we, emerged from Chapter 11 reorganization and
administration.

23



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Pursuant to the Plan, NTL Europe and its subsidiaries and affiliates were split
into two separate groups, and NTL and NTL Europe each emerged as independent
public companies. NTL became the holding company for NTL Europes principal UK
and Ireland assets, and NTL Europe became the holding company for its
continental European and certain other assets. We are no longer affiliated with
NTL Europe.

Upon consummation of the Plan on January 10, 2003:



| |  |  | Our 13-1/4% Senior Discount Notes due 2004, 11-3/4% Senior Discount
Notes due 2005 and 10-3/4% Senior Discount Notes due 2007 were acquired
by NTL and the former holders of these Senior Discount Notes were issued
shares of common stock of NTL. Subsequently on February 4, 2003, we were
released from any further obligations to pay interest and/or principal
on such notes.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Senior Notes issued by Diamond Holdings were reinstated and
accrued interest due but not paid on August 1, 2002 was paid (with
accrued interest thereon).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our 30% Loan Notes were cancelled in exchange for the issuance to NTL
of one of our ordinary shares.
| | - |  | ----------------------------------------------------------------------------------------------------

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 our
former ultimate parent company, NTL Europe and its subsidiaries, including us,
to access those markets as well as its ability to obtain financing from its
bank lenders and equipment suppliers became severely restricted. In addition,
NTL Europe and its subsidiaries, including us, had no further funds available,
or were unable to draw upon funds under their credit facilities. As a result of
these factors, together with its substantial leverage, on January 31, 2002, NTL
Europe 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, NTL Europe commenced negotiations with a steering
committee of the unofficial committee of its bondholders and the committees
legal and financial advisors.

NTL Europe and its subsidiaries, including us, failed to make interest payments
on some of our and their outstanding notes starting on April 1, 2002. NTL
Europe 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, NTL Europe announced that it and the unofficial committee of
its bondholders had reached an agreement in principle on a comprehensive
recapitalization of the NTL Europe group. To implement the proposed
recapitalization plan, on May 8, 2002, we, Diamond Holdings, NTL, NTL Europe
and another of its subsidiaries, collectively referred to in this report as the
Debtors, filed cases and a pre-arranged joint reorganization plan under Chapter
11 of the US 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
NTL with up to $500 million in new debt financing.

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

The Bankruptcy Court confirmed the Plan on September 5, 2002. During the fall
of 2002, NTL Europe 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 NTL and its subsidiaries, including us. The Plan
became effective on January 10, 2003, or the Effective Date, at
which time the Debtors emerged from Chapter 11 reorganization. In connection
with its emergence from
Chapter 11 reorganization, NTL and certain of its subsidiaries issued $558.249
million aggregate principal face amount of 19% Senior Secured Notes
due 2010, or the Exit Notes, on January 10, 2003. Initial purchasers of the Exit Notes also
purchased 500,000 shares of NTLs common stock on that date. The gross
proceeds from the sale of the Exit Notes and such shares totaled $500 million.
The proceeds were used in part to repay all amounts outstanding under the DIP
facility (which was repaid on the Effective Date) and to purchase from NTL
(Delaware), Inc. a £90 million note of NTL (UK) Group Inc. and to repay certain
other obligations. Also on January 10, 2003, NTL and its lending banks amended
its existing credit facilities.

24



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Fresh start reporting

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

The emergence from Chapter 11 and the adoption of fresh-start reporting as of
January 1, 2003 resulted in the following items of income (expense) that were
recognized on that date (in £000s):

January 1,2003PredecessorcompanyInterest expense to affiliate
    
    
    (£59,850
    )Fresh-start adoption  intangible assets
    
    
    78,860Fresh-start adoption  long-term debt
    
    
    723,533Fresh-start adoption  fixed assets
    
    
    (113,965
    )Net income
    
    
    £628,578


25



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Various statements contained herein constitute forward-looking statements as
that term is defined under the Private Securities Litigation Reform Act of
1995. When used herein, the words believe, anticipate, should, intend,
plan, will, expects, estimates, projects, positioned, strategy,
and similar expressions identify these forward-looking statements. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or achievements or
industry results to be materially different from those contemplated, projected,
forecasted, estimated or budgeted, whether expressed or implied, by these
forward-looking statements. These factors include those set forth under the
caption Risk Factors in NTLs Form 8-K filed on November 3, 2003, for example:



| |  |  | potential adverse developments with respect to NTLs and our liquidity
or results of operations;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | NTLs significant debt payments
commencing in 2005 and its and our other
contractual commitments coming due over the next several years;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NTLs and our ability to fund and execute its and our business plan;
| | - |  | --------------------------------------------------------------------



| |  |  | the impact of new business opportunities requiring significant
up-front investments;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | our ability to attract and retain customers, increase our overall
market penetration and react to competition from providers of
alternative services;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | NTLs ability to integrate its billing systems;
| | - |  | -----------------------------------------------



| |  |  | NTLs significant management changes;
| | - |  | -------------------------------------



| |  |  | NTLs and our ability to develop and maintain back-up for its critical
systems;
| | - |  | -------------------------------------------------------------------------------



| |  |  | our ability to respond adequately to technological developments;
| | - |  | ----------------------------------------------------------------



| |  |  | NTLs and our ability to maintain contracts that are critical to our
operations;
| | - |  | --------------------------------------------------------------------------------



| |  |  | our ability to continue to design networks, install facilities,
obtain and maintain any required governmental licenses or approvals and
finance construction and development, in a timely manner at reasonable
costs and on satisfactory terms and conditions;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | interest rate and currency exchange rate fluctuations;
| | - |  | ------------------------------------------------------



| |  |  | the impact of NTLs recent reorganization and subsequent
organizational restructuring; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | risks related to NTLs rights offering.
| | - |  | ---------------------------------------

We assume no obligation to update the forward-looking statements contained
herein to reflect actual results, changes in assumptions or changes in factors
affecting these statements.

26



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Recent Accounting Pronouncements

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

In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of
Variable Interest Entities which requires variable interest
entities to be consolidated by the primary beneficiary of the entity if certain
criteria are met. FIN 46 is effective immediately for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN
46 become effective for us during the fourth quarter of 2003. The
implementation of this interpretation is not expected to have a significant
effect on our results of operations, financial condition or cash flows.

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

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS No. 146 replaced EITF 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.
SFAS No. 146 is effective for exit or disposal activities that are initiated
after December 31, 2002. The adoption of this standard did not have a
significant effect on our results of operations, financial condition or cash
flows.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, effective for us on January 1, 2003. SFAS No. 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible fixed assets and the associated asset retirement costs.
The adoption of this standard has not had a significant impact on our results
of operations, financial condition or cash flows.

27



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

We are exposed to various market risks, including changes in foreign currency
exchange rates and interest rates. Market risk is the potential loss arising
from adverse changes in market rates and prices, such as foreign currency
exchange and interest rates. Since 1998, we have not entered into derivative
financial instruments.

Foreign Exchange Risk

The principal form of market risk to which we are exposed is foreign exchange
rate risk. Diamond Holdings Senior Notes, which constitute a substantial
portion of our existing debt obligations, are denominated in U.S. dollars,
while our revenues are generated and stated in UK pounds sterling. In the
future, we may from time to time enter into foreign currency contracts based on
our assessment of foreign currency market conditions and its effect on our
operations and financial condition. Changes in currency exchange rates may have
a material effect on the results of our operations and our ability to satisfy
our obligations, including obligations under outstanding debt instruments, as
they become due.

Interest Rate Risk

We are exposed to interest rate risk on the fair market value of our long-term
fixed interest rate debt. Generally, the fair market value of fixed interest
rate debt will increase as interest rates fall and decrease as interest rates
rise. In the following table, fair values were determined from quoted market
prices.

The following table provides information as of September 30, 2003 about our
long-term fixed interest rate debt that is sensitive to changes in interest
rates and foreign currency exchange rates. The following table excludes the
amounts borrowed under the loan agreement with NTL of £19.6 million as of
September 30, 2003.

Interest Rate Sensitivity
Principal Amount by Expected Maturity
Average Interest Rate

Three
monthsending
    
    Year ending December 31,
    
    
    
    
    
    
    
    
    
    Fair ValueDecember 31,
    
    
    
    
    
    
    
    
    
    
    
    September 30,2003
    
    2004
    
    2005
    
    2006
    
    2007
    
    Thereafter
    
    Total
    
    2003Long-term debt including
current portionUS DollarsFixed rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    109.9
    
    
    $
    109.9
    
    
    $
    108.8Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.125
    %Average forward exchange rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.662UK PoundFixed rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    £135.0
    
    
    
    £135.0
    
    
    
    £131.0Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.0
    %


28



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures. Our management, with the
participation of the Chief Executive Officer and Chief Financial Officer of NTL
*, has evaluated the effectiveness of our disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the
period covered by this report. Based on such evaluation, the Chief Executive
Officer and Chief Financial Officer of NTL have concluded that, as of the end
of such period, our disclosure controls and procedures are effective in
recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by us in the reports that we file or
submit under the Exchange Act.

(b) Internal Control over Financial Reporting. There have not been any changes
in our internal control over financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter
to which this report relates that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.



|* |  | We have no Chief Executive Officer or Chief Financial Officer. Robert
Mackenzie and Scott E. Schubert are our directors, and the latter is the
Chief Financial Officer of NTL.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

29



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




PART II. OTHER INFORMATION




ITEM 5. OTHER INFORMATION

Officers and Directors

Barclay Knapp ceased employment with NTL as its president and chief executive
officer and resigned as a director as of August 15, 2003. Mr. Knapp serves as
a consultant to NTL through December 31, 2003. Simon P. Duffy replaced Mr.
Knapp as NTLs chief executive officer. Mr. Duffy has served as NTLs chief
operating officer since March 2003.

On September 16, 2003, Charles Gallagher was appointed to NTLs board of
directors as a non-executive director.

Rights Offering

On September 26, 2003, NTL filed a registration statement on Form S-1
(Registration No. 333-109194) with the Commission relating to a proposed common
stock rights offering. On November 4, 2003, NTL declared a dividend to
stockholders of record of its common stock as of close of business on November
7, 2003, at no charge, of 0.702243 transferable rights for each share of its
common stock they hold on the record date. Each right entitles stockholders to
purchase one share at a purchase price of $40.00. In addition, in the event
all rights are not exercised, holders of rights may purchase additional shares
through the exercise of an over subscription privilege. The rights offering
period will expire on November 17, 2003.

If all rights are exercised, NTL will issue 35,750,000 shares and receive gross
proceeds of $1,430.0 million. NTL expects to use the net proceeds of
approximately $1,370.0 million to:



| |  | repay in full all obligations under the Exit Notes of $599.7 million. This amount reflects:
|- |  | -------------------------------------------------------------------------------------------



| |  |  | $502.8 million, the accreted value of the Exit Notes as of September 30, 2003,
| | - |  | ------------------------------------------------------------------------------



| |  |  | $50.5 million, the accreted value as of September 30, 2003 of the
additional Exit Notes used to make the July 1, 2003 interest payment,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $29.2 million, the accrued interest outstanding on the Exit Notes and
additional Exit Notes as of September 30, 2003, plus,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | $17.2 million, the accrued interest and the increase in accreted
value through the redemption date of the Exit Notes and the additional
Exit Notes outstanding as of September 30, 2003;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | pay approximately $616.2 million, representing 80% of the net proceeds
remaining after repayment of the Exit Notes as required under NTLs
senior credit and working capital facilities, together with cash on
hand of $69.1 million, as permanent repayment in full of all of NTLs
obligations under its working capital facility;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | transfer by inter-company funding of $102.7 million to NTLs
subsidiary NTL Communications Ltd. and some of its subsidiaries as
required by NTLs senior credit and working capital facilities,
representing two-thirds of the net proceeds remaining after repayment
of the Exit Notes and a repayment of a portion of the principal amount
of its working capital facility as described above; and
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the balance for general corporate purposes.
|- |  | -------------------------------------------

Two of NTLs stockholders, W.R. Huff Asset Management Co., L.L.C. and Franklin
Mutual Advisers, have agreed to exercise all of the rights to be distributed to
them, subject to customary conditions. These stockholders, who owned in the aggregate approximately 21.3% of
NTLs outstanding shares as of September 30, 2003, will purchase 7,626,309
shares as a result of the exercise of their rights. The rights offering is
being underwritten by Deutsche Bank Securities Inc, Goldman, Sachs & Co. and
J.P. Morgan Securities Inc. as lead underwriters and Morgan Stanley & Co.
Incorporated, Banc of America Securities LLC, Credit Suisse First Boston LLC
and UBS Securities LLC as co-managers. The underwriters have committed to
purchase up to 28,123,691 of the shares at the same purchase price to be paid
by stockholders, subject to customary conditions.

30



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

31
    
    Certifications of CEO and CFO* pursuant to Rule 13a-14(a) under
the Securities Exchange Act of 1934.32
    
    Certification of CEO and CFO* pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.


(b) Reports on Form 8-K:

We filed no reports on Form 8-K during the quarter ended September 30,
2003.

* We have no Chief Executive Officer or Chief Financial Officer. Robert
Mackenzie and Scott E. Schubert are our Directors and the latter is the Chief
Financial Officer of NTL.

31



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##### Table of Contents



DIAMOND CABLE COMMUNICATIONS LIMITED
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: November 14, 2003
    
    DIAMOND CABLE COMMUNICATIONS LIMITEDBy:
    
    /s/ Robert MackenzieRobert Mackenzie
Director and SecretaryDate: November 14, 2003
    
    By:
    
    /s/ Scott E. SchubertScott E. Schubert
Director


32



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##### Table of Contents



Exhibit 31

CERTIFICATIONS

I, Robert Mackenzie, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Diamond Cable
Communications Limited;
| | -- |  | -------------------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly 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 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 report;
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | Evaluated the effectiveness of the registrants disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | Disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of the
registrants board of directors (or persons performing the equivalent
functions):
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal control over financial reporting.
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14, 2003
    
    /s/ Robert MackenzieRobert Mackenzie
Director and Secretary*


*We have no Chief Executive Officer or Chief Financial Officer. Robert
Mackenzie and Scott E. Schubert are our Directors and the latter is the Chief
Financial Officer of NTL.





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##### Table of Contents



Exhibit 31

CERTIFICATIONS

I, Scott E. Schubert, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Diamond Cable
Communications Limited;
| | -- |  | -------------------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly 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 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 report;
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | Evaluated the effectiveness of the registrants disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | Disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of the
registrants board of directors (or persons performing the equivalent
functions):
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal control over financial reporting.
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14, 2003
    
    /s/ Scott E. SchubertScott E. Schubert
Director*


*We have no Chief Executive Officer or Chief Financial Officer. Robert
Mackenzie and Scott E. Schubert are our Directors and the latter is the Chief
Financial Officer of NTL.





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##### Table of Contents



Exhibit 32

CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Diamond Cable
Communications Limited (the Company) for the quarter ended September 30, 2003
as filed with the Securities and Exchange Commission on the date hereof (the
Report), Robert Mackenzie and Scott E. Schubert, as Directors of the Company,
each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge,
that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

/s/ Robert Mackenzie
Name: Robert Mackenzie
Title: Director and Secretary*
Date: November 14, 2003 /s/ Scott E. Schubert
Name: Scott E. Schubert
Title: Director*
Date: November 14, 2003


A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of
Section 18 of the Securities Exchange Act of 1934.

*We have no Chief Executive Officer or Chief Financial Officer. Robert
Mackenzie and Scott E. Schubert are our Directors and the latter is the Chief
Financial Officer of NTL.