##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|              |  |                                                                                                                                  
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|(Mark One)   
|             
|             
|             
|             
|(X BOX)       |  | Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the Quarterly Period Ended:          
|             
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|              |  |                                                                                                                                  
|             
|             
|             
|             
|JUNE 30, 2002
|             
|             
|             
|             
|              |  |                                                                                                                                  
|             
|             
|             
|             
|OR           
|             
|             
|             
|             
|              |  |                                                                                                                                  
|             
|             
|             
|             
|(BOX)         |  | 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 0-24792

NTL (TRIANGLE) LLC

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 13-4086747                          
|                                                              
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

110 East 59th Street
New York, NY 10022
(212) 906-8440

(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 twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days.

|    |  |         |  |  |  |    |  |      
|--- |  | ------- |  |  |  | -- |  | -----
|Yes |  | (X BOX) |  |  |  | No |  | (BOX)
|   
|   
|   
|   
|    |  |         |  |  |  |    |  |      

As of June 28, 2002, there were 800,000 shares of the Registrants common
membership interests outstanding. The Registrant is an indirect, wholly owned
subsidiary of NTL Incorporated and there is no market for the Registrants
membership interests. The Registrant meets the conditions set forth in General
Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this form
with the reduced disclosure format.





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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
|                                      |                                                                                                                    | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS         
|                                      | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                      RESULTS OF OPERATIONS
|                                      | Risk Factors                                                                                                      
|                                      | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                                          
|                                      | SIGNATURES                                                                                                        
|EX-99.1: CERTIFICATION OF CEO AND CFO



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

TABLE OF CONTENTS

|        |  |                       |  |                                                                                                                       |  |       
|------- |  | --------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ------
|        |  |                       |  |                                                                                                                       |  | Page  
|        |  |                       |  |                                                                                                                       |  | Number
|        |  |                       |  |                                                                                                                       |  |       
|PART I  |  | FINANCIAL INFORMATION |  |                                                                                                                      
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  | Item 1.               |  | Financial Statements                                                                                                  |  |       
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  |                       |  | Condensed Consolidated Balance Sheets as of
June 30, 2002 (Unaudited) and December 31, 2001                           |  | 2     
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  |                       |  | Condensed Consolidated Statements of Operations
for the Six and Three Months Ended June 30, 2002 and 2001 (Unaudited) |  | 3     
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  |                       |  | Condensed Consolidated Statement of Shareholders Equity
for the Six Months Ended June 30, 2002 (Unaudited)           |  | 4     
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  |                       |  | Condensed Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 2002 and 2001 (Unaudited)           |  | 5     
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  |                       |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                      |  | 6-20  
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  | Item 2.               |  | Managements Discussion and Analysis of
Financial Condition and Results of Operations                                 |  | 21-41 
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  | Risk Factors          |  | 41-46                                                                                                                
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|PART II |  | OTHER INFORMATION     |  |                                                                                                                      
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                                                      |  | 47    
|       
|       
|       
|       
|        |  |                       |  |                                                                                                                       |  |       
|       
|       
|       
|       
|        |  | SIGNATURES            |  | 48                                                                                                                   





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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002




PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




CONDENSED CONSOLIDATED BALANCE SHEETS

|                                       |                                                                                              |                            |                      |          |                                |        |              |          |         |        | 
|-------------------------------------- | -------------------------------------------------------------------------------------------- | -------------------------- | -------------------- | -------- | ------------------------------ | ------ | ------------ | -------- | ------- | ------ | 
|                                       |                                                                                              |                            |                      |          | June 30,                       |        | December 31,
|                                       |                                                                                              |                            |                      |          | 2002                           |        | 2001        
|                                       |                                                                                              |                            |                      |          |                                |        |             
|                                       |                                                                                              |                            |                      |          | (Unaudited)                    |        | (See Note)  
|                                       |                                                                                              |                            |                      |          | (in £000's, except share data)
|Assets                                 |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Current assets                         |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|                                       | Cash and cash equivalents                                                                    |                            |                      | £25,555  |                                |        |              | £34,927  |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accounts receivable, less allowance for doubtful accounts of
£8,406 (2002) and £9,921 (2001) |                            |                      | 22,318   |                                |        |              | 24,962   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Other current assets                                                                         |                            |                      | 3,702    |                                |        |              | 7,160    |        
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                       |                                                                                              |                            | Total current assets |          |                                | 51,575 |              |          |         | 67,049 | 
|                                      
|                                      
|                                      
|                                      
|Property and equipment, net            |                                                                                              |                            | 469,616              |          |                                |        | 473,476      |         
|                                      
|                                      
|                                      
|                                      
|Intangible assets, net                 |                                                                                              |                            | 56,020               |          |                                |        | 62,204       |         
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                       |                                                                                              |                            | £577,211             |          |                                |        | £602,729     |         
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Liabilities and shareholders equity   |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Current liabilities                    |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|                                       | Accounts payable and accrued expenses                                                        |                            |                      | £34,618  |                                |        |              | £43,578  |        
|                                      
|                                      
|                                      
|                                      
|                                       | Interest payable                                                                             |                            |                      | 3,754    |                                |        |              | 4,980    |        
|                                      
|                                      
|                                      
|                                      
|                                       | Deferred revenue                                                                             |                            |                      | 14,068   |                                |        |              | 11,592   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Due to affiliates                                                                            |                            |                      | 11,471   |                                |        |              | 3,265    |        
|                                      
|                                      
|                                      
|                                      
|                                       | Current portion of long-term debt                                                            |                            |                      | 341,861  |                                |        |              | 358,781  |        
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                       |                                                                                              | Total current liabilities  |                      |          | 405,772                        |        |              |          | 422,196 |       
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Loans from affiliate                   |                                                                                              |                            | 74,630               |          |                                |        | 67,956       |         
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Long-term debt, less current portion   |                                                                                              |                            |                     |          |                                |        |             |         
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Commitments and contingent liabilities |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Deferred income taxes                  |                                                                                              |                            | 5,220                |          |                                |        | 5,519        |         
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|Shareholders equity:                  |                                                                                              |                            |                      |          |                                |        |              |         
|                                      
|                                      
|                                      
|                                      
|                                       | Common membership interests, £.01 par value  authorized and issued
800,000 shares           |                            |                      | 8        |                                |        |              | 8        |        
|                                      
|                                      
|                                      
|                                      
|                                       | Additional capital                                                                           |                            |                      | 493,537  |                                |        |              | 493,537  |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accumulated
other comprehensive income (loss)                                                |                            |                      | 1,279    |                                |        |              | (205     | )      
|                                      
|                                      
|                                      
|                                      
|                                       | (Accumulated deficit)                                                                        |                            |                      | (403,235 | )                              |        |              | (386,282 | )      
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                       |                                                                                              | Total shareholders equity |                      |          | 91,589                         |        |              |          | 107,058 |       
|                                       |                                                                                              |                            |                      |          |                                |        |              |         
|                                       |                                                                                              |                            | £577,211             |          |                                |        | £602,729     |         
|                                       |                                                                                              |                            |                      |          |                                |        |              |         

Note: The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date.

See accompanying notes.

2



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##### Table of Contents






NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |         |  
|--------------------------------- | ------------------------------------------------------------ |  | ---------------- | ------- | ------------------ |  | -------- | ------- | ---- |  | ------- | ------ | - |  | -------- | ------- | -
|                                  |                                                              |  | Six Months Ended |         | Three Months Ended
|                                  |                                                              |  | June 30,         |         | June 30,          
|                                  |                                                              |  |                  |         |                   
|                                  |                                                              |  | 2002             |         | 2001               |  | 2002     |         | 2001
|                                  |                                                              |  |                  |         |                    |  |          |         |     
|Revenue                           |                                                              |  | £95,685          |         |                    |  | £87,702  |         |      |  | £48,565 |        |   |  | £45,659  |        
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                 
|                                 
|                                 
|                                 
|Costs and expenses                |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating
(exclusive of depreciation shown separately below) |  |                  | 44,728  |                    |  |          | 42,093  |      |  |         | 21,995 |   |  |          | 22,484  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Selling, general and administrative                          |  |                  | 31,991  |                    |  |          | 39,547  |      |  |         | 15,786 |   |  |          | 16,692  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Other charges                                                |  |                  | 1,126   |                    |  |          |        |      |  |         | 13     |   |  |          |        |  
|                                 
|                                 
|                                 
|                                 
|                                  | Depreciation                                                 |  |                  | 26,135  |                    |  |          | 30,063  |      |  |         | 14,005 |   |  |          | 15,903  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Amortization                                                 |  |                  | 5,490   |                    |  |          | 21,527  |      |  |         | 2,365  |   |  |          | 10,764  |  
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                  |                                                              |  | 109,470          |         |                    |  | 133,230  |         |      |  | 54,164  |        |   |  | 65,843   |        
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                 
|                                 
|                                 
|                                 
|Operating loss                    |                                                              |  | (13,785          | )       |                    |  | (45,528  | )       |      |  | (5,599  | )      |   |  | (20,184  | )      
|                                 
|                                 
|                                 
|                                 
|Other income (expense)            |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                 
|                                 
|                                 
|                                 
|                                  | Interest expense                                             |  |                  | (20,166 | )                  |  |          | (20,090 | )    |  |         | (9,956 | ) |  |          | (10,291 | )
|                                 
|                                 
|                                 
|                                 
|                                  | Interest expense to affiliate                                |  |                  | (1,533  | )                  |  |          | (1,221  | )    |  |         | (783   | ) |  |          | (683    | )
|                                 
|                                 
|                                 
|                                 
|                                  | Investment income                                            |  |                  | 707     |                    |  |          | 148     |      |  |         | 323    |   |  |          | 29      |  
|                                 
|                                 
|                                 
|                                 
|                                  | Exchange gains (losses)                                      |  |                  | 17,661  |                    |  |          | (22,156 | )    |  |         | 25,079 |   |  |          | (2,999  | )
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                  |                                                              |  | (3,331           | )       |                    |  | (43,319  | )       |      |  | 14,663  |        |   |  | (13,944  | )      
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                 
|                                 
|                                 
|                                 
|(Loss) income before income taxes |                                                              |  | (17,116          | )       |                    |  | (88,847  | )       |      |  | 9,064   |        |   |  | (34,128  | )      
|                                 
|                                 
|                                 
|                                 
|Income tax benefit (expense)      |                                                              |  | 163              |         |                    |  | (34      | )       |      |  | (44     | )      |   |  | (34      | )      
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        
|                                 
|                                 
|                                 
|                                 
|Net (loss) income                 |                                                              |  | £(16,953         | )       |                    |  | £(88,881 | )       |      |  | £9,020  |        |   |  | £(34,162 | )      
|                                  |                                                              |  |                  |         |                    |  |          |         |      |  |         |        |   |  |          |        

See accompanying notes.

3



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##### Table of Contents






NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(Unaudited)
(in 000s)

|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |         |          |               |  |             |       |  |  |           |         |   |  |          |         |  
|---------------------------- | ------------------------------ |  | ------ |  | ---------- |  | ------- |  | ------- |  | ------------- |  | -------- |  | ------- | -------- | ------------- |  | ----------- | ----- |  |  | --------- | ------- | - |  | -------- | ------- | -
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |         |          |               |  | Accumulated |       |  |  |           |         |   |  |         
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  | Compre- |          | Other Compre- |  | (Accum-     |       |  |  |          
|                             |                                |  | Common |  | Additional |  | hensive |  | hensive |  | ulated        |  |          |  |        
|                             |                                |  | Shares |  | Par        |  | Capital |  | Loss    |  | Income
(Loss) |  | Deficit) |  | Total  
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |        
|Balance at December 31, 2001 |                                |  | 800    |  |            |  | £8      |  |         |  | £493,537      |  |          |  |         |          |               |  | £(205       | )     |  |  | £(386,282 | )       |   |  | £107,058 |        
|                            
|                            
|                            
|                            
|                             | Net loss                       |  |        |  |            |  |         |  |         |  |               |  |          |  |         | £(16,953 | )             |  |             |       |  |  |           | (16,953 | ) |  |          | (16,953 | )
|                            
|                            
|                            
|                            
|                             | Current translation adjustment |  |        |  |            |  |         |  |         |  |               |  |          |  |         | 1,484    |               |  |             | 1,484 |  |  |           |         |   |  |          | 1,484   |  
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |         |          |               |  |             |       |  |  |           |         |   |  |          |        
|                            
|                            
|                            
|                            
|                             | Comprehensive loss             |  |        |  |            |  |         |  |         |  |               |  |          |  |         | £(15,469 | )             |  |             |       |  |  |           |         |   |  |          |         |  
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |         |          |               |  |             |       |  |  |           |         |   |  |          |        
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |         |          |               |  |             |       |  |  |           |         |   |  |          |        
|                            
|                            
|                            
|                            
|Balance at June 30, 2002     |                                |  | 800    |  |            |  | £8      |  |         |  | £493,537      |  |          |  |         |          |               |  | £1,279      |       |  |  | £(403,235 | )       |   |  | £91,589  |        
|                             |                                |  |        |  |            |  |         |  |         |  |               |  |          |  |         |          |               |  |             |       |  |  |           |         |   |  |          |        

See accompanying notes.





4



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##### Table of Contents






NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                 |                                          |                                           |         |                  |         |      |         |         |         |  
|------------------------------------------------ | ---------------------------------------- | ----------------------------------------- | ------- | ---------------- | ------- | ---- | ------- | ------- | ------- | -
|                                                 |                                          |                                           |         | Six Months Ended
|                                                 |                                          |                                           |         | June 30,        
|                                                 |                                          |                                           |         |                 
|                                                 |                                          |                                           |         | 2002             |         | 2001
|                                                 |                                          |                                           |         |                  |         |     
|                                                 |                                          |                                           |         | (in £000's)     
|Net cash provided by operating activities        |                                          |                                           | £9,842  |                  |         |      | £1,525  |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|Investing activities                             |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Capital expenditures                     |                                           |         | (21,425          | )       |      |         | (36,161 | )      
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                          | Net cash used in investing activities     |         |                  | (21,425 | )    |         |         | (36,161 | )
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|Financing activities                             |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Loans from affiliate                     |                                           |         | 2,737            |         |      |         | 24,589  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Contribution from NTL Group Limited      |                                           |         |                 |         |      |         | 20,436  |        
|                                                 | Principal payments                       |                                           |         | (638             | )       |      |         | (337    | )      
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                          | Net cash provided by financing activities |         |                  | 2,099   |      |         |         | 44,688  |  
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|Effect of exchange rate changes on cash          |                                          |                                           | 112     |                  |         |      | 64      |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|(Decrease) increase in cash and cash equivalents |                                          |                                           | (9,372  | )                |         |      | 10,116  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents, beginning of period   |                                          |                                           | 34,927  |                  |         |      | 4,706   |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents, end of period         |                                          |                                           | £25,555 |                  |         |      | £14,822 |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                 |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|Supplemental disclosure of cash flow information |                                          |                                           |         |                  |         |      |         |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Cash paid during the period for interest |                                           |         | £20,931          |         |      |         | £20,795 |        

See accompanying notes.





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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.      Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of
NTL (Triangle) LLC (formerly NTL (Bermuda) Limited) (NTL Triangle or the
Company) have been prepared in accordance with U.S. generally accepted
accounting principles 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 management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and six months ended June 30, 2002
are not necessarily indicative of the results that may be expected for the
year ending December 31, 2002. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2001.

The Company is an indirect, wholly-owned subsidiary of NTL Incorporated
(NTL Incorporated and, together with its consolidated subsidiaries,
NTL).

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

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

2.      Recapitalization Process and Ability to Continue Operations

On May 8, 2002, NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited and
Communications Cable Funding Corp. filed a pre-arranged joint reorganization
plan under Chapter 11 of the United States Bankruptcy Code (referred to as
the proposed recapitalization plan). NTL Triangle and NTLs operating
subsidiaries were not included in the Chapter 11 filing. Toward the end of
2001, while NTL continued to have sufficient liquidity to meet its near term
obligations, it recognized the negative impact of the collapsing European
and U.S. telecommunications markets on its ability to service its debt.
Accordingly, NTL began to implement a strategy to preserve and maximize its
enterprise value. This strategy included the implementation of cost-cutting
measures and the commencement of discussions with certain third parties
regarding strategic alternatives for NTLs business.

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

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

In addition, NTLs UK credit facilities are fully drawn. The revolving
tranche of the Cablecom credit facility has been capped at its utilized
amount of CHF 1,055.0 million although the availability may be increased
with the consent of the requisite majority of the lenders under that
facility. The term tranche of the Cablecom credit facility is fully
drawn. NTL has missed interest payments totaling $381.5 million
beginning on April 1, 2002. Upon emerging from Chapter 11
proceedings, NTL intends to make any required interest payments on the
notes of Diamond Holdings. In accordance with the proposed
recapitalization plan, NTL does not plan to make future interest
payments on its currently outstanding publicly traded notes except notes
issued by NTL Triangle and, upon emergence from Chapter 11 proceedings,
Diamond Holdings Limited.

As of June 30, 2002, NTL Triangle had approximately £25.6 million in
cash and cash equivalents on hand. NTL Triangle may require additional
cash in the twelve months from July 1, 2002 to June 30, 2003. NTL
Incorporated obtained a Court approved $630 million DIP facility
(described below) on July 15, 2002 to meet the potential cash
requirements of its and its subsidiaries, excluding Cablecom. NTL
Incorporated expects that the DIP facility will be replaced with an exit
facility for NTL Communications Corp. and its subsidiaries, including
NTL Triangle, upon the completion of the recapitalization process, in part
because the DIP facility will mature concurrently with the Debtors
emergence from Chapter 11. NTL Triangle estimates that its capital expenditures
and debt service requirements, net of cash from operations, will
aggregate up to approximately £23.7 million from July 1, 2002 to June
30, 2003. Management of NTL Triangle believes that cash and cash
equivalents on hand at June 30, 2002, and the cash available from the
DIP facility and subsequently the planned exit facility will be
sufficient for its and its subsidiaries cash requirements during the
twelve months from July 1, 2002 to June 30, 2003.

Events Leading to the Proposed Recapitalization and Chapter 11 Filings

Beginning in January 2002, NTL was contacted by an unofficial committee of
bondholders regarding the commencement of a comprehensive and consensual
restructuring process. NTL was informed at that time that the members of the
unofficial steering committee of bondholders owned, in the aggregate, more
than 50% of the outstanding principal amount of NTLs notes. In connection
with the restructuring process, the steering committee of the unofficial
committee of bondholders retained advisors to facilitate the negotiations.

On January 31, 2002, NTL announced that it had appointed Credit Suisse First
Boston, JP Morgan and Morgan Stanley to advise on strategic and
recapitalization alternatives to strengthen its balance sheet and reduce
debt and put an appropriate capital structure in place for its business.
Subsequently, NTL evaluated various recapitalization alternatives, and met
with a number of strategic investors, to effect a comprehensive consensual
reorganization in a timely manner to minimize negative effects on its
business operations. Discussions with such strategic investors did not
result in a proposal which NTL's board of directors believed was
comparable or superior to the value provided to its stakeholders by the
proposed plan of reorganization.

Liberty Media Corporation, one of such potential strategic investors, which
is also a significant shareholder in Telewest plc, another British cable and
telephone company, has discussed various transactions with NTL from time to
time over the past several years. In March 2002, Liberty and NTL amended a
previously existing confidentiality agreement between them to cover the
restructuring process and to include a standstill agreement which
prohibited various acquisitions of, or offers, for NTL debt or equity
securities by Liberty and its subsidiaries until June 30, 2002.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

On April 17, 2002, Liberty sent a proposal to NTLs board of directors,
which proposed a cash tender offer for 30% of the outstanding bonds of NTL
Communications Corp. at a small premium to the prevailing market price and
an agreement to vote such acquired bonds in favor of the proposed plan of
reorganization, as well as a participation with NTL in a cash infusion of
up to $500 million into Cablecom. After consultation with NTL's board of directors
and the steering committee of bondholders on April 18,
2002, NTL indicated to Liberty that it did not consider the Liberty proposal
to be in the best interests of NTL and that the best course of action for
NTL to maximize its enterprise value was to promptly consummate the proposed
plan of reorganization. By letter dated June 28, 2002, NTL received notice
that Liberty was ceasing all discussions with NTL concerning its proposals.

Promptly upon obtaining the requisite waivers from the lenders under its
credit facilities, in March 2002, NTL commenced negotiations with the
steering committee of the unofficial committee of bondholders and its legal
and financial advisors. The negotiations continued during the latter part of
March and throughout April 2002, and also included France Telecom. On April
16, 2002, NTL announced that it had reached a comprehensive agreement in
principle with the unofficial committee and France Telecom, a significant
holder of NTL Incorporateds preferred stock, on implementing a
recapitalization plan. On May 2, 2002, a steering committee of the lending
banks under NTLs credit facilities gave their approval in principle (on a
non-legally binding basis) to NTLs proposed plan of reorganization.

The reorganization plan, if implemented, will result in the cancellation of
all of NTL Incorporateds outstanding shares of common stock, preferred
stock and redeemable preferred stock, and the cancellation of all of the
publicly held notes of NTL Incorporated, NTL (Delaware), Inc. and NTL
Communications Corp. and the transfer of the publicly held notes of Diamond
Cable Communications Limited to NTL UK and Ireland (one of two new entities
to be created under the plan). In addition, if the plan is implemented, NTL
will be discharged from its obligation to pay dividends accruing on the
canceled preferred stock and interest accruing on the canceled notes. The
reorganization plan contemplates that the UK bank debt will remain in place
as part of the recapitalization. NTL would be split into two companies, one
tentatively called NTL UK and Ireland, holding its main UK and Ireland
assets, and one tentatively called NTL Euroco, holding certain of its
continental European and other assets.

To implement the proposed recapitalization, on May 8, 2002, NTL
Incorporated, NTL (Delaware), Inc., NTL Communications Corp., Diamond Cable
Communications Limited, Diamond Holdings Limited and Communications Cable
Funding Corp., which we refer to as the Debtors, filed cases and a
pre-arranged joint reorganization plan under Chapter 11 of the United States
Bankruptcy Code. NTL Triangle and NTLs operating subsidiaries were not
included in the Chapter 11 filings.

On June 21, 2002, the United States Trustee appointed an official unsecured
creditors committee. The creditors committee is comprised of the three
indenture trustees for the debt securities of NTL and the ten members of the
steering committee of NTLs bondholders. The members of the creditors
committee are: The Bank of New York; Wilmington Trust Company; Wells Fargo
Bank Minnesota, National Association; Angelo Gordon & Co. LP; Capital
Research & Management Company; Franklin Mutual Advisers, LLC; Oaktree
Capital Management LLC; Salomon Brothers Asset Management; Appaloosa
Management, LP; Fidelity Management & Research Co.; MacKay Shields LLC; SAB
Capital Management, L.P.; and W.R. Huff Asset Management Co., LLC.

On May 24, 2002, the Debtors filed an amended joint reorganization plan and
disclosure statement. The bankruptcy court approved the disclosure statement
on July 12, 2002 as containing information of a kind and in sufficient
detail to enable the holders of claims against or interests in the debtors
to make an informed judgment with respect to the reorganization plan prior
to exercising their right to vote to accept or reject the reorganization
plan. At that time the Court set September 5, 2002 as the date for the
hearing to consider confirmation of the amended joint reorganization plan as
subsequently amended. On July 15, 2002, NTL Incorporated and its debtor
subsidiaries filed an amended disclosure statement and a second amended
joint reorganization plan. A copy of the second amended joint reorganization
plan and the related disclosure statement are included as exhibits to NTL
Incorporateds Current Report on Form 8-K filed on July 16, 2002.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

The filing of the petitions seeking relief filed under Chapter 11
constituted an event of default under the indentures of each of the entities
which filed Chapter 11 petitions and amounts outstanding under these
indentures became immediately due and payable. No action has been taken to
date in respect of those defaults and any such action likely would be barred
by the automatic stay that exists by virtue of the Chapter 11 filings. The
filing of the Debtors Chapter 11 petitions also constituted an event of
default under NTLs UK credit facilities and the Cablecom credit facility,
allowing the lenders thereunder to declare amounts outstanding to be
immediately payable. Those lenders have not taken any action to date in
respect of those defaults, and a steering committee of those lenders has
agreed in principle (in a non-legally binding manner) to the proposed
recapitalization.

Recapitalization Expense

A subsidiary of NTL in the UK has incurred
recapitalization expenses of approximately £23 million
through June 30, 2002, including approximately
£13 million for employee retention related to substantially
all of NTLs UK employees and approximately
£10 million for financial advisor, legal, accounting and
consulting costs. NTL Triangle expects to be charged in the third
quarter of 2002 for its share of these expenses as well as expenses
incurred after June 30, 2002.

NTL expects to incur approximately
$50.0 million in additional recapitalization costs until the
completion of the process. The proposed joint reorganization plan
provides that recapitalization costs will be allocated between NTL UK
and Ireland and NTL Euroco.

DIP facility

In connection with the proposed joint reorganization plan, some members of
the official unsecured creditors committee of bondholders committed to
provide up to $500 million of new debt financing to NTL Incorporated and
some of its subsidiaries during the Chapter 11 process. The new financing
will ensure that NTLs business operations have access to sufficient liquidity
to continue ordinary operations. GE Capital, an affiliate of GE Capital
Structured Finance Group Limited, one of the lenders under the Senior Credit
Facility, and Wilmington Trust Company, the trustee under the Indentures
governing certain of the NTL Incorporated subordinated notes, filed
objections to the DIP facility. The Bankruptcy Court approved the DIP
facility in the principal amount of $630 million (including a $130 million
commitment from NTL (Delaware), Inc. and the $500 million from certain
members of the creditors committee) over such objections in an order issued
on July 3, 2002. On July 15, 2002, the various lenders under the DIP
facility and NTL (Delaware), Inc., entered into the DIP facility agreement
with Communications Cable Funding Corp., a wholly-owned subsidiary of NTL
Communications Corp., to provide $630 million in financing to Communications
Cable Funding Corp.

In connection with the commitment, NTL Incorporated and its debtor
subsidiaries were to pay a commitment fee to the bondholder DIP lenders
equal to 2% of the $500 million commitment (i.e., $10 million). Accordingly,
on May 6, 2002, and May 7, 2002, NTL delivered to its bank written
instructions to pay by wire transfer to each lender under the DIP facility
such lenders pro rata portion of the commitment fee. Due to administrative
difficulties, however, some of the lenders under the DIP facility did not
receive their pro rata portion of the commitment fee prior to the
commencement of the Chapter 11 cases. In total, as of May 8, 2002, $428,000
of the $10 million commitment fee had not been paid to the applicable
lenders under the DIP facility. Pursuant to an order of the court dated May
31, 2002, the remaining $428,000 of the commitment fee was paid to the
applicable lenders under the DIP facility.

Each term loan under the DIP facility will bear interest on the unpaid
principal amount for three months from July 15, 2002 at the rate of 11% per
annum. With respect to each successive three month period following that
date, the rate per annum will increase incrementally by 1% over the
immediately preceding three month period but will not exceed 18% per annum
for any three month period.

NTL (Delaware), Inc. is also a lender under the DIP facility and will lend
up to $130 million. NTL (Delaware), Inc. has cash on hand and, because the
Chapter 11 cases are not substantively consolidated, NTL Incorporated and
its debtor subsidiaries and the steering committee of bondholders have
concluded that the cash at NTL (Delaware), Inc. is to be used to partially
fund the reorganization of all of the debtors. NTL (Delaware), Inc. will
receive interest and is entitled to the same protections as the other
bondholder DIP lenders.

Under the DIP facility agreement, Communications Cable Funding is the
borrower, and the other debtors (other than Diamond Cable and Diamond
Holdings) are guarantors, except that NTL Communications Corp. is also a
co-obligor of the loans from NTL (Delaware), Inc. Under the DIP facility
agreement, the cash (except for the DIP facility proceeds) of the borrower
and the guarantors will be cash collateral for the DIP facility and will not
be used or transferred for any purpose whatsoever without the consent of the
bondholder DIP lenders. All funding needs of the Debtors will be funded
through the proceeds of the DIP facility, in accordance with a budget and
the terms of the DIP facility agreement.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

Under the DIP facility agreement, the loan structure contains three tranches
that rank equally with each other. All amounts owed under the DIP facility
agreement are required to be paid in full no later than the earlier of (i)
the consummation of the reorganization plan, (ii) December 1, 2002, and
(iii) the date on which all of the term loans become due and payable in full
under the DIP facility agreement, whether by acceleration or otherwise.

On July 17, 2002, NTL drew the first tranche available under the facility in
the amount of $229.0 million.

A copy of the DIP facility agreement was attached as an exhibit to Form 8-K
filed by NTL Incorporated with the Commission on July 19, 2002.

Exit Facility

Because of the short maturity of the DIP facility and the longer term
liquidity needs of NTL, as well as the requirements under the Bankruptcy
Code for confirmation of and the conditions to consummation of NTLs
proposed plan, NTL will require the reorganized NTL to enter into an exit
financing facility. The exit financing or any alternative financing would
refinance (at least in part) the DIP facility and may be used as
consideration for the refinancing of a £90 million note payable to NTL
(Delaware), Inc. from NTL (UK) Group Inc. Because of the present market
conditions which are unfavorable to telecommunications companies generally,
there can be no assurance that NTL will successfully obtain an acceptable
exit facility, although NTL is presently in discussions with various parties
about alternatives.

NTL expects that the exit facility may be secured by various assets of the
reorganized NTL, including those which secure the DIP facility, would rank
senior to all current and future subordinated debt of the reorganized NTL.

NTL also expects that the exit facility would impose operating and financial
restrictions on the reorganized NTL and its subsidiaries. These restrictions
would significantly limit or prohibit, among other things, the reorganized
NTLs ability to incur additional indebtedness, pay dividends, or make
distributions in respect of capital stock, make other restricted payments,
enter into sale and leaseback transactions, create liens upon assets, enter
into transactions with affiliates or related persons, sell assets, or
consolidate, merge, or sell all or substantially all of their assets. The
exit facility also likely would require the reorganized NTL to satisfy
financial covenants on an ongoing basis. NTL cannot determine at this time
whether these financial covenants would have a material impact on the
reorganized NTLs ability to finance future operations or capital needs or
to engage in other business activities.

The terms, covenants, and conditions of an exit facility have not been
finalized and remain subject to negotiation and final documentation.

Proposed Recapitalization Plan

Under the proposed recapitalization plan, NTL would be split into two
companies, one tentatively called NTL UK and Ireland and holding
substantially all of NTLs UK and Ireland assets, and one tentatively called
NTL Euroco and holding substantially all of NTLs continental European and
other assets.

Holders of notes of NTL Incorporated (other than France Telecom), NTL
(Delaware), Inc. (other than France Telecom), NTL Communications Corp. and
Diamond Cable Communications Limited would in the aggregate receive 100% of
the initial common stock of NTL UK and Ireland (excluding shares issuable in
the rights offerings and upon the exercise of warrants (discussed below) and
upon the exercise of options which will be granted to certain employees of
NTL UK and Ireland). Holders of notes of NTL Incorporated (other than France
Telecom), NTL (Delaware), Inc. (other than France Telecom) and NTL
Communications Corp. would in the aggregate receive (i) 100% of the
preferred stock of NTL Euroco and (ii) a certain amount of cash as specified
in the amended joint reorganization plan. Holders of the subordinated notes
of NTL Incorporated (other than France Telecom), NTL (Delaware), Inc. (other
than France Telecom) and NTL Communications Corp. would in the aggregate
receive

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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

86.5% of the initial common stock of NTL Euroco (excluding shares
issuable upon the exercise of options which will be granted to certain employees of NTL Euroco). Holders of senior notes
of NTL Communications Corp. would receive the value of a specified number of
shares of common stock of NTL Euroco pursuant to the amended joint
reorganization plan. Notes of NTL Triangle and Diamond Holdings Limited, an
indirect wholly-owned subsidiary of NTL Incorporated would remain
outstanding and interest payments will be made.

Current preferred and common stockholders of NTL Incorporated, including
France Telecom, would receive warrants to purchase common stock of NTL
UK and Ireland and rights entitling them to purchase common stock of NTL
UK and Ireland. For each share of common stock purchased upon exercise
of rights, the person exercising such rights will receive a warrant to
purchase one share of common stock of NTL UK and Ireland. The rights
will be exercisable, on an oversubscription basis, for the 20-business
day period after the entry of the confirmation order, as such period may
be extended, and the warrants will be exercisable for a period of eight
years at an exercise price of $77.47 per share. The number of shares to
be received upon exercise of the warrants is subject to customary
adjustments for stock splits, stock recapitalizations and distributions
of property (other than cash) to holders of NTL UK and Ireland Common
Stock. If fully exercised, the rights and warrants would entitle the
current preferred stockholders of NTL Incorporated to acquire
approximately 23.6% and the current common stockholders of NTL
Incorporated to acquire approximately 8.9% of NTL UK and Irelands
primary common stock on the effective date of the recapitalization.
Holders of the subordinated notes of NTL Incorporated (other than France
Telecom), NTL (Delaware), Inc. (other than France Telecom), and NTL
Communications Corp. would have the right to purchase any shares of NTL
UK and Ireland common stock and warrants not subscribed for in the
rights offering by the preferred and common stockholders of NTL
Incorporated. It is expected that the warrants will be listed or quoted
on the same exchange or inter-dealer quotation system as the shares of
common stock of the reorganized NTL. NTL has had preliminary
conversations with the New York Stock Exchange regarding the listing of
the common stock of NTL UK and Ireland on the Exchange following the
effective date of its plan of reorganization. Based on these preliminary
conversations there has been no indication from the New York Stock
Exchange that NTL UK and Ireland will qualify for listing on the
Exchange. There can be no assurance that shares of NTL UK and Ireland
common stock and/or Series A warrants will be listed on an exchange or
be eligible for trading on an inter-dealer quotation system on the
effective date of the bankruptcy or at any time thereafter or that an
orderly trading market will develop for these securities.

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

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

Section 1129 of the United States Bankruptcy Code requires, among other
things, a showing that confirmation of the proposed recapitalization plan
will not be followed by liquidation or the need for further financial
reorganization of NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited or Diamond Holdings Limited, and
that the value of distributions to dissenting holders of claims and
interests may not be less than the value such holders would receive in a
liquidation under Chapter 7 of the United States Bankruptcy Code. Although
NTL believes that the proposed recapitalization plan will meet these tests,
there can be no assurance that the Bankruptcy Court will reach the same
conclusion.

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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

The United States Bankruptcy Code also requires that a plan must provide the
same treatment for each claim or
interest in a particular class, unless a holder agrees to a less favorable
treatment of its particular claim or interest. NTL believes that the
proposed recapitalization plan complies with this requirement of the United
States Bankruptcy Code. However, if a member of a class objects to its
treatment, or if the Bankruptcy Court finds that the proposed
recapitalization plan does not comply with the requirements of the United
States Bankruptcy Code, confirmation of the plan could be delayed or
prevented. In addition, each class of impaired claims and interests that
will (or may) be entitled to receive property under the plan will have the
opportunity to vote to accept or reject the plan. If an impaired class of
claims or interests rejects the plan, NTL may request confirmation
of the plan pursuant to the cramdown provisions of the United States
Bankruptcy Code. Even if the requirements for cramdown are met, the
Bankruptcy Court, which, as a court of equity may exercise substantial
discretion, may choose not to confirm the plan. These can be no assurance
that the proposed recapitalization plan will be confirmed.

Bank Waivers

Before NTL could commence negotiations with the unofficial committee of
bondholders, it was necessary to obtain waivers from the lenders under NTLs
credit facilities. Effective March 8, 2002, these lenders granted waivers
which, until March 29, 2002, provided that the commencement of negotiations
with bondholders with a view to rescheduling its debt would not constitute
an event of default under the credit facilities. Such initial waivers did
not permit NTL to make to any of its bondholders an exchange or similar
offer for NTLs outstanding public notes or to enter into a legally binding
agreement with the unofficial steering committee of bondholders, subject to
some exceptions, without the consent of the lenders under the credit
facilities. But for the initial waivers, the commencement of negotiations
with bondholders would have been an event of default under the credit
facilities.

Effective March 28, 2002, the lenders under the credit facilities agreed to
amend the initial waivers. The amendments to the initial waivers extended
the duration of the initial waivers to April 29, 2002 in the case of the UK
credit facilities or May 14, 2002 in the case of the Cablecom credit
facility, unless the interest payments missed by NTL Communications Corp. on
April 1, 2002 were remedied or a sufficient number of bondholders agreed to
forbear in respect of such non-payment, in which case, the UK credit
facilities waivers were to be extended to May 14, 2002. As a condition to
the amendment to the initial waivers, the UK lenders required NTL
(Delaware), Inc. to loan £90 million to NTL (UK) Group, Inc. following
receipt of the proceeds from the sale of NTL Australia. Such loan was
actually made (with the approval of the lenders under the UK credit
facilities) to NTL (UK) Group, Inc. and then on-lent to certain subsidiaries
of NTL (UK) Group, Inc. This loan, which was made on April 5, 2002, is
structurally senior to the outstanding public notes issued by NTL
Communications Corp. and contractually senior to intra-group debt owed by
NTL (UK) Group, Inc. to NTL Communications Corp. but contractually
subordinated to the UK credit facilities. In connection with the amendments
to the waivers, NTL affirmed the provisions of the initial waivers and
agreed, among other things, not to commence voluntary dissolution
proceedings, including proceedings under Chapter 11 of the United States
Bankruptcy Code, without the consent of these lenders.

As of the date of this Form 10-Q, there are no current waivers from NTLs
secured lenders and NTL is therefore in default under its UK credit
facilities and the Cablecom credit facility. In connection with the proposed
recapitalization plan, it is intended that the existing events of default
under the credit facilities will be cured by amendment with effect from the
effective date of the recapitalization, if it is approved by creditors and
the Bankruptcy Court. On May 2, 2002, a memorandum was executed by NTL, a
steering committee of its lending banks and the unofficial committee of its
public bondholders indicating the parties agreement in principle (on a
non-legally binding basis) to the terms of the proposed recapitalization and
the terms on which the Companys UK credit facilities should be amended and
restated and with respect to certain matters relating to the sale of, or
investment in, Cablecom.

Cablecom GmbH, an indirect wholly-owned subsidiary of NTL (Delaware), Inc.,
is the principal trading company of NTLs Swiss group. NTL Triangle does not
have any ownership interest in this group, although the condition of this
group can indirectly impact NTL Triangle to the extent it impacts NTL
Incorporated or NTL (Delaware), Inc., both parent companies of NTL Triangle.
There were a number of technical defaults under the Swiss credit facility

12



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

made available to Cablecom and various of its subsidiaries. In addition, as
of December 31, 2001, Cablecoms and six of
its direct and indirect subsidiaries liabilities exceeded their respective
assets. As a consequence, under Swiss law, those entities were deemed to be
overindebted. This also constituted an event of default under the Cablecom
credit facility, which entitled the lenders to accelerate repayment. Such an
acceleration would have resulted in an event of default under NTL
Incorporateds and NTL (Delaware), Inc.s 5.75% convertible subordinated
notes due 2011 and 5.75% convertible subordinated notes due 2009.

Under Swiss law, the board of directors of an overindebted company is
generally obliged to notify a judge of overindebtedness so that the judge
may either institute insolvency proceedings or postpone such adjudication
and take appropriate measures to preserve the value of the assets. An
overindebted company is not required to notify a judge if the creditors of
the overindebted entity subordinate their claims in the amount of the
overindebtedness.

The problem of overindebtedness was resolved on June 26 and June 27, 2002 in
certain of the overindebted subsidiaries when they were merged into Cablecom
and other members of the Cablecom group. The remaining overindebted
subsidiaries were not merged but the overindebtedness issue was resolved in
those subsidiaries by way of subordination agreements which obviated any
requirement to institute insolvency proceedings in respect of these
companies.

At the end of April 2002 the defaults subsisting at that time were remedied
or were waived by the restatement of the credit agreement and the grant of a
waiver letter. However, conditions subsequent such as the grant of new
security and the deposit of share certificates relating to minority
shareholdings pledged to the banks were imposed by these documents and other
new finance documents executed pursuant to the restatement.

Since the end of April 2002 the following defaults have occurred under the
Cablecom finance documents: (1) The indentures issued by NTL (Delaware),
Inc. and NTL Incorporated have become payable and have not been paid; (2)
NTL (Delaware), Inc. has commenced negotiations with its creditors with a
view to the general rescheduling of its indebtedness and has commenced
proceedings under Chapter 11 of the U.S. Bankruptcy Code pursuant to which
it intends to reorganize its debt; (3) NTL (Delaware), Inc. has liabilities
which exceed the value of its assets and is unable to pay its debts as they
fall due; (4) Cablecom was unable to satisfy the conditions to allow it to
rollover revolving advances maturing in early July 2002. The revolving
advances remained unpaid for several days until Cablecom was able to obtain
the consent of the banks to waive the conditions to their rollover; (5)
Certain of the conditions subsequent imposed by the restated credit
agreement, the waiver letter and other finance documents executed pursuant
to the restated credit agreement have yet to be fulfilled.

The outstanding defaults under the Cablecom finance documents entitle the
facility agent to demand repayment of the loan and enforce the security
granted to secure that loan. The facility agent has discretion to take those
steps and can be compelled to take those steps by a group of banks holding
at least 66-2/3% in aggregate of the loan.

Future developments in Cablecoms business, as well as external factors,
could result in a reemergence of the over indebtedness issue under Swiss
law.

Interest Payments on Public Notes

NTL has substantial interest payment obligations under its existing
indebtedness. NTL Incorporated and certain of its subsidiaries did not make their scheduled interest payments on the
respective due dates as follows:

|                         |  |                        |  |              
|------------------------ |  | ---------------------- |  | -------------
|April 1, 2002:           |  |                        |  |              
|                        
|                        
|                        
|                        
|NTL Communications Corp. |  | 9-1/2% notes due 2008  |  | $8.6 million 
|                        
|                        
|                        
|                        
|NTL Communications Corp. |  | 11-1/2% notes due 2008 |  | $35.9 million
|                        
|                        
|                        
|                        
|NTL Communications Corp. |  | 11-7/8% notes due 2010 |  | $29.7 million
|                        
|                        
|                        
|                        
|                         |  | Total                  |  | $74.2 million

13



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

|                                                    |  |                         |  |              
|--------------------------------------------------- |  | ----------------------- |  | -------------
|                                                   
|                                                   
|                                                   
|                                                   
|April 15, 2002:                                     |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005  |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware),
Inc., co-obligor) |  | 5-3/4% notes due 2011   |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $20.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|May 15, 2002:                                       |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/4% notes due 2006   |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 6-3/4% notes due 2008   |  | $38.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-7/8% notes due 2009   |  | $15.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $65.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|June 15, 2002:                                      |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 11-3/4% notes due 2005  |  | $31.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 7% notes due 2008       |  | $17.1 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL (Delaware), Inc.                                |  | 5-3/4% notes due 2009   |  | $34.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $82.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|July 15, 2002:                                      |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware),
Inc., co-obligor) |  | 5-3/4% notes due 2011   |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|August 1, 2002:                                     |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2006  |  | $60.4 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/8% notes dues 2008 |  | $18.3 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 10% notes due 2008      |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 9-1/8% notes due 2008   |  | $5.0 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $94.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|August 15, 2002                                     |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 10% notes due 2007      |  | $20.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 10-3/4% notes due 2007  |  | $22.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $42.6 million

Interest payments of $18.9 million were made, when due, on April 2, 2002 in
respect of Diamond Cable Communications 13.25% senior discount notes due
2004. Upon emerging from Chapter 11 proceedings, NTL intends to make any
required interest payments on the notes of Diamond Holdings Limited. In
accordance with the proposed recapitalization plan, NTL does not plan to
make future interest payments on its currently outstanding publicly traded
notes except notes issued by NTL Triangle and, upon emergence from Chapter
11 proceedings, Diamond Holdings Limited.

If the applicable issuer does not pay interest on these notes after a 30 day
grace period expires there is an event of default under the indenture in
respect of the notes on which the interest is due and unpaid. An event of
default entitles the trustee under the indenture or the holders of 25% of
the outstanding notes to declare the principal amount of those notes to be
immediately due and payable. Even if the maturity of those notes is not
accelerated after the 30 day grace period, such an event of default would
also result in an event of default in respect of other debt (commonly called
cross defaults) under most of NTLs other notes. Therefore, there was an event
of default for failure to pay interest on May 1, 2002 under the indentures
relating to the missed interest payments due April 1, 2002 and on May 16,
2002, under the indentures relating to the missed interest payments due
April 15, 2002. As a result, cross defaults occurred under NTLs other
indentures at NTL Communications Corp., NTL (Delaware), Inc., NTL
Incorporated and under NTLs UK credit facilities and under the Cablecom
credit facility. This gave holders of the outstanding series of debt at
these entities the right to accelerate repayment of those debts by declaring
the principal amount of the debts to be immediately due and payable. As a
result of the payment defaults as well as NTLs voluntary filing
under Chapter 11 of the United States Bankruptcy Code on May 8, 2002, there
is an event of default under

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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

all of NTLs credit facilities and the indentures
governing all of NTLs publicly traded debt, other than debt of NTL
Triangle. As a result of the Chapter 11 filings, all of
NTLs publicly traded debt,
other than the debt of NTL Triangle, became immediately due and payable,
pursuant to the terms of the indentures governing such debt. The automatic
stay of Section 362 of the United States Bankruptcy Code prevents the
holders of such debt from seeking to enforce their collection rights under
the indentures, except within the context of the Chapter 11 cases, and even
then only with the prior approval of the Bankruptcy Court. However, NTL has
received letters from the agents for the lenders under the UK credit
facilities reserving such lenders rights to accelerate repayment of the
facilities and to enforce the security granted in respect of the facilities
on account of the defaults thereunder, actions which would not be prohibited
by the automatic stay.

Credit Rating Downgrades

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

Delisting of NTL Incorporated Common Stock

On March 28, 2002, the New York Stock Exchange (NYSE) announced that it
was suspending NTL Incorporateds common stock from trading on the NYSE.
This determination was based upon, among other things, the selling price of
NTL Incorporateds common stock, which closed at $0.20 on March 26, 2002.
The continued listing standards of the NYSE, which were applicable to NTL
Incorporated, required maintenance of a minimum share price of $1.00 over a
30 trading day period and average global market capitalization of $100
million over a 30 trading day period. NTL Incorporateds common stock fell
below both of these continued listing standards. In addition, on May 9,
2002, Nasdaq Europe halted trading of the NTL Incorporateds common stock
pending receipt of information relating to the restructuring process because
of the filing of NTL Incorporateds Chapter 11 cases. NTL has complied with
this information request, although there can be no assurance that Nasdaq
Europe will (1) not make additional information requests, (2) remove the
trading halt on shares of NTL Incorporateds common stock or (3) not delist
 shares of NTL Incorporateds common stock. NTL Incorporateds common stock
is currently quoted on the Over the Counter Bulletin Board under the symbol
NTLD.

Sale of NTL Australia

On April 2, 2002, NTL announced that it had completed the previously
announced sale of its Australian broadcast business to Macquarie
Communications Infrastructure Holding Pty Limited for A$850 million
(US$451.3 million). The net proceeds from the sale were approximately
A$575.3 million (US$304.5 million). At that time, the business bank debt
outstanding totaled A$227.3 million (US$121.7 million). NTL Triangle did
not have any ownership interest in NTL Australia.

On April 5, 2002, NTL (Delaware), Inc. loaned £90 million to NTL (UK) Group
Inc., which loan was funded by the proceeds of the sale of NTL Australia.
This loan is subordinated to NTLs UK credit facilities. The
remaining proceeds of the sale of NTL Australia remain at NTL (Delaware),
Inc., and the proposed plan of reorganization anticipates that such proceeds
will form a portion of the consideration to be offered to bondholders of NTL
(Delaware), Inc. and NTL Incorporated in satisfaction of their claims
against those companies.

Potential Sale of, or Outside Investment in, Cablecom

It has been agreed to engage UBS Warburg LLC by August 31, 2002 to advise in
connection with an outside investment in, or sale of all or part of,
Cablecom. As part of this process, NTL (Delaware), Inc. and certain of its
subsidiaries have agreed to approve any such outside investment or sale,
which is acceptable to the lenders under the Cablecom credit facility.

It has also been agreed that if such a sale of all or part of Cablecom is
consummated on or before August 31, 2003,

15



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

the lenders under the Cablecom
credit facility will be entitled to receive additional interest equal to 20%
of the net
proceeds of such a sale after repayment of the amounts outstanding under the
Cablecom credit facility and other expenses and taxes of the sale. There can
be no assurance that any outside investment in, or sale of all or part of,
Cablecom pursuant to the Cablecom credit facility will be on terms that are
favorable to NTL and such investment or sale could have a material adverse
effect on NTLs finances and business.

In particular, in the current environment, NTLs shareholding in Cablecom
may have little or no value, which may result in NTL receiving little or no
consideration for its equity interest in Cablecom. Further, if a third party
makes an investment in Cablecom there can be no assurance that NTL will be
able to maintain its ability to direct the management of Cablecom.

Investments in and Loans to Affiliates

On April 15, 2002, a funding request for $20 million was received by NTL
under the terms of the investment agreement relating to NTLs investment in
B2 in Sweden, a company which is deploying fiber directly to the home
throughout Scandinavia. NTL Triangle does not have any ownership interest
in B2 although the condition of B2 can indirectly impact NTL Triangle to the
extent it impacts NTL Incorporated or NTL (Delaware), Inc., both parent
companies of NTL Triangle. NTL has informed B2 and the other principal
investors that it is not in a position to comply with this request for
funding at this time. The B2 investment agreement provides that if NTL fails
to provide such funding, it may be sued for non-payment and arguably could
lose certain rights under the B2 shareholders arrangements. Pursuant to the
applicable documents, if this occurs the majority remaining shareholders may
also elect to terminate the shareholder arrangements with respect to NTL and
exercise a contractual right to acquire on a pro rata basis NTLs interest
in B2 at 25% of fair market value. If the remaining shareholders elected to
exercise these rights, NTL could be forced to sell its stake in B2 at a
loss. On June 25, 2002, B2 and its remaining shareholders filed a motion in
the Bankruptcy Court requesting relief from the automatic stay provisions of
section 362 of the Bankruptcy Code to exercise their rights under the
relevant agreements. Notwithstanding the arguments raised in the motion, NTL
believes that the Bankruptcy Code provides various defenses and protections
of and for NTLs rights under the B2 investment agreement and in respect of
its equity interest in B2 and intends to enforce vigorously its rights and
protections.

Premium TV Limited, a wholly-owned subsidiary of NTL (Delaware), Inc.,
is obliged to provide funding of up to approximately £62.0 million
($94.5 million) to fund various of its joint venture interests. Of this
amount, the payment of approximately £50.0 million ($76.2 million) has
been guaranteed by NTL (Delaware), Inc. If Premium TV Limited fails to
provide its committed funding under the relevant shareholder
arrangements relating to these joint ventures, Premium TV Limited and,
in respect of the guaranteed amounts, NTL (Delaware), Inc., may be sued
for non-payment. As a result of the recapitalization process, the
relevant joint venture partners may assert that they can compulsorily
acquire Premium TV Limiteds interest in the relevant joint venture at a
third party appraisal valuation. Premium TV Limited is currently in
discussions with certain of these joint venture partners with a view to
restructuring the relevant joint ventures. In the event that these
discussions do not reach a resolution acceptable to Premium TV Limited,
Premium TV Limited may seek to discontinue these joint ventures and
terminate their activities, which may also result in a cessation of
substantially all of Premium TV Limiteds activities. As a result of the
restructuring process, the relevant joint venture partners may assert
that they can compulsorily acquire Premium TV Limiteds interest in the
relevant joint venture at a third party appraisal valuation. NTL
believes, however, that it has various defenses and protections under
the Bankruptcy Code against such actions and intends to enforce
vigorously its rights and protections. NTL Triangle does not have any
ownership interest in Premium TV Limited, although the condition of
Premium TV Limited can indirectly impact NTL Triangle to the extent it
impacts NTL Incorporated or NTL (Delaware), Inc., both parent companies
of NTL Triangle.

16



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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

Relationships with Suppliers

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

3.      Recent Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, effective for the
Company on January 1, 2002. This Statement superceded SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of and other related accounting guidance. The
adoption of this new standard had no effect on the results of
operations, financial condition or cash flows of the Company.

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

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations
initiated after June 30, 2001. Use of the pooling-of-interests method is no
longer permitted. SFAS No. 141 also includes guidance on the initial
recognition and measurement of goodwill and other intangible assets acquired
in a business combination that is completed after June 30,
2001.

SFAS No.
142 ends the amortization of goodwill and indefinite-lived intangible
assets. Instead, these assets must be reviewed annually (or more frequently
under certain conditions) for impairment in accordance with this statement.
This impairment test uses a fair value approach rather than the undiscounted
cash flow approach previously required by SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. The Company adopted SFAS No. 142 on January 1, 2002. Primarily due to
the significant impairment charge that the Company recorded in 2001, the
adoption of this new standard did not have a significant effect on the
results of operations, financial condition or cash flows of the Company.

Upon the adoption of SFAS No. 142, the Company performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they
should be classified and accounted for as part of or separate from goodwill.
The Company determined that license acquisition costs and customer lists
should continue to be classified separate from goodwill. The Company
determined that license acquisition costs would no longer be subject to
amortization since they are deemed to have an indefinite useful life. The
Company also determined that no changes in the remaining useful lives of the
customer lists were required.

The Company also performed an evaluation for impairment of its goodwill and
license acquisition costs as of January 1, 2002 and determined that no
impairment charge was required. The Companys next evaluation of impairment
will be the annual test as of October 1, 2002, unless there are new
indicators of impairment.

Estimated aggregate amortization expense for each of the five succeeding
fiscal years from December 31, 2001 is as follows: £13.0 million in 2002,
£13.0 million in 2003, £7.0 million in 2004,
£6.0 million in 2005 and £2.0 million in 2006.

17



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

The following table shows the Companys net loss as adjusted for the
adoption of SFAS No. 142, had SFAS No. 142 been in effect on January 1, 2001
(unaudited) (in £000s).

|                       |                           |  |                           |   |      |  |          |        | 
|---------------------- | ------------------------- |  | ------------------------- | - | ---- |  | -------- | ------ | 
|                       |                           |  | Six Months Ended June 30,
|                       |                           |  |                          
|                       |                           |  | 2002                      |   | 2001
|                       |                           |  |                           |   |     
|Net loss  as reported |                           |  | £(16,953                  | ) |      |  | £(88,881 | )     
|                      
|                      
|                      
|                      
|Amortization of:       |                           |  |                          |   |      |  |          |       
|                      
|                      
|                      
|                      
|                       | Goodwill                  |  |                           |  |      |  |          | 11,668 | 
|                      
|                      
|                      
|                      
|                       | License acquisition costs |  |                           |  |      |  |          | 3,607  | 
|                       |                           |  |                           |   |      |  |          |       
|                       |                           |  |                          |   |      |  | 15,275   |       
|                       |                           |  |                           |   |      |  |          |       
|Net loss  as adjusted |                           |  | £(16,953                  | ) |      |  | £(73,606 | )     
|                       |                           |  |                           |   |      |  |          |       

4.      Comprehensive
Income (Loss)

Consolidated comprehensive income (loss) for the three months ended June 30,
2002 and 2001 was £10.5 million and £(34.8) million,
respectively. Consolidated comprehensive loss for the six months ended June 30, 2002 and
2001 was £15.5 million and £90.3 million, respectively.

5.      Property and Equipment

Property and equipment consist of (in £000s):

|                         |  |             |          |              |  |  |          |  
|------------------------ |  | ----------- | -------- | ------------ |  |  | -------- | -
|                         |  | June 30,    |          | December 31,
|                         |  | 2002        |          | 2001        
|                         |  |             |          |             
|                         |  | (Unaudited) |          |              |  | 
|Operating equipment      |  |             | £606,559 |              |  |  | £552,713 |  
|                        
|                        
|                        
|                        
|Other equipment          |  |             | 57,110   |              |  |  | 46,644   |  
|                        
|                        
|                        
|                        
|Construction in progress |  |             | 31,607   |              |  |  | 72,265   |  
|                         |  |             |          |              |  |  |          |  
|                         |  |             | 695,276  |              |  |  | 671,622  |  
|                        
|                        
|                        
|                        
|Accumulated depreciation |  |             | (225,660 | )            |  |  | (198,146 | )
|                         |  |             |          |              |  |  |          |  
|                         |  |             | £469,616 |              |  |  | £473,476 |  
|                         |  |             |          |              |  |  |          |  

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONTINUED
(Unaudited)

6.      Intangible Assets

Intangible assets consist of (in £000s):

|                                                                                     |  |             |         |              |  |  |         | 
|------------------------------------------------------------------------------------ |  | ----------- | ------- | ------------ |  |  | ------- | 
|                                                                                     |  | June 30,    |         | December 31,
|                                                                                     |  | 2002        |         | 2001        
|                                                                                     |  |             |         |             
|                                                                                     |  | (Unaudited) |         |              |  | 
|Intangible assets not subject to amortization:                                       |  |             |         |              |  |  |         | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Goodwill                                                                             |  |             | £1,257  |              |  |  | £1,190  | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|License acquisition costs                                                            |  |             | 18,034  |              |  |  | 18,034  | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Intangible assets subject to amortization:                                           |  |             |         |              |  |  |         | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Customer lists, net of accumulated amortization of
£18,633 (2002) and £15,210 (2001) |  |             | 13,689  |              |  |  | 17,112  | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Other, net of accumulated amortization of £35,325 (2002)
and £32,495 (2001)          |  |             | 23,040  |              |  |  | 25,868  | 
|                                                                                     |  |             |         |              |  |  |         | 
|                                                                                     |  |             | £56,020 |              |  |  | £62,204 | 
|                                                                                     |  |             |         |              |  |  |         | 

7.      Related Party Transactions

In October 2000, the Companys wholly-owned subsidiary NTL Communications
(Ireland) Limited (Cablelink) entered into a loan agreement with a
subsidiary of NTL under which £74.6 million and £68.0 million had been
borrowed at June 30, 2002 and December 31, 2001, respectively. The
outstanding borrowings are due in October 2007. Interest is payable
quarterly in arrears from March 31, 2001. The annual interest rate is set on
January 1 of each year at the 12-month EURIBOR rate plus 1%. The effective
interest rate at June 30, 2002 and December 31, 2001 was 4.32% and 5.69%,
respectively. Accrued interest of £1,594,000 and £916,000 was included in
due to affiliates in the consolidated balance sheet at June 30, 2002 and
December 31, 2001, respectively.

Since the acquisition of the Company by NTL in October 1998, a subsidiary of
NTL has been providing infrastructure and management support services to the
Company. Benefits include usage of NTL network assets, network maintenance,
marketing and shared overhead. Additionally, during 2001 certain elements
of the Companys network operations and customer operations have been
integrated with NTLs national and regional operations in order for the
Company to gain the advantage of NTLs scale.

The related charges, which began in the fourth quarter of 1999, represent
the Companys 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. The
Company was charged £35.2 million and £29.9 million for the six months ended
June 30, 2002 and 2001, respectively. For 2002, £14.5 million was included
in operating costs and £20.7 million was included in selling, general and
administrative expense. For 2001, £9.9 million was included in operating
costs and £20.0 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 the Company operated as an unaffiliated
entity. In the opinion of the management of the Company, the allocation
method is reasonable.

As of June 30, 2002 and December 31, 2001, the due to affiliates balance
include payments made to third parties on behalf of the Company by a
subsidiary of NTL. The Company has reduced direct transactions with third
parties as a result of the continued integration of the Company with NTL.
The Company has therefore had its liabilities to third parties significantly
reduced, with a rise in amounts due to affiliates. The payments made on
behalf of the Company represent directly attributable expenses incurred by
the Company.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  CONCLUDED
(Unaudited)

8.      Long-term Debt

Long-term debt consists of (in £000s):

|                                 |  |             |          |              |  |  |          |  
|-------------------------------- |  | ----------- | -------- | ------------ |  |  | -------- | -
|                                 |  | June 30,    |          | December 31,
|                                 |  | 2002        |          | 2001        
|                                 |  |             |          |             
|                                 |  | (Unaudited) |          |              |  | 
|11.2% Senior Discount Debentures |  |             | £339,338 |              |  |  | £355,718 |  
|                                
|                                
|                                
|                                
|Capital lease obligations        |  |             | 2,523    |              |  |  | 3,063    |  
|                                 |  |             |          |              |  |  |          |  
|                                 |  |             | 341,861  |              |  |  | 358,781  |  
|                                
|                                
|                                
|                                
|Less current portion             |  |             | (341,861 | )            |  |  | (358,781 | )
|                                 |  |             |          |              |  |  |          |  
|                                 |  |             | £       |              |  |  | £       |  
|                                 |  |             |          |              |  |  |          |  

Due to uncertainties about the compliance with the terms and conditions of
the Companys debt that would give the holders of the debt the right to
accelerate repayment, all of the Companys long-term debt has been
classified as current. (See Note 2.)

9. Contingencies

The Company is involved in legal proceedings and claims which arise in the
ordinary course of its business. In the opinion of management, the amount of
ultimate liability with respect to these actions will not materially affect
the financial position, results of operations or liquidity of the Company.





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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002




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

Overview

NTL (Triangle) LLC (NTL Triangle or the Company) is a holding company
which holds all of the shares of various companies principally engaged in the
development, construction, management and operation of broadband
communications networks for telephone, cable television and Internet services
in the United Kingdom (UK) and Ireland. The Company owns the companies that
have franchises for Darlington and Teesside (collectively, Teesside) and
Cambridge in the UK, and NTL Communications (Ireland) Limited (formerly
Cablelink Limited) (Cablelink), which owns the companies that provide
services in Dublin, Galway and Waterford, Ireland. The Company is an
indirect, wholly-owned subsidiary of NTL Incorporated. Throughout
this report, NTL Incorporated together with its consolidated
subsidiaries are referred to as NTL.

Key points concerning NTLs current financial
condition and NTLs planned
recapitalization include:

Financial Condition

     NTL Incorporated and its subsidiaries have issued and outstanding
approximately $11.5 billion in senior and subordinated notes and
debentures.

     NTLs UK credit facilities are fully drawn and the revolving tranche
of the Cablecom facility has been capped at its utilized amount of CHF
1,055.0 million. The term tranche of the Cablecom facility is fully
drawn.

     NTL has missed
interest payments totaling $381.5 million beginning on
April 1, 2002.

     In accordance with the proposed recapitalization plan, NTL does not
plan to make future interest payments on its currently outstanding
publicly traded notes except notes issued by NTL Triangle and, upon
emergence from Chapter 11 proceedings, Diamond Holdings Limited.

     As of May 8, 2002, the date of its Chapter 11 filing, NTL was in
default of $95.4 million in interest in respect of $1,693.4 million in
principal amount of its indebtedness.

Recapitalization Plan

     On May 8, 2002, NTL Incorporated and a number of its subsidiaries,
namely, NTL (Delaware), Inc., NTL Communications Corp., Diamond Cable
Communications Limited, Diamond Holdings Limited and Communications
Cable Funding Corp., filed a pre-arranged joint reorganization plan
under Chapter 11 of the United States Bankruptcy Code.

     Under the proposed reorganization plan, NTL will be split into two
companies, one holding all of its main UK and Ireland assets
(tentatively referred to as NTL UK and Ireland), and the other holding
various continental European and other assets (tentatively referred to
as NTL Euroco).

     Holders of notes of NTL Incorporated, NTL (Delaware), Inc., NTL
Communications Corp. and Diamond Cable Communications would receive 100%
of the initial common stock of NTL UK and Ireland and approximately
86.5% of NTL Euroco.

     Holders of notes of NTL (Delaware), Inc. would have the option to
reinvest all or a portion of NTL (Delaware), Inc. cash in additional shares of common stock or to receive such cash in the recapitalization.

     Common and preferred stockholders, including France Telecom, would
participate in a package of rights (to be priced at a $10.5 billion
enterprise value) and warrants entitling them to purchase primary common
stock of NTL UK and Ireland. If fully exercised, those rights and
warrants would entitle the current preferred
stockholders to acquire approximately 23.6% and the current common
stockholders to acquire approximately 8.9% of NTL UK and

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FORM 10-Q
QUARTER ENDED JUNE 30, 2002

Irelands common
stock. Current preferred stockholders, other than France Telecom, would
receive approximately 3.2% and current common stockholders, other than France
Telecom, would receive approximately 10.3% of the primary equity of NTL
Euroco.

     Under the
reorganization plan, NTL will convert approximately $10.9 billion
of debt to equity, thereby reducing NTL UK and Irelands debt to
approximately $5.8 billion (projected pro forma net debt as of September
1, 2002 as per the amended disclosure statement filed on July 15, 2002)
which will consist of mortgage notes, amounts owed under the UK credit
facilities and Diamond Holdings and NTL Triangle notes and the projected
exit facility.

     Under the reorganization plan, NTL Eurocos debt will consist of the
Cablecom credit facility of CHF 1,055.0 million.

     The Bankruptcy Court approved the proposed debtor in possession
financing in the principal amount of $630 million in an order dated July
3, 2002. The DIP facility was entered into on July 15, 2002.

     At a hearing on July 12, 2002, the Bankruptcy Court approved the
Debtors amended disclosure statement.

     The confirmation hearing in respect of the Debtors second amended
joint reorganization plan, filed with the Bankruptcy Court on July 15,
2002, has been scheduled for September 5, 2002.

Liquidity and Capital Resources

Recapitalization Process and Ability to Continue Operations

On May 8, 2002, NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited and
Communications Cable Funding Corp. filed a pre-arranged joint reorganization
plan under Chapter 11 of the United States Bankruptcy Code (referred to as
the proposed recapitalization plan). NTL Triangle and NTLs operating
subsidiaries were not included in the Chapter 11 filing. Toward the end of
2001, while NTL continued to have sufficient liquidity to meet its near term
obligations, it recognized the negative impact of the collapsing European and
U.S. telecommunications markets on its ability to service its debt.
Accordingly, NTL began to implement a strategy to preserve and maximize its
enterprise value. This strategy included the implementation of cost-cutting
measures and the commencement of discussions with certain third parties
regarding strategic alternatives for NTLs business.

The Company historically incurred operating losses and negative operating
cash flow. In addition, the Company has required significant amounts of
capital to finance construction of its networks, connection of customers to
the networks, other capital expenditures and for working capital needs
including debt service requirements. The Company historically met these
liquidity requirements through issuances of high-yield debt securities in the
capital markets and equity contributions and loans from NTL Communications
Corp., a wholly-owned subsidiary
of NTL Incorporated. Both the equity and debt capital markets have
experienced periods of significant volatility, particularly for securities
issued by telecommunications and technology companies. The ability of
telecommunications companies to access those markets as well as their ability
to obtain financing provided by bank lenders and equipment suppliers has

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FORM 10-Q
QUARTER ENDED JUNE 30, 2002

become more restricted and financing costs have increased. During some recent
periods, the capital markets have been largely unavailable to new issues of
securities by telecommunications companies. NTL Incorporateds public equity
is no longer trading on the New York Stock Exchange, and its debt securities
are trading at or near all time lows. These factors, together with NTLs
substantial leverage, means the Company does not currently have access to its
historic sources of capital.

In addition, NTLs UK credit facilities are fully drawn. The revolving
tranche of the Cablecom credit facility has been capped at its utilized
amount of CHF 1,055.0 million although the availability may be increased with
the consent of the requisite majority of the lenders under that facility. The
term tranche of the Cablecom credit facility is fully drawn. NTL has
missed interest payments totaling $381.5 million beginning on
April 1, 2002. Upon emerging from
Chapter 11 proceedings, NTL intends to make any required interest payments on
the notes of Diamond Holdings. In accordance with the proposed
recapitalization plan, NTL does not plan to make future interest payments on
its currently outstanding publicly traded notes except notes issued by NTL
Triangle and, upon emergence from Chapter 11 proceedings, Diamond Holdings
Limited.

As of June 30, 2002, NTL Triangle had approximately £25.6 million in cash and
cash equivalents on hand. NTL Triangle may require additional cash in the
twelve months from July 1, 2002 to June 30, 2003. NTL Incorporated obtained
a Court approved $630 million DIP facility (described below) on July 15, 2002
to meet the potential cash requirements of its and its subsidiaries,
excluding Cablecom. NTL Incorporated expects that the DIP facility will be
replaced with an exit facility for NTL Communications Corp. and its
subsidiaries, including NTL Triangle, upon the completion of the recapitalization
process, in part because the DIP facility will mature concurrently with the
Debtors emergence from Chapter 11. NTL Triangle estimates that its capital
expenditures and debt service requirements, net of cash from operations, will
aggregate up to approximately £23.7 million from July 1, 2002 to June 30,
2003. Management of NTL Triangle believes that cash and cash equivalents on
hand at June 30, 2002, and the cash available from the DIP facility and
subsequently the planned exit facility will be sufficient for its and its
subsidiaries cash requirements during the twelve months from July 1, 2002 to
June 30, 2003.

Events Leading to the Proposed Recapitalization and Chapter 11 Filings

Beginning in January 2002, NTL was contacted by an unofficial committee of
bondholders regarding the commencement of a comprehensive and consensual
restructuring process. NTL was informed at that time that the members of the
unofficial steering committee of bondholders owned, in the aggregate, more
than 50% of the outstanding principal amount of NTLs notes. In connection
with the restructuring process, the steering committee of the unofficial
committee of bondholders retained advisors to facilitate the negotiations.

On January 31, 2002, NTL announced that it had appointed Credit Suisse First
Boston, JP Morgan and Morgan Stanley to advise on strategic and
recapitalization alternatives to strengthen its balance sheet and reduce debt
and put an appropriate capital structure in place for its business.
Subsequently, NTL evaluated various recapitalization alternatives, and met
with a number of strategic investors, to effect a comprehensive consensual
reorganization in a timely manner to minimize negative effects on its
business operations. Discussions with such strategic investors did not result
in a proposal which NTLs board of directors believed was comparable
or superior to the value provided to its stakeholders by the proposed plan of
reorganization.

Liberty Media Corporation, one of such potential strategic investors, which
is also a significant shareholder in Telewest plc, another British cable and
telephone company, has discussed various transactions with NTL from time to
time over the past several years. In March 2002, Liberty and NTL amended a
previously existing confidentiality

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FORM 10-Q
QUARTER ENDED JUNE 30, 2002

agreement between them to cover the
restructuring process and to include a standstill agreement which
prohibited various acquisitions of, or offers, for NTL debt or equity
securities by Liberty and its subsidiaries until June 30, 2002.

On April 17, 2002, Liberty sent a proposal to NTLs board of directors, which
proposed a cash tender offer for 30% of the outstanding bonds of NTL
Communications Corp. at a small premium to the prevailing market price and
an agreement to vote such acquired bonds in favor of the proposed plan of
reorganization, as well as a participation with NTL in a cash infusion of
up to $500 million into Cablecom. After consultation with NTLs board
of directors and the steering committee of bondholders on April 18, 2002, NTL
indicated to Liberty that it did not consider the Liberty proposal to be in
the best interests of NTL and that the best course of action for NTL to
maximize its enterprise value was to promptly consummate the proposed plan of
reorganization. By letter dated June 28, 2002, NTL received notice that
Liberty was ceasing all discussions with NTL concerning its proposals.

Promptly upon obtaining the requisite waivers from the lenders under its
credit facilities, in March 2002, NTL commenced negotiations with the
steering committee of the unofficial committee of bondholders and its legal
and financial advisors. The negotiations continued during the latter part of
March and throughout April 2002, and also included France Telecom. On April
16, 2002, NTL announced that it had reached a comprehensive agreement in
principle with the unofficial committee and France Telecom, a significant
holder of NTL Incorporateds preferred stock, on implementing a
recapitalization plan. On May 2, 2002, a steering committee of the lending
banks under NTLs credit facilities gave their approval in principle (on a
non-legally binding basis) to NTLs proposed plan of reorganization.

The reorganization plan, if implemented, will result in the cancellation of
all of NTL Incorporateds outstanding shares of common stock, preferred stock
and redeemable preferred stock, and the cancellation of all of the publicly
held notes of NTL Incorporated, NTL (Delaware), Inc. and NTL Communications
Corp. and the transfer of the publicly held notes of Diamond Cable
Communications Limited to NTL UK and Ireland (one of two new entities to be
created under the plan). In addition, if the plan is implemented, NTL will be
discharged from its obligation to pay dividends accruing on the canceled
preferred stock and interest accruing on the canceled notes. The
reorganization plan contemplates that the UK bank debt will remain in place
as part of the recapitalization. NTL would be split into two companies, one
tentatively called NTL UK and Ireland, holding its main UK and Ireland
assets, and one tentatively called NTL Euroco, holding certain of its
continental European and other assets.

To implement the proposed recapitalization, on May 8, 2002, NTL Incorporated,
NTL (Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
Limited, Diamond Holdings Limited and Communications Cable Funding Corp.,
which we refer to as the Debtors, filed cases and a pre-arranged joint
reorganization plan under Chapter 11 of the United States Bankruptcy Code.
NTL Triangle and NTLs operating subsidiaries were not included in the
Chapter 11 filings.

On June 21, 2002, the United States Trustee appointed an official unsecured
creditors committee. The creditors committee is comprised of the three
indenture trustees for the debt securities of NTL and the ten members of the
steering committee of NTLs bondholders. The members of the creditors
committee are: The Bank of New York; Wilmington Trust Company; Wells Fargo
Bank Minnesota, National Association; Angelo Gordon & Co. LP; Capital
Research & Management Company; Franklin Mutual Advisers, LLC; Oaktree Capital
Management LLC; Salomon Brothers Asset Management; Appaloosa Management, LP;
Fidelity Management & Research Co.; MacKay Shields LLC; SAB Capital
Management, L.P.; and W.R. Huff Asset Management Co., LLC.

On May 24, 2002, the Debtors filed an amended joint reorganization plan and
disclosure statement. The bankruptcy court approved the disclosure statement
on July 12, 2002 as containing information of a kind and in sufficient detail
to enable the holders of claims against or interests in the debtors to make
an informed judgment with respect to the reorganization plan prior to
exercising their right to vote to accept or reject the reorganization plan.
At that time the Court set September 5, 2002 as the date for the hearing to
consider confirmation of the amended joint reorganization plan as
subsequently amended. On July 15, 2002, NTL Incorporated and its debtor
subsidiaries filed an amended

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FORM 10-Q
QUARTER ENDED JUNE 30, 2002

disclosure statement and a second amended joint
reorganization plan. A copy of the second amended joint reorganization plan
and the related disclosure statement are included as exhibits to NTL
Incorporateds Current Report on Form 8-K filed on July 16, 2002.

The filing of the petitions seeking relief filed under Chapter 11 constituted
an event of default under the indentures of each of the entities which filed
Chapter 11 petitions and amounts outstanding under these indentures became
immediately due and payable. No action has been taken to date in respect of
those defaults and any such action likely would be barred by the automatic
stay that exists by virtue of the Chapter 11 filings. The filing of the
Debtors Chapter 11 petitions also constituted an event of default under
NTLs UK credit facilities and the Cablecom credit facility, allowing the
lenders thereunder to declare amounts outstanding to be immediately payable.
Those lenders have not taken any action to date in respect of those defaults,
and a steering committee of those lenders has agreed in principle (in a
non-legally binding manner) to the proposed recapitalization.

Recapitalization Expense

A subsidiary of NTL in the UK has incurred
recapitalization expenses of approximately £23 million through
June 30, 2002, including approximately £13 million for employee
retention related to substantially all of NTLs UK employees and
approximately £10 million for financial advisor, legal,
accounting and consulting costs. NTL Triangle expects to be charged
in the third quarter of 2002 for its share of these expenses as well
as expenses incurred after June 30, 2002.

NTL expects to incur approximately $50.0 million in
additional recapitalization costs until the completion of the
process. The proposed joint reorganization plan provides that
recapitalization costs will be allocated between NTL UK and Ireland
and NTL Euroco.

DIP Facility

In connection with the proposed joint reorganization plan, some members of
the official unsecured creditors committee of bondholders committed to
provide up to $500 million of new debt financing to NTL Incorporated and some
of its subsidiaries during the Chapter 11 process. The new
financing will ensure
that NTLs business operations have access to sufficient liquidity to
continue ordinary operations. GE Capital, an affiliate of GE Capital
Structured Finance Group Limited, one of the lenders under the Senior Credit
Facility, and Wilmington Trust Company, the trustee under the Indentures
governing certain of the NTL Incorporated subordinated notes, filed
objections to the DIP facility. The Bankruptcy Court approved the DIP
facility in the principal amount of $630 million (including a $130 million
commitment from NTL (Delaware), Inc. and the $500 million from certain
members of the creditors committee) over such objections in an order issued
on July 3, 2002. On July 15, 2002, the various lenders under the DIP facility
and NTL (Delaware), Inc., entered into the DIP facility agreement with
Communications Cable Funding Corp., a wholly-owned subsidiary of NTL
Communications Corp., to provide $630 million in financing to Communications
Cable Funding Corp.

In connection with the commitment, NTL Incorporated and its debtor
subsidiaries were to pay a commitment fee to the bondholder DIP lenders equal
to 2% of the $500 million commitment (i.e., $10 million). Accordingly, on May
6, 2002, and May 7, 2002, NTL delivered to its bank written instructions to
pay by wire transfer to each lender under the DIP facility such lenders pro
rata portion of the commitment fee. Due to administrative difficulties,
however, some of the lenders under the DIP facility did not receive their pro
rata portion of the commitment fee prior to the commencement of the Chapter
11 cases. In total, as of May 8, 2002, $428,000 of the $10 million commitment
fee had not been paid to the applicable lenders under the DIP facility.
Pursuant to an order of the court dated May 31, 2002, the remaining $428,000
of the commitment fee was paid to the applicable lenders under the DIP
facility.

Each term loan under the DIP facility will bear interest on the unpaid
principal amount for three months from July 15, 2002 at the rate of 11% per
annum. With respect to each successive three month period following that
date, the rate per annum will increase incrementally by 1% over the
immediately preceding three month period but will not exceed 18% per annum
for any three month period.

NTL (Delaware), Inc. is also a lender under the DIP facility and will lend up
to $130 million. NTL (Delaware), Inc. has cash on hand and, because the
Chapter 11 cases are not substantively consolidated, NTL Incorporated and its
debtor subsidiaries and the steering committee of bondholders have concluded
that the cash at NTL (Delaware), Inc. is to be used to partially fund the
reorganization of all of the debtors. NTL (Delaware), Inc. will receive
interest and is entitled to the same protections as the other bondholder DIP
lenders.

Under the DIP facility agreement, Communications Cable Funding is the
borrower, and the other debtors (other than Diamond Cable and Diamond
Holdings) are guarantors, except that NTL Communications Corp. is also a
co-obligor of the loans from NTL (Delaware), Inc. Under the DIP facility
agreement, the cash (except for the DIP facility

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FORM 10-Q
QUARTER ENDED JUNE 30, 2002

proceeds) of the borrower
and the guarantors will be cash collateral for the DIP facility and will not
be used or transferred for any purpose whatsoever without the consent of the
bondholder DIP lenders. All funding needs of the Debtors will be funded
through the proceeds of the DIP facility, in accordance with a budget and the
terms of the DIP facility agreement.

Under the DIP facility agreement, the loan structure contains three tranches
that rank equally with each other. All amounts owed under the DIP facility
agreement are required to be paid in full no later than the earlier of (i)
the consummation of the reorganization plan, (ii) December 1, 2002, and (iii)
the date on which all of the term loans become due and payable in full under
the DIP facility agreement, whether by acceleration or otherwise.

On July 17, 2002, NTL drew the first tranche available under the facility in
the amount of $229.0 million.

A copy of the DIP facility agreement was attached as an exhibit to Form 8-K
filed by NTL Incorporated with the Commission on July 19, 2002.

Exit Facility

Because of the short maturity of the DIP facility and the longer term
liquidity needs of NTL, as well as the requirements under the Bankruptcy Code
for confirmation of and the conditions to consummation of NTLs proposed
plan, NTL will require the reorganized NTL to enter into an exit financing
facility. The exit financing or any alternative financing would refinance (at
least in part) the DIP facility and may be used as consideration for the
refinancing of a £90 million note payable to NTL (Delaware), Inc. from NTL
(UK) Group Inc. Because of the present market conditions which are
unfavorable to telecommunications companies generally, there can be no
assurance that NTL will successfully obtain an acceptable exit facility,
although NTL is presently in discussions with various parties about
alternatives.

NTL expects that the exit facility may be secured by various assets of the
reorganized NTL, including those which secure the DIP facility, would rank
senior to all current and future subordinated debt of the reorganized NTL.

NTL also expects that the exit facility would impose operating and financial
restrictions on the reorganized NTL and its subsidiaries. These restrictions
would significantly limit or prohibit, among other things, the reorganized
NTLs ability to incur additional indebtedness, pay dividends, or make
distributions in respect of capital stock, make other restricted payments,
enter into sale and leaseback transactions, create liens upon assets, enter
into transactions with affiliates or related persons, sell assets, or
consolidate, merge, or sell all or substantially all of their assets. The
exit facility also likely would require the reorganized NTL to satisfy
financial covenants on an ongoing basis. NTL cannot determine at this time
whether these financial covenants would have a material impact on the
reorganized NTLs ability to finance future operations or capital needs or to
engage in other business activities.

The terms, covenants, and conditions of an exit facility have not been
finalized and remain subject to negotiation and final documentation.

Proposed Recapitalization Plan

Under the proposed recapitalization plan, NTL would be split into two
companies, one tentatively called NTL UK and Ireland and holding
substantially all of NTLs UK and Ireland assets, and one tentatively called
NTL Euroco and holding substantially all of NTLs continental European and
other assets.

Holders of notes of NTL Incorporated (other than France Telecom), NTL
(Delaware), Inc. (other than France Telecom), NTL Communications Corp. and
Diamond Cable Communications Limited would in the aggregate receive 100% of
the initial common stock of NTL UK and Ireland (excluding shares issuable in
the rights offerings and upon the exercise of warrants (discussed below) and
upon the exercise of options which will be granted to certain

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

employees of
NTL UK and Ireland). Holders of notes of NTL Incorporated (other than France
Telecom), NTL (Delaware), Inc. (other than France Telecom) and NTL
Communications Corp. would in the aggregate receive (i) 100% of the preferred
stock of NTL Euroco and (ii) a certain amount of cash as specified in the
amended joint reorganization plan. Holders of the subordinated notes of NTL
Incorporated (other than France Telecom), NTL (Delaware), Inc. (other than
France Telecom) and NTL Communications Corp. would in the aggregate receive
86.5% of the initial common stock of NTL Euroco (excluding shares issuable
upon the exercise of options which will be granted to certain employees of
NTL Euroco). Holders of senior notes of NTL Communications Corp. would
receive the value of a specified number of shares of common stock of NTL
Euroco pursuant to the amended joint reorganization plan. Notes of NTL
Triangle and Diamond Holdings Limited, an indirect wholly-owned subsidiary of
NTL Incorporated would remain outstanding and interest payments will be made.

Current preferred and common stockholders of NTL Incorporated, including
France Telecom, would receive warrants to purchase common stock of NTL UK and
Ireland and rights entitling them to purchase common stock of NTL UK and
Ireland. For each share of common stock purchased upon exercise of rights,
the person exercising such rights will receive a warrant to purchase one
share of common stock of NTL UK and Ireland. The rights will be exercisable,
on an oversubscription basis, for the 20-business day period after the entry
of the confirmation order, as such period may be extended, and the warrants
will be exercisable for a period of eight years at an exercise price of
$77.47 per share. The number of shares to be received upon exercise of the
warrants is subject to customary adjustments for stock splits, stock
recapitalizations and distributions of property (other than cash) to holders
of NTL UK and Ireland Common Stock. If fully exercised, the rights and
warrants would entitle the current preferred stockholders of NTL Incorporated
to acquire approximately 23.6% and the current common stockholders of NTL
Incorporated to acquire approximately 8.9% of NTL UK and Irelands primary
common stock on the effective date of the recapitalization. Holders of the
subordinated notes of NTL Incorporated (other than France Telecom), NTL
(Delaware), Inc. (other than France Telecom), and NTL Communications Corp.
would have the right to purchase any shares of NTL UK and Ireland common
stock and warrants not subscribed for in the rights offering by the preferred
and common stockholders of NTL Incorporated. It is expected that the warrants
will be listed or quoted on the same exchange or inter-dealer quotation
system as the shares of common stock of the reorganized NTL. NTL has had
preliminary conversations with the New York Stock Exchange regarding the
listing of the common stock of NTL UK and Ireland on the Exchange following
the effective date of its plan of reorganization. Based on these preliminary
conversations there has been no indication from the New York Stock Exchange
that NTL UK and Ireland will qualify for listing on the Exchange. There can
be no assurance that shares of NTL UK and Ireland common stock and/or Series
A warrants will be listed on an exchange or be eligible for trading on an
inter-dealer quotation system on the effective date of the bankruptcy or at
any time thereafter or that an orderly trading market will develop for these
securities.

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

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

Section 1129 of the United States Bankruptcy Code requires, among other
things, a showing that confirmation of the proposed recapitalization plan
will not be followed by liquidation or the need for further financial
reorganization of NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited or Diamond Holdings Limited, and
that the value of distributions to dissenting holders of claims and interests
may not be less than the value such holders would receive in a liquidation
under Chapter 7 of the United States Bankruptcy
27Table of ContentsNTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002Code. Although NTL believes
that the proposed recapitalization plan will meet these tests, there can be
no assurance that the Bankruptcy Court will reach the same conclusion.The United States Bankruptcy Code also requires that a plan must provide the
same treatment for each claim or interest in a particular class, unless a
holder agrees to a less favorable treatment of its particular claim or
interest. NTL believes that the proposed recapitalization plan complies with
this requirement of the United States Bankruptcy Code. However, if a member
of a class objects to its treatment, or if the Bankruptcy Court finds that
the proposed recapitalization plan does not comply with the requirements of
the United States Bankruptcy Code, confirmation of the plan could be delayed
or prevented. In addition, each class of impaired claims and interests that
will (or may) be entitled to receive property under the plan will have the
opportunity to vote to accept or reject the plan. If an impaired class of
claims or interests rejects the plan, NTL may request confirmation of
the plan pursuant to the cramdown provisions of the United States
Bankruptcy Code. Even if the requirements for cramdown are met, the
Bankruptcy Court, which, as a court of equity may exercise substantial
discretion, may choose not to confirm the plan. These can be no assurance
that the proposed recapitalization plan will be confirmed.Bank WaiversBefore NTL could commence negotiations with the unofficial committee of
bondholders, it was necessary to obtain waivers from the lenders under NTLs
credit facilities. Effective March 8, 2002, these lenders granted waivers
which, until March 29, 2002, provided that the commencement of negotiations
with bondholders with a view to rescheduling its debt would not constitute an
event of default under the credit facilities. Such initial waivers did not
permit NTL to make to any of its bondholders an exchange or similar offer for
NTLs outstanding public notes or to enter into a legally binding agreement
with the unofficial steering committee of bondholders, subject to some
exceptions, without the consent of the lenders under the credit facilities.
But for the initial waivers, the commencement of negotiations with
bondholders would have been an event of default under the credit facilities.Effective March 28, 2002, the lenders under the credit facilities agreed to
amend the initial waivers. The amendments to the initial waivers extended the
duration of the initial waivers to April 29, 2002 in the case of the UK
credit facilities or May 14, 2002 in the case of the Cablecom credit
facility, unless the interest payments missed by NTL Communications Corp. on
April 1, 2002 were remedied or a sufficient number of bondholders agreed to
forbear in respect of such non-payment, in which case, the UK credit
facilities waivers were to be extended to May 14, 2002. As a condition to the
amendment to the initial waivers, the UK lenders required NTL (Delaware),
Inc. to loan £90 million to NTL (UK) Group, Inc. following receipt of the
proceeds from the sale of NTL Australia. Such loan was actually made (with
the approval of the lenders under the UK credit facilities) to NTL (UK)
Group, Inc. and then on-lent to certain subsidiaries of NTL (UK) Group, Inc.
This loan, which was
made on April 5, 2002, is structurally senior to the outstanding public notes
issued by NTL Communications Corp. and contractually senior to intra-group
debt owed by NTL (UK) Group, Inc. to NTL Communications Corp. but
contractually subordinated to the UK credit facilities. In connection with
the amendments to the waivers, NTL affirmed the provisions of the initial
waivers and agreed, among other things, not to commence voluntary dissolution
proceedings, including proceedings under Chapter 11 of the United States
Bankruptcy Code, without the consent of these lenders.As of the date of this Form 10-Q, there are no current waivers from NTLs
secured lenders and NTL is therefore in default under its UK credit
facilities and the Cablecom credit facility. In connection with the proposed
recapitalization plan, it is intended that the existing events of default
under the credit facilities will be cured by amendment with effect from the
effective date of the recapitalization, if it is approved by creditors and
the Bankruptcy Court. On May 2, 2002, a memorandum was executed by NTL, a
steering committee of its lending banks and the unofficial committee of its
public bondholders indicating the parties agreement in principle (on a
non-legally binding basis) to the terms of the proposed recapitalization and
the terms on which the Companys UK credit facilities should be amended and
restated and with respect to certain matters relating to the sale of, or
investment in, Cablecom.28Table of ContentsNTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002Cablecom GmbH, an indirect wholly-owned subsidiary of NTL (Delaware), Inc.,
is the principal trading company of NTLs Swiss group. NTL Triangle does not
have any ownership interest in this group, although the condition of this
group can indirectly impact NTL Triangle to the extent it impacts NTL
Incorporated or NTL (Delaware), Inc., both parent companies of NTL Triangle.
There were a number of technical defaults under the Swiss credit facility
made available to Cablecom and various of its subsidiaries. In addition, as
of December 31, 2001, Cablecoms and six of its direct and indirect
subsidiaries liabilities exceeded their respective assets. As a consequence,
under Swiss law, those entities were deemed to be overindebted. This also
constituted an event of default under the Cablecom credit facility, which
entitled the lenders to accelerate repayment. Such an acceleration would have
resulted in an event of default under NTL Incorporateds and NTL (Delaware),
Inc.s 5.75% convertible subordinated notes due 2011 and 5.75% convertible
subordinated notes due 2009.Under Swiss law, the board of directors of an overindebted company is
generally obliged to notify a judge of overindebtedness so that the judge may
either institute insolvency proceedings or postpone such adjudication and
take appropriate measures to preserve the value of the assets. An
overindebted company is not required to notify a judge if the creditors of
the overindebted entity subordinate their claims in the amount of the
overindebtedness.The problem of overindebtedness was resolved on June 26 and June 27, 2002 in
certain of the overindebted subsidiaries when they were merged into Cablecom
and other members of the Cablecom group. The remaining overindebted
subsidiaries were not merged but the overindebtedness issue was resolved in
those subsidiaries by way of subordination agreements which obviated any
requirement to institute insolvency proceedings in respect of these
companies.At the end of April 2002 the defaults subsisting at that time were remedied
or were waived by the restatement of the credit agreement and the grant of a
waiver letter. However, conditions subsequent such as the grant of new
security and the deposit of share certificates relating to minority
shareholdings pledged to the banks were imposed by these documents and other
new finance documents executed pursuant to the restatement.Since the end of April 2002 the following defaults have occurred under the
Cablecom finance documents: (1) The indentures issued by NTL (Delaware), Inc.
and NTL Incorporated have become payable and have not been paid; (2) NTL
(Delaware), Inc. has commenced negotiations with its creditors with a view to
the general rescheduling of its indebtedness and has commenced proceedings
under Chapter 11 of the U.S. Bankruptcy Code pursuant to which it intends to
reorganize its debt; (3) NTL (Delaware), Inc. has liabilities which exceed
the value of its assets and is unable to pay its debts as they fall due; (4)
Cablecom was unable to satisfy the conditions to allow it
to rollover revolving advances maturing in early July 2002. The revolving
advances remained unpaid for several days until Cablecom was able to obtain
the consent of the banks to waive the conditions to their rollover; (5)
Certain of the conditions subsequent imposed by the restated credit
agreement, the waiver letter and other finance documents executed pursuant to
the restated credit agreement have yet to be fulfilled.The outstanding defaults under the Cablecom finance documents entitle the
facility agent to demand repayment of the loan and enforce the security
granted to secure that loan. The facility agent has discretion to take those
steps and can be compelled to take those steps by a group of banks holding at
least 66-2/3% in aggregate of the loan.Future developments in Cablecoms business, as well as external factors,
could result in a reemergence of the over indebtedness issue under Swiss law.29Table of ContentsNTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002Interest Payments on Public NotesNTL has substantial interest payment obligations under its existing
indebtedness. NTL Incorporated and certain of its subsidiaries did not make their scheduled interest payments on the
respective due dates as follows:

|                                                    |  |                         |  |              
|--------------------------------------------------- |  | ----------------------- |  | -------------
|April 1, 2002:                                      |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008   |  | $8.6 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008  |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% notes due 2010  |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $74.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|April 15, 2002:                                     |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005  |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware),
Inc., co-obligor) |  | 5-3/4% notes due 2011   |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $20.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|May 15, 2002:                                       |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/4% notes due 2006   |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 6-3/4% notes due 2008   |  | $38.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-7/8% notes due 2009   |  | $15.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $65.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|June 15, 2002:                                      |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 11-3/4% notes due 2005  |  | $31.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 7% notes due 2008       |  | $17.1 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL (Delaware), Inc.                                |  | 5-3/4% notes due 2009   |  | $34.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $82.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|July 15, 2002:                                      |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware),
Inc., co-obligor) |  | 5-3/4% notes due 2011   |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|August 1, 2002:                                     |  |                         |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2006  |  | $60.4 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/8% notes dues 2008 |  | $18.3 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 10% notes due 2008      |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 9-1/8% notes due 2008   |  | $5.0 million 
|                                                   
|                                                   
|                                                   
|                                                   
|August 15, 2002:                                    |  | Total                   |  | $94.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 10% notes due 2007      |  | $20.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 10-3/4% notes due 2007  |  | $22.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                   |  | $42.6 million

Interest payments of $18.9 million were made, when due, on April 2, 2002 in
respect of Diamond Cable Communications 13.25% senior discount notes due
2004. Upon emerging from Chapter 11 proceedings, NTL
intends to make any required interest payments on the notes of Diamond
Holdings Limited. In accordance with the proposed recapitalization plan, NTL
does not plan to make future interest payments on its currently outstanding
publicly traded notes except notes issued by NTL Triangle and, upon emergence
from Chapter 11 proceedings, Diamond Holdings Limited.

If the applicable issuer does not pay interest on these notes after a 30 day
grace period expires there is an event of default under the indenture in
respect of the notes on which the interest is due and unpaid. An event of
default entitles

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

the trustee under the indenture or the holders of 25% of the
outstanding notes to declare the principal amount of those notes to be
immediately due and payable. Even if the maturity of those notes is not
accelerated after the 30 day grace period, such an event of default would
also result in an event of default in respect of other debt (commonly called
cross defaults) under most of NTLs other notes. Therefore, there was an event
of default for failure to pay interest on May 1, 2002 under the indentures
relating to the missed interest payments due April 1, 2002 and on May 16,
2002, under the indentures relating to the missed interest payments due April
15, 2002. As a result, cross defaults occurred under NTLs other indentures
at NTL Communications Corp., NTL (Delaware), Inc., NTL Incorporated and under
NTLs UK credit facilities and under the Cablecom credit facility. This gave
holders of the outstanding series of debt at these entities the right to
accelerate repayment of those debts by declaring the principal amount of the
debts to be immediately due and payable. As a result of the payment defaults
as well as NTLs voluntary filing under Chapter 11 of the United
States Bankruptcy Code on May 8, 2002, there is an event of default under all
of NTLs credit facilities and the indentures governing all of NTLs publicly
traded debt, other than debt of NTL Triangle. As a result of the Chapter 11
filings, all of NTLs publicly traded debt, other than the debt of NTL
Triangle, became immediately due and payable, pursuant to the terms of the
indentures governing such debt. The automatic stay of Section 362 of the
United States Bankruptcy Code prevents the holders of such debt from seeking
to enforce their collection rights under the indentures, except within the
context of the Chapter 11 cases, and even then only with the prior approval
of the Bankruptcy Court. However, NTL has received letters from the agents
for the lenders under the UK credit facilities reserving such lenders rights
to accelerate repayment of the facilities and to enforce the security granted
in respect of the facilities on account of the defaults thereunder, actions
which would not be prohibited by the automatic stay.

Credit Rating Downgrades

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

Delisting of NTL Incorporated Common Stock

On March 28, 2002, the New York Stock Exchange (NYSE) announced that it was
suspending NTL Incorporateds common stock from trading on the NYSE. This
determination was based upon, among other things, the selling price of NTL
Incorporateds common stock, which closed at $0.20 on March 26, 2002. The
continued listing standards of the NYSE, which were applicable to NTL
Incorporated, required maintenance of a minimum share price of $1.00 over a
30 trading day period and average global market capitalization of $100
million over a 30 trading day period. NTL Incorporateds common stock fell
below both of these continued listing standards. In addition, on May 9, 2002,
Nasdaq Europe halted trading of the NTL Incorporateds common stock pending
receipt of information relating to the restructuring process because of the
filing of NTL Incorporateds Chapter 11 cases. NTL has complied with this
information request, although there can be no assurance that Nasdaq Europe
will (1) not make additional information requests, (2) remove the trading
halt on shares of NTL Incorporateds common stock or (3) not delist shares of
NTL Incorporateds common stock. NTL Incorporateds common stock is currently
quoted on the Over the Counter Bulletin Board under the symbol NTLD.

Sale of NTL Australia

On April 2, 2002, NTL announced that it had completed the previously
announced sale of its Australian broadcast business to Macquarie
Communications Infrastructure Holding Pty Limited for A$850 million (US$451.3
million). The net proceeds from the sale were approximately A$575.3 million
(US$304.5 million). At that time, the business bank debt outstanding totaled
A$227.3 million (US$121.7 million). NTL Triangle did not have any ownership
interest in NTL Australia.

On April 5, 2002, NTL (Delaware), Inc. loaned £90 million to NTL (UK) Group
Inc., which loan was funded by the proceeds of the sale of NTL Australia.
This loan is subordinated to NTLs UK credit facilities. The
remaining

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

proceeds of the sale of NTL Australia remain at NTL (Delaware),
Inc., and the proposed plan of reorganization anticipates that such proceeds
will form a portion of the consideration to be offered to bondholders of NTL
(Delaware), Inc. and NTL Incorporated in satisfaction of their claims against
those companies.

Potential Sale of, or Outside Investment in, Cablecom

It has been agreed to engage UBS Warburg LLC by August 31, 2002 to advise in
connection with an outside investment in, or sale of all or part of,
Cablecom. As part of this process, NTL (Delaware), Inc. and certain of its
subsidiaries have agreed to approve any such outside investment or sale,
which is acceptable to the lenders under the Cablecom credit facility.

It has also been agreed that if such a sale of all or part of Cablecom is
consummated on or before August 31, 2003, the lenders under the Cablecom
credit facility will be entitled to receive additional interest equal to 20%
of the net proceeds of such a sale after repayment of the amounts outstanding
under the Cablecom credit facility and other expenses and taxes of the sale.
There can be no assurance that any outside investment in, or sale of all or
part of, Cablecom pursuant to the Cablecom credit facility will be on terms
that are favorable to NTL and such investment or sale could have a material
adverse effect on NTLs finances and business.

In particular, in the current environment, NTLs shareholding in Cablecom may
have little or no value, which may result in NTL receiving little or no
consideration for its equity interest in Cablecom. Further, if a third party
makes an investment in Cablecom there can be no assurance that NTL will be
able to maintain its ability to direct the management of Cablecom.

Investments in and Loans to Affiliates

On April 15, 2002, a funding request for $20 million was received by NTL
under the terms of the investment agreement relating to NTLs investment in
B2 in Sweden, a company which is deploying fiber directly to the home
throughout Scandinavia. NTL Triangle does not have any ownership interest in
B2 although the condition of B2 can indirectly impact NTL Triangle to the
extent it impacts NTL Incorporated or NTL (Delaware), Inc., both parent
companies of NTL Triangle. NTL has informed B2 and the other principal
investors that it is not in a position to comply with this request for
funding at this time. The B2 investment agreement provides that if NTL fails
to provide such funding, it may be sued for non-payment and arguably could
lose certain rights under the B2 shareholders arrangements. Pursuant to the
applicable documents, if this occurs the majority remaining shareholders may
also elect to terminate the shareholder arrangements with respect to NTL and
exercise a contractual right to acquire on a pro rata basis NTLs interest in
B2 at 25% of fair market value. If the remaining shareholders elected to
exercise these rights, NTL could be forced to sell its stake in B2 at a loss.
On June 25, 2002, B2 and its remaining shareholders filed a motion in the
Bankruptcy Court requesting relief from the automatic stay provisions of
section 362 of the Bankruptcy Code to exercise their rights under the
relevant agreements. Notwithstanding the arguments raised in the motion, NTL
believes that the Bankruptcy Code provides various defenses and protections
of and for NTLs rights under the B2 investment agreement and in respect of
its equity interest in B2 and intends to enforce vigorously its rights and
protections.

Premium TV Limited, a wholly-owned subsidiary of NTL (Delaware), Inc., is
obliged to provide funding of up to approximately £62.0 million ($94.5
million) to fund various of its joint venture interests. Of this amount, the
payment of approximately £50.0 million ($76.2 million) has been guaranteed by
NTL (Delaware), Inc. If Premium TV Limited fails to provide its committed
funding under the relevant shareholder arrangements relating to these joint
ventures, Premium TV Limited and, in respect of the guaranteed amounts, NTL
(Delaware), Inc., may be sued for non-payment. As a result of the
recapitalization process, the relevant joint venture partners may assert that
they can compulsorily acquire Premium TV Limiteds interest in the relevant
joint venture at a third party appraisal valuation. Premium TV Limited is
currently in discussions with certain of these joint venture partners with a
view to restructuring the relevant joint ventures. In the event that these
discussions do not reach a resolution acceptable to Premium TV Limited,

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

Premium TV Limited may seek to discontinue these joint ventures and terminate
their activities, which may also result in a cessation of substantially all
of Premium TV Limiteds activities. As a result of the restructuring process,
the relevant joint venture partners may assert that they can compulsorily
acquire Premium TV Limiteds interest in the relevant joint venture at a
third party appraisal valuation. NTL believes, however, that it has various
defenses and protections under the Bankruptcy Code against such actions and
intends to enforce vigorously its rights and protections. NTL Triangle does
not have any ownership interest in Premium TV Limited, although the condition
of Premium TV Limited can indirectly impact NTL Triangle to the extent it
impacts NTL Incorporated or NTL (Delaware), Inc., both parent companies of
NTL Triangle.

Relationships with Suppliers

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

Defaults under Indebtedness

Set forth below is a description of defaults, as well as whether such
defaults have led to an event of default or acceleration of indebtedness,
with respect to NTLs bank facilities and NTLs outstanding
notes, each as of May 8, 2002, the date of the Chapter 11 filings of NTL
Incorporated and its debtor subsidiaries. As a consequence of the Chapter 11
filings on May 8, 2002, all amounts outstanding under the indentures
governing the high yield and convertible debt of the entities having
commenced Chapter 11 cases automatically became immediately due and payable.
However, the automatic stay of Section 362 of the United States Bankruptcy
Code serves to prevent the holders of such debt from seeking to enforce their
collection rights under the indentures, except within the context of the
Chapter 11 cases, and even then only with the prior approval of the
Bankruptcy Court.

Credit Facilities

|   |  |                          |  |                                            |  |                                                                                                                                                                |  |                                                                                     
|-- |  | ------------------------ |  | ------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------
|   |  |                          |  | Amount                                     |  |                                                                                                                                                                |  |                                                                                     
|   |  |                          |  | available/amount                           |  |                                                                                                                                                                |  |                                                                                     
|   |  |                          |  | outstanding                                |  |                                                                                                                                                                |  | Event of default/                                                                   
|   |  |                          |  | (as of June                                |  | Defaults                                                                                                                                                       |  | acceleration                                                                        
|   |  | NTLCL                    |  | 30, 2002)                                  |  | (as of May 8, 2002)                                                                                                                                            |  | (as of May 8, 2002)                                                                 
|   |  |                          |  |                                            |  |                                                                                                                                                                |  |                                                                                     
|1. |  | Working Capital
Facility |  | Nil available
$622.4 million outstanding   |  | Default (negotiation with
Bondholders with a view to
rescheduling, failure to pay
Interest on outstanding notes
After 30-day grace period,
Chapter 11 filings) |  | Event of default with
respect to entire
amount; lenders can
accelerate entire amount
|  
|  
|  
|  
|   |  |                          |  |                                            |  |                                                                                                                                                                |  |                                                                                     
|  
|  
|  
|  
|2. |  | Senior Credit
Facility   |  | Nil available
$4,245.4 million outstanding |  | Default (negotiation with
Bondholders with a view to
rescheduling, failure to pay
Interest on outstanding notes
After 30-day grace period,
Chapter 11 filings) |  | Event of default with
respect to entire
amount; lenders can
accelerate
entire amount

33



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|

Outstanding Public Notes

|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|-- |  | ---------------------------------------------------------------- |  | ------------------ |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|   |  |                                                                  |  | Amount outstanding |  |                                                                                                                        |  | Event of default/                             
|   |  |                                                                  |  | (as of June 30,    |  | Defaults                                                                                                               |  | acceleration                                  
|   |  |                                                                  |  | 2002)              |  | (as of May 8, 2002)                                                                                                    |  | (as of May 8, 2002)                           
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|   |  | NTL Incorporated
(NTL (Delaware), Inc.)
co-obligor               |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|1. |  | 5-3/4% Convertible
Subordinated Notes
due June 22, 2011          |  | $100.0 million     |  | Payment default of $2.5 million of
interest due April 15, 2002;
Chapter 11 filings  entire amount
outstanding         |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|   |  | NTL (Delaware), Inc.                                             |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|2. |  | 5-3/4% Convertible
Subordinated Notes
due December 15,
2009      |  | $1,200.0 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|   |  | NTL Communications Corp.                                         |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|3. |  | 12-3/4% Senior Deferred Coupon Notes due 2005                    |  | $277.8 million     |  | Payment default of $17.7 million of
interest due April 15, 2002;
Chapter 11 filings  entire amount
outstanding        |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|4. |  | 11-1/2% Senior
Deferred Coupon
Notes due 2006                    |  | $1,050.0 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|5. |  | 10% Senior Notes
due 2007                                        |  | $400.0 million     |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|6. |  | 9-1/2% Senior
Sterling Notes due
2008, less unamortized
discount |  | $190.2 million     |  | Payment default of $8.6 million of
interest due April 1, 2002; Chapter
11 filings  entire amount
outstanding          |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|7. |  | 10-3/4% Senior
Deferred Coupon
Sterling Notes due 2008           |  | $416.1 million     |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|  
|  
|  
|  
|   |  |                                                                  |  |                    |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|8. |  | 9-3/4% Senior
Deferred Coupon
Notes due 2008                     |  | $1,193.3 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire
Amount outstanding |  | Event of default/acceleration
of entire amount

34



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|--- |  | ------------------------------------------------------------- |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|9.  |  | 9-3/4% Senior
Deferred Coupon
Sterling Notes due
2009         |  | $418.4 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|10. |  | 11-1/2% Senior
Notes due 2008                                 |  | $625.0 million   |  | Payment default of $35.9 million of
interest due April 1, 2002; Chapter
11 filings  entire amount
outstanding         |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|11. |  | 12-3/8% Senior
Deferred Coupon
Notes due 2008                 |  | $380.6 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|12. |  | 7% Convertible
Subordinated Notes
due 2008                    |  | $489.8 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|13. |  | 9-1/4% Senior Euro
Notes due 2006                             |  | $246.4 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|14. |  | 9-7/8% Senior Euro
Notes due 2009                             |  | $345.0 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|15. |  | 11-1/2% Senior
Deferred Coupon
Euro Notes due 2009            |  | $156.1 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|16. |  | 11-7/8% Senior
Notes due 2010,
less unamortized
discount      |  | $491.2 million   |  | Payment default of $29.7 million of
interest due April 1, 2002; Chapter
11 filings  entire amount
outstanding         |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|17. |  | 12-3/8% Senior Euro
Notes due 2008,
plus unamortized
discount |  | $296.5 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|18. |  | 6-3/4% Convertible
Senior Notes due
2008                      |  | $1,150.0 million |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|    |  | NTL Triangle                                                  |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|19. |  | 11.2% Senior
Discount Debentures
due November 15,
2007        |  | $517.3 million   |  | None                                                                                                                   |  | None                                          
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|    |  | Diamond                                                       |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|20. |  | 13-1/4% Senior
Discount Notes due
2004                        |  | $285.1 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|21. |  | 11-3/4% Senior
Discount Notes due
2005                        |  | $531.0 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                               |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|22. |  | 10-3/4% Senior
Discount Notes due
2007                        |  | $420.5 million   |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount

35



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

|    |  |                                                                    |  |                |  |                                                                                                                        |  |                                               
|--- |  | ------------------------------------------------------------------ |  | -------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|23. |  | 10% Senior Sterling
Notes due 2008,
issued by Diamond
Holdings plc |  | $205.8 million |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace amount outstanding                 |  | Event of default/acceleration
of entire amount
|   
|   
|   
|   
|    |  |                                                                    |  |                |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|24. |  | 9-1/8% Senior Notes
due 2008, issued by
Diamond Holdings
plc       |  | $110.0 million |  | Chapter 11 filings, failure to pay
interest on outstanding notes after
30 day grace period  entire amount
outstanding |  | Event of default/acceleration
of entire amount

Description of Outstanding Notes

In November 1995, NTL Triangle issued $517.3 million principal amount at
maturity of 11.2% Senior Discount Debentures due 2007 (the 2007 Discount
Debentures). Interest accreted on the 2007 Discount Debentures at 11.2% per
annum compounded semiannually from November 15, 1995 to November 15, 2000,
after which date interest became payable in cash on each May 15 and November 15
through November 15, 2007. The 2007 Discount Debentures contain restrictive
covenants which limit NTL Triangles ability to pay dividends.

In October 2000, NTL Triangles wholly-owned subsidiary NTL Communications
(Ireland) Limited (Cablelink) entered into a loan agreement with a subsidiary
of NTL under which £74.6 million and £68.0 million had been borrowed at June
30, 2002 and December 31, 2001, respectively. The outstanding borrowings are
due in October 2007. Interest is payable quarterly in arrears from March 31,
2001. The annual interest rate is set on January 1 of each year at the 12-month
EURIBOR rate plus 1%. The effective interest rate at June 30, 2002 and
December 31, 2001 was 4.32% and 5.69%, respectively. Accrued interest of
£1,594,000 and £916,000 was included in due to affiliates in the consolidated
balance sheet at June 30, 2002 and December 31, 2001, respectively.

Contractual Obligations and Commercial Commitments

NTL Triangle has no significant commercial commitments as of June 30, 2002.

The following table includes aggregate information about NTL Triangles
contractual obligations as of June 30, 2002 and the periods in which payments
are due. Due to uncertainties about the compliance with the terms and
conditions of NTL Triangles debt that would give the holders of the debt the
right to accelerate repayment, all of NTL Triangles long-term debt has been
classified as current.

|                                   |  |                        |        |        |   |           |      |       |   |       |      |         |   |  |      |  |   |  |        | 
|---------------------------------- |  | ---------------------- | ------ | ------ | - | --------- | ---- | ----- | - | ----- | ---- | ------- | - |  | ---- |  | - |  | ------ | 
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  |                        |        |        |   | Less than |      | 1-3   |   | 4-5   |      | After 5
|Contractual Obligations            |  | Total                  |        | 1 Year |   | Years     |      | Years |   | Years
|                                   |  |                        |        |        |   |           |      |       |   |      
|                                   |  | (In millions)         
|Long-Term Debt                     |  |                        | £414.0 |        |   |           | £   |       |   |       | £   |         |   |  | £   |  |   |  | £414.0 | 
|                                  
|                                  
|                                  
|                                  
|Capital Lease Obligations          |  |                        | 3.1    |        |   |           | 0.4  |       |   |       | 1.4  |         |   |  | 0.9  |  |   |  | 0.4    | 
|                                  
|                                  
|                                  
|                                  
|Operating Leases                   |  |                        | 44.4   |        |   |           | 3.0  |       |   |       | 4.9  |         |   |  | 3.9  |  |   |  | 32.6   | 
|                                  
|                                  
|                                  
|                                  
|Unconditional Purchase Obligations |  |                        | 2.3    |        |   |           | 2.3  |       |   |       |     |         |   |  |     |  |   |  |       | 
|                                  
|                                  
|                                  
|                                  
|Other Long-Term Obligations        |  | None                   |        |        |  |           |      |       |  |       |      |         |  |  |      |  |  | 
|                                  
|                                  
|                                  
|                                  
|Total Contractual Cash Obligations |  |                        | £463.8 |        |   |           | £5.7 |       |   |       | £6.3 |         |   |  | £4.8 |  |   |  | £447.0 | 

Condensed Consolidated Statements of Cash
Flows

Net cash provided by operating activities amounted to £9.8 million and £1.5
million for the six months ended June 30, 2002 and 2001, respectively. The
increase in net cash provided by operating activities is primarily due to a
£8.1 million increase in due to affiliates and changes in working capital as a
result of the timing of receipts and disbursements.

36



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##### Table of Contents



NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

Net cash used in investing activities amounted to £21.4 million and £36.2
million for the six months ended June 30, 2002 and 2001, respectively,
for continuing fixed asset purchases and construction. The Company
expects to further reduce purchases of fixed assets in 2002 in an effort to
conserve cash.

Net cash provided by financing activities amounted to £2.1 million and £44.7
million for the six months ended June 30, 2002 and 2001, respectively. Net
cash used in financing activities of £638,000 and £337,000 in the six months
ended June 30, 2002 and 2001, respectively, was for principal payments. During
the six months ended June 30, 2002 and 2001, net cash provided by financing
activities includes £2.7 million and £24.6 million, respectively, in cash
received by Cablelink under a loan agreement with a subsidiary of
NTL. Net cash provided by financing activities in the six months
ended June 30, 2001 also includes £20.4 million
capital contributions from NTL Group Limited.

Results of Operations

Consolidated financial information for the Company for the six and three months
ended June 30, 2002 and 2001 is as follows (in £000s, NM denotes percentage
is not meaningful):

|                                                        |  |                  |          |                     |  |   |          |   |  |  |         |   |  |    |        |  
|------------------------------------------------------- |  | ---------------- | -------- | ------------------- |  | - | -------- | - |  |  | ------- | - |  | -- | ------ | -
|                                                        |  | Six Months Ended |          |                     |  |   |          |   |  | 
|                                                        |  | June 30,         |          | Increase/(Decrease)
|                                                        |  |                  |          |                    
|                                                        |  | 2002             |          | 2001                |  | £ |          | %
|                                                        |  |                  |          |                     |  |   |          |  
|Revenues                                                |  |                  | £95,685  |                     |  |   | £87,702  |   |  |  | 7,983   |   |  |    | 9.1    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Operating, selling, general and administrative expenses |  |                  | 76,719   |                     |  |   | 81,640   |   |  |  | (4,921  | ) |  |    | (6.0   | )
|                                                       
|                                                       
|                                                       
|                                                       
|Other charges                                           |  |                  | 1,126    |                     |  |   |         |   |  |  | 1,126   |   |  | NM
|                                                       
|                                                       
|                                                       
|                                                       
|Depreciation and amortization                           |  |                  | 31,625   |                     |  |   | 51,590   |   |  |  | (19,965 | ) |  |    | (38.7  | )
|                                                        |  |                  |          |                     |  |   |          |   |  |  |         |   |  |    |        |  
|Operating loss                                          |  |                  | (13,785  | )                   |  |   | (45,528  | ) |  |  | (31,743 | ) |  |    | (69.7  | )
|                                                        |  |                  |          |                     |  |   |          |   |  |  |         |   |  |    |        |  
|Interest expense                                        |  |                  | 20,166   |                     |  |   | 20,090   |   |  |  | 76      |   |  |    | 0.4    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest expense to affiliate                           |  |                  | 1,533    |                     |  |   | 1,221    |   |  |  | 312     |   |  |    | 25.6   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Investment income                                       |  |                  | (707     | )                   |  |   | (148     | ) |  |  | 559     |   |  |    | 377.7  |  
|                                                       
|                                                       
|                                                       
|                                                       
|Exchange (gains) losses                                 |  |                  | (17,661  | )                   |  |   | 22,156   |   |  |  | (39,817 | ) |  |    | (179.7 | )
|                                                        |  |                  |          |                     |  |   |          |   |  |  |         |   |  |    |        |  
|Loss before income taxes                                |  |                  | (17,116  | )                   |  |   | (88,847  | ) |  |  | (71,731 | ) |  |    | (80.7  | )
|                                                       
|                                                       
|                                                       
|                                                       
|Income tax benefit (expense)                            |  |                  | 163      |                     |  |   | (34      | ) |  |  | 197     |   |  |    | 579.4  |  
|                                                        |  |                  |          |                     |  |   |          |   |  |  |         |   |  |    |        |  
|Net loss                                                |  |                  | £(16,953 | )                   |  |   | £(88,881 | ) |  |  | (71,928 | ) |  |    | (80.9  | )
|                                                        |  |                  |          |                     |  |   |          |   |  |  |         |   |  |    |        |  

|                                                        |  |                    |         |                     |  |   |          |   |  |  |         |   |  |    |         |  
|------------------------------------------------------- |  | ------------------ | ------- | ------------------- |  | - | -------- | - |  |  | ------- | - |  | -- | ------- | -
|                                                        |  | Three Months Ended |         |                     |  |   |          |   |  | 
|                                                        |  | June 30,           |         | Increase/(Decrease)
|                                                        |  |                    |         |                    
|                                                        |  | 2002               |         | 2001                |  | £ |          | %
|                                                        |  |                    |         |                     |  |   |          |  
|Revenues                                                |  |                    | £48,565 |                     |  |   | £45,659  |   |  |  | 2,906   |   |  |    | 6.4     |  
|                                                       
|                                                       
|                                                       
|                                                       
|Operating, selling, general and administrative expenses |  |                    | 37,781  |                     |  |   | 39,176   |   |  |  | (1,395  | ) |  |    | 3.6     |  
|                                                       
|                                                       
|                                                       
|                                                       
|Other charges                                           |  |                    | 13      |                     |  |   |         |   |  |  | 13      |   |  | NM
|                                                       
|                                                       
|                                                       
|                                                       
|Depreciation and amortization                           |  |                    | 16,370  |                     |  |   | 26,667   |   |  |  | (10,297 | ) |  |    | (38.6   | )
|                                                        |  |                    |         |                     |  |   |          |   |  |  |         |   |  |    |         |  
|Operating loss                                          |  |                    | (5,599  | )                   |  |   | (20,184  | ) |  |  | (14,585 | ) |  |    | (72.3   | )
|                                                        |  |                    |         |                     |  |   |          |   |  |  |         |   |  |    |         |  
|Interest expense                                        |  |                    | 9,956   |                     |  |   | 10,291   |   |  |  | (335    | ) |  |    | (3.3    | )
|                                                       
|                                                       
|                                                       
|                                                       
|Interest expense to affiliate                           |  |                    | 783     |                     |  |   | 683      |   |  |  | 100     |   |  |    | 14.6    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Investment income                                       |  |                    | (323    | )                   |  |   | (29      | ) |  |  | 294     |   |  |    | 1,013.8 |  
|                                                       
|                                                       
|                                                       
|                                                       
|Exchange (gains) losses                                 |  |                    | (25,079 | )                   |  |   | 2,999    |   |  |  | (28,078 | ) |  |    | (936.2  | )
|                                                        |  |                    |         |                     |  |   |          |   |  |  |         |   |  |    |         |  
|Income (loss) before income taxes                       |  |                    | 9,064   |                     |  |   | (34,128  | ) |  |  | (43,192 | ) |  |    | (126.6  | )
|                                                       
|                                                       
|                                                       
|                                                       
|Income tax expense                                      |  |                    | (44     | )                   |  |   | (34      | ) |  |  | 10      |   |  |    | 29.4    |  
|                                                        |  |                    |         |                     |  |   |          |   |  |  |         |   |  |    |         |  
|Net income (loss)                                       |  |                    | £9,020  |                     |  |   | £(34,162 | ) |  |  | (43,182 | ) |  |    | (126.4  | )
|                                                        |  |                    |         |                     |  |   |          |   |  |  |         |   |  |    |         |  

As expected, our growth in 2002 has been curtailed by funding constraints.
Although our current business plan includes a reduction in the number of new
customers and an increase in revenue from existing customers, our cash
constraints

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

present many challenges to the successful execution of the plan.
We are conserving cash through a reduction in capital expenditures including
expenditures to connect new customers to our network. In order to maintain
revenues and cash from operations while reducing the number of new customers,
we must reduce and limit customer churn. We intend to continue to improve our
customer service and increase our service offering to customers in an effort to
curtail and reduce churn. We are in the process of integrating our various
billing systems and customer databases in an effort to improve one of the main
tools we use to provide customer service.

Our plan to reduce churn and to increase 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. We may also benefit from the
financial difficulties exhibited by some of the newer companies that compete
with us through churn of their customers. However, there is significant
competition in our markets, through digital satellite and digital terrestrial
television and through alternative Internet access media, such as DSL offered
by BT. If 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 ARPU and results of
operations will be adversely affected.

Media speculation regarding our financial condition and potential outcomes of
the recapitalization process could have an adverse effect on parts of our
business. Similarly, negative press about the financial condition of
alternative telecom carriers in general may effect our reputation. One of the
key strategies in our business plan is to increase our penetration of higher
value small to medium size enterprises (or SMEs) and provide increased retail
services of bundled voice, data and Internet services for SMEs. However, due
to the negative publicity surrounding our financial condition and the effect of
that publicity on our brand name, we may find it difficult to convince SMEs to
become our customers. We believe our recapitalization process and the general
climate for alternative telecom carriers effected our revenues in the first
half of 2002 as prospective customers began deferring orders beginning in the
fourth quarter of 2001. Even if we successfully complete the recapitalization
process, there is no assurance that the negative publicity will not adversely
impact our results of operations or have a long-term negative effect on our
brand.

In addition, this uncertainty may adversely affect our relationships with
suppliers. If suppliers become increasingly concerned about our financial
condition, they may demand faster payments or not extend normal trade credit,
both of which could further adversely affect our cash conservation measures and
our results of operations. However, this did not have any significant
effect on our results of operations or cash flows in the first half
of 2002.

There can be no assurance that we will successfully complete the proposed
recapitalization plan in a timely manner in order to sustain our operations.

Revenue was £95.7 million, £48.6 million, £87.7 million and £45.7 million for
the six and three months ended June 30, 2002 and 2001, respectively,
representing increases of 9.1% and 6.4% as compared to the same periods in
2001. The increases in revenue were due to price increases and upselling new
services to customers. The increases were partially offset by a reduction in
the customer base due to disconnects, lower telephony usage and fewer
premium package television customers.

Operating costs (including network expenses) were
£44.7 million, £22.0 million, £42.1
million and £22.5 million for the six and three months ended June 30, 2002
and 2001, respectively, representing an increase of 6.3% and a decrease of
2.2% as compared to the same periods in 2001. Operating costs include certain costs which 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 the Companys telephony traffic, as
well as the provision of technical infrastructure and network capacity by NTL
for the Companys subscription free Internet service. These charges were
£14.5 million, £7.7 million, £9.9 million and £4.9 million in the six and
three months ended June 30, 2002 and 2001, respectively. The increase in these
changes is primarily due to the ongoing operating integration of the Company
with the rest of NTL, as well as the introduction of the Internet service.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

Selling, general and administrative expenses were £32.0 million, £15.8
million, £39.5 million and £16.7 million for the six and three months ended
June 30, 2002 and 2001, respectively, representing decreases of 19.1% and
5.4% as compared to the same periods in 2001. The reduction in selling,
general and administrative expenses is primarily a result of the continued
progress NTL has made in improving efficiencies and reducing costs. Selling,
general and administrative expenses include certain costs which 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 the Companys use of the related IT equipment. These
charges were £20.7 million, £10.4 million, £20.0 million and £9.0 million in
the six and three months ended June 30, 2002 and 2001, respectively.

Other charges in 2002 are for restructuring costs consisting of employee
severance and related costs of £1.1 million incurred by Cablelink for 55
employees .

Depreciation expense was £26.1 million,
£14.0 million, £30.1 million and £15.9 million for the six and three months ended June 30, 2002 and
2001, respectively, representing decreases of £3.9 million
and £1.9 million
as compared to the same periods in 2001. The decreases in 2002 as
compared to 2001 are primarily due to an increase in fully
depreciated telecommunications and cable television equipment.

Amortization expense was £5.5 million,
£2.4 million, £21.5 million and
£10.8 million for the six and three months ended
June 30, 2002 and 2001, respectively, representing decreases of
£16.0 million and £8.4 million as compared to the
same periods in 2001. The Company adopted SFAS No. 142 on
January 1, 2002, which ended the amortization of goodwill and other indefinite
lived intangible assets. Amortization expense in the six and
three months ended June 30, 2001, after deducting the amortization of goodwill
and other indefinite lived intangible assets of £15.3 million and £7.6 million,
would have been £6.3 million and £3.1 million.

Interest expense was £20.2 million, £10.0 million, £20.1 million and £10.3
million for the six and three months ended June 30, 2002 and 2001,
respectively, representing an increase of £76,000 and a decrease of £335,000.

Interest expense to affiliate was £1.5 million, £783,000, £1.2 million and
£683,000 for the six and three months ended June 30, 2002 and 2001,
respectively, due to increased borrowings since June 30, 2001.

Investment income was £707,000, £323,000, £148,000 and £29,000 for the six and
three months ended June 30, 2002 and 2001, respectively, representing
increases of £559,000 and £294,000 as compared to the same periods in 2001.
The increases are primarily attributable to increases in the average cash
balances available for investment in 2002 as compared to the same periods in
2001.

Exchange gains were £17.7 million and £25.1 million for the six and three
months ended June 30, 2002 and exchange losses were £22.2 million and £3.0
million for the six and three months ended June 30, 2001. The change is
primarily attributable to fluctuations in the valuation of the UK Pound
Sterling on the 2007 Discount Debentures, which are denominated in US dollars.
The Companys results of operations will continue to be affected by exchange
rate fluctuations.

Net (loss) income in the six and three months ended
June 30, 2002 and 2001 was £(17.0) million,
£9.0 million, £(88.9) million and
£(34.2) million, respectively. The decrease in the net loss
in the six month period of £71.9 million and the decrease
in the net loss in the three month period of £43.2 million
was primarily due to the changes in unrealized foreign exchange gains
(losses) and the decrease in amortization expense as a result of the
adoption of SFAS No. 142 on January 1, 2002.

A subsidiary of NTL in the UK has incurred
recapitalization expenses of approximately £23 million
through June 30, 2002, including approximately
£13 million for employee retention related to substantially
all of NTLs UK employees and approximately
£10 million for financial advisor, legal, accounting and
consulting costs. NTL expects to incur approximately
$50.0 million in additional recapitalization costs until the
completion of the process. NTL Triangle expects to be charged in the
third quarter of 2002 for its share of these expenses as well as
expenses incurred after June 30, 2002.

Recent Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets, effective for the Company on
January 1, 2002. This Statement superceded SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
and other related accounting guidance. The adoption of this new standard had no
effect on the results of operations, financial condition or cash
flows of the Company.

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

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination that is completed after June 30, 2001.

SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets. Instead, these
assets must be reviewed annually (or more frequently under certain conditions)
for impairment in accordance with this statement. This impairment test uses a
fair value approach rather than the undiscounted cash flow approach previously
required by SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. The Company adopted SFAS No. 142 on January 1, 2002. Primarily due to the
significant impairment charge that the Company recorded in 2001, the adoption
of this new standard did not have a significant effect on the results of
operations, financial condition or cash flows of the Company.

Upon the adoption of SFAS No. 142, the Company performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separate from goodwill. The
Company determined that license acquisition costs and customer lists should
continue to be classified separate from goodwill. The Company determined that
license acquisition costs would no longer be subject to amortization since they
are deemed to have an indefinite useful life. The Company also determined that
no changes in the remaining useful lives of the customer lists were required.

The Company also performed an evaluation for impairment of its goodwill and
license acquisition costs as of January 1, 2002 and determined that no
impairment charge was required. The Companys next evaluation of impairment
will be the annual test as of October 1, 2002, unless there are new indicators
of impairment.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2001 is as follows:
£13.0 million in 2002, £13.0
million in 2003, £7.0 million in 2004,
£6.0 million in 2005 and £2.0 million in 2006.

The following table shows the Companys net loss as adjusted for the adoption
of SFAS No. 142, had SFAS No. 142 been in effect on January 1, 2001 (unaudited)
(in £000's).

|                       |                           |  |                           |   |      |  |          |        | 
|---------------------- | ------------------------- |  | ------------------------- | - | ---- |  | -------- | ------ | 
|                       |                           |  | Six
Months Ended June 30,
|                       |                           |  |                          
|                       |                           |  | 2002                      |   | 2001
|                       |                           |  |                           |   |     
|Net loss  as reported |                           |  | £(16,953                  | ) |      |  | £(88,881 | )     
|                      
|                      
|                      
|                      
|Amortization of:       |                           |  |                          |   |      |  |          |       
|                      
|                      
|                      
|                      
|                       | Goodwill                  |  |                           |  |      |  |          | 11,668 | 
|                      
|                      
|                      
|                      
|                       | License acquisition costs |  |                           |  |      |  |          | 3,607  | 
|                       |                           |  |                           |   |      |  |          |       
|                       |                           |  |                          |   |      |  | 15,275   |       
|                       |                           |  |                           |   |      |  |          |       
|Net loss  as adjusted |                           |  | £(16,953                  | ) |      |  | £(73,606 | )     
|                       |                           |  |                           |   |      |  |          |       

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

Certain statements contained herein constitute forward-looking statements as
that term is defined under the provisions of 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 such forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from those contemplated, projected, forecasted, estimated or budgeted, whether
expressed or implied, by such forward-looking statements. Such factors include,
among others, those set forth under the caption Risk Factors in this Form
10-Q as well as: the ability of the Company to continue as a going concern; the
ability of the Company to obtain trade credit and shipments and terms with
vendors and service providers for current orders; the Companys ability to
maintain contracts that are critical to its operations; potential adverse
developments with respect to the Companys

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

liquidity or results of operations;
the ability to fund and execute its business plan; the ability to attract,
retain and compensate key executives and associates; the ability of the Company
to attract and retain customers; general economic and business conditions,
technological developments, the Companys ability to continue to design
networks, install facilities, obtain and maintain any required governmental
licenses or approvals and finance construction and development, all in a timely
manner at reasonable costs and on satisfactory terms and conditions, as well as
assumptions about customer acceptance, churn rates, overall market penetration
and competition from providers of alternative services, the impact of
restructuring
and integration actions, the impact of new business opportunities requiring
significant up-front investment and interest rate and currency exchange rate
fluctuations.. The Company assumes no obligation to update the forward-looking
statements contained herein to reflect actual results, changes in assumptions
or changes in factors affecting such statements.




Risk Factors

We have historically relied on NTL Incorporated and its subsidiaries to meet
our cash flow needs. Unless NTLs proposed recapitalization plan is
implemented, it is likely that NTL will not be able to provide us with cash in
the future, at least in the short-term.

NTL Triangle is an intermediate holding company
with no independent operations or significant assets other than investments in
and advances to its subsidiaries. We do not generate sufficient
cash flow from our operations to fund our operational expenses and interest
payments. We have historically met our cash requirements through debt or equity
from NTL Incorporated and or other NTL Incorporated subsidiaries. Given NTLs
liquidity constraints, unless its proposed recapitalization plan is implemented
it is likely that NTL will not be able to
provide us with cash at least for the short-term.

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

We have limited liquidity. NTL does not currently have access to its historic sources of liquidity in the
capital markets and NTLs credit facilities are either fully drawn or NTL is
currently unable to access remaining undrawn amounts. As a consequence, NTL
needs to restructure its outstanding debt and/or raise new funds. On May 8,
2002 NTL Incorporated and five of its subsidiaries filed a pre-arranged joint
reorganization plan under Chapter 11 of the United States Bankruptcy Code. On
May 24, 2002, NTL filed an amended plan, which sets forth the joint
reorganization plan, subject to court approval, to which NTL, an unofficial
committee of its public bondholders and France Telecom, a significant holder of
NTL Incorporateds preferred stock, have agreed in principle. On July 15, 2002,
NTL Incorporated and its debtor subsidiaries filed an amended disclosure
statement and a second amended joint reorganization plan which has been
distributed to stakeholders of NTL. A steering committee of the lending
banks under NTL's credit facilities has given its agreement in principle (on a
non-legally binding basis) to the terms of the proposed plan of reorganization.
However, the proposed plan of reorganization remains subject to a favorable
vote of NTL's impaired creditors and bankruptcy court approval. NTL may also face
the possibility of insolvency proceedings in the UK or elsewhere.

The successful implementation of the proposed recapitalization plan is not
assured as it will require the support of NTLs creditors and preferred
stockholders as well as other conditions including Court approval.

The completion of the proposed recapitalization contemplated by the agreement
in principle with the unofficial bondholder committee will require support from
NTLs creditors and holders of NTL Incorporateds preferred stock, including
France Telecom. The proposed recapitalization plan will be implemented pursuant
to the Chapter 11 reorganization plan, once confirmed and consummated.
Consummation of the proposed recapitalization plan will require

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

a favorable
vote by impaired classes of creditors, satisfaction of bankruptcy law
requirements and confirmation by the Bankruptcy Court, which, as a court of
equity, may exercise substantial discretion and choose not to confirm the
proposed recapitalization plan. Even if such a plan receives the necessary
support from many classes of NTLs creditors, there can be no assurance that it
will be completed. If a protracted reorganization were to occur, or a
liquidation would be necessary, there is a risk that the value of NTL would be
eroded to the detriment of some or all NTL stakeholders.

NTL is in default under its credit facilities.

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

The UK credit facilities waivers terminated on April 29, 2002, as a result of
which, there was an event of default under each of NTLs credit facilities with
respect to the missed interest payments on April 1, 2002. In addition, the
voluntary filings under Chapter 11 of the United States Bankruptcy Code
constituted an event of default under the UK credit facilities and the Cablecom
credit facility. These events of default entitle the lenders under NTLs credit
facilities to accelerate repayment. NTL does not have sufficient cash
resources to repay its outstanding indebtedness if it is declared immediately
due and payable. In addition, the lenders could also seek to take control over
the assets over which they hold security. Although a steering committee of the
lenders has agreed in principle (on a non-legally binding basis) to the
proposed recapitalization, there can be no assurance that they will not take
such actions.

NTL did not pay interest due on some of its outstanding notes and does not plan
to make future interest payments on most of the currently outstanding notes.

NTL Incorporated, NTL (Delaware), Inc. and NTL Communications Corp. did not
make scheduled interest payments and payments of related fees since prior to
April 1, 2002. Upon emerging from Chapter 11 proceedings, NTL intends to make
any required interest payments on the notes of Diamond Holdings. In accordance
with the proposed recapitalization plan, NTL does not plan to make future
interest payments on its currently outstanding publicly traded notes except
notes issued by NTL Triangle and, upon emergence from Chapter 11 proceedings,
Diamond Holdings Limited.

As a result of these payment defaults and as a result of NTLs Chapter 11
bankruptcy filings, there is currently an event of default in respect of all of
NTLs publicly traded notes other than the notes issued by NTL Triangle. As a
result of the Chapter 11 filings, this debt is immediately due and payable.

NTL has no current availability to borrow under its existing credit facilities.

NTL has no current ability to borrow under its existing UK credit facilities,
as it has borrowed the full amounts available. With respect to the Cablecom
credit facility, the term tranche is fully drawn and the revolving tranche has
been capped at its utilized amount of CHF 1,055.0 million although the
availability may be increased with the consent of the requisite percentage of
lenders under the facility. If that facility is not refinanced or Cablecom
cannot be sold, the Cablecom credit facility is due to be repaid on April 30,
2003. Without substantial investment from a third party or further borrowing,
Cablecom would be unable to repay the facility which would have a material
adverse effect on its business.

It is likely NTL will lose its net operating loss carryforwards for U.S. income
tax purposes in connection with the proposed recapitalization plan.

A restructuring of NTLs debt can be expected to give to rise to cancellation
of indebtedness (COD), which if it occurs in the course of a proceeding
pursuant to Chapter 11 of the United States Bankruptcy Code, would be
non-taxable. If the COD is non-taxable, NTL will be required to reduce net
operating loss carryforwards and other attributes such as

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

capital loss
carryforwards and tax basis in assets by an amount equal to the non-recognized
COD. As a result, it is likely that as a result of the successful completion of
the proposed plan of recapitalization, NTL will have no U.S. net operating loss
carryforwards.

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

Adverse publicity or news coverage regarding NTLs financial condition, the
Chapter 11 bankruptcy filings and potential outcomes of the recapitalization
process could have an adverse effect on parts of NTLs business. Similarly,
negative press about the financial condition of other cable and pay television
operations and alternative telecom carriers in general may effect our
reputation. For example, one of our key strategies is to increase our
penetration of higher value small to medium size enterprises, or SMEs, and
provide increased retail services of bundled voice, data and Internet services
for SMEs. However, due to the negative publicity surrounding our financial
condition and the potential effect of that publicity on our brand name, we may
find it difficult to convince SMEs to take up our services. Even if we
successfully complete the recapitalization process, there is no assurance that
it will not adversely impact our results of operations or have a long-term
effect on our brand.

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

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

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

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

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

Our growth has been curtailed by funding constraints.

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

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

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

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

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

Our ability to reduce churn could also be adversely affected by the successful
launch of digital terrestrial television by BskyB and the BBC, who have
recently successfully applied for licenses to furnish such a service.

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

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

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

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

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

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

NTL Incorporated holds, directly and indirectly, minority investments in
broadband cable operations in Germany, France and Sweden. Each of those
companies may require substantial amounts of additional capital to complete
their network rollouts and upgrades and their ability to obtain that financing
will depend, in part, on their ability to access the capital
44Table of ContentsNTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002markets. The
ability of those companies to access the capital markets will be subject not
only to the performance of their business and prospects, but to conditions in
the capital markets generally. If those companies
cannot complete their planned expansions and upgrades for any reason, the value
of NTLs investments could be reduced. If those companies issue equity
securities, it is likely that NTL will not be able to participate which could
lead to substantial dilution of the value of these investments to NTL.
Although NTL Triangle does not own any interest in these investments, any
impact on NTL (Delaware), Inc. or NTL Incorporated, our parent companies, could
affect NTL Triangle.On April 15, 2002, a funding request for $20 million was received by NTL under
the terms of the investment agreement relating to NTLs investment in B2. NTL
has informed B2 and the other principal investors that it is not in a position
to comply with this request at this time. The B2 investment agreement provides
that if NTL fails to provide such funding, it may be sued for non-payment and
arguably could lose certain rights under the B2 shareholders arrangements.
Pursuant to the applicable documents, if this occurs the majority remaining
shareholders may also elect to terminate the shareholder arrangements with
respect to NTL and exercise a contractual right to acquire on a pro rata basis
NTLs interest in B2 at 25% of fair market value. If the remaining shareholders
elected to exercise these rights, NTL could be forced to sell its stake in B2
at a loss. NTL believes, however, that it has certain defenses and protections
of and for NTLs rights under the B2 investment agreement and in respect of its
equity interest in B2 and intends to vigorously enforce such rights and
protections.Another company in which NTL Incorporated indirectly holds an investment, iesy
Holdings GmbH, formerly known as eKabel Holdings GmbH, the cable network in the
Hessen province of Germany (which includes Frankfurt), has recently retained
advisors to assist it in a restructuring of its outstanding indebtedness. There
can be no assurance that iesy will successfully achieve a restructuring. If a
restructuring is not successfully achieved, it will likely have a negative
impact on the value of NTLs investment in iesy.We are dependent upon a small number of key personnel.A small number of key executive officers manage NTLs businesses. The loss of
one or more of these executive officers could have a material adverse effect on
us. We believe that our future success will depend in large part on our
continued ability to attract and retain highly skilled and qualified personnel.
We have not entered into written employment contracts or non-compete agreements
with, nor have we obtained life insurance policies covering many key executive
officers.Our principal businesses are subject to government regulation, including
pricing regulation, and changes in current regulations may adversely affect us.NTLs principal business activities in the UK, the Republic of Ireland and
Switzerland and the activities of the companies in which NTL has investments in
Germany, France and Sweden are regulated and supervised by various governmental
bodies. Changes in laws, regulations or governmental policy or the
interpretations of those laws or regulations affecting our activities and those
of our competitors, such as licensing requirements, changes in price regulation
and deregulation of interconnection arrangements, could have a material adverse
effect on us.NTL is also subject to regulatory initiatives of the European Commission.
Changes in EU Directives may reduce our range of programming and increase the
costs of purchasing television programming or require us to provide access to
our cable network infrastructure to other service providers, which could have a
material adverse effect on us.The telecommunications industry is subject to rapid technological changes and
we cannot predict the effect of any changes on our businesses.The telecommunications industry is subject to rapid and significant changes in
technology and the effect of technological changes on our businesses cannot be
predicted. Our core offerings may become outdated due to technological
breakthroughs rendering our products out of date. In addition, NTLs business
plan contemplates the introduction of services using new technologies. Cablecom
and the operations in which NTL has an interest in
France, Germany and45Table of Contents

NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002

Sweden intend to introduce voice over Internet protocol, or
VoIP, voice telephony services across their networks. Customer demand for this
service is uncertain as customers may not readily switch from their current
telephony service, especially if the quality of the service is not or is
perceived not to be comparable to other telephony services. Similarly, NTLs
investments in other new services such as those related to the 3G mobile
network may prove premature and we may not realize anticipated returns on these
new products. The cost of implementation for emerging and future technologies
could be significant, and NTLs ability to fund such implementation may depend
on NTLs ability to obtain additional financing. We cannot be certain that NTL
would be successful in obtaining any additional financing required.

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

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

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

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

Defense of putative class action suits filed against NTL Incorporated and
certain of its officers could have a negative impact on NTLs businesses.

The putative class action lawsuits filed against NTL Incorporated and certain
of its officers which were commenced by seven of its purported shareholders, on
behalf of certain purchasers of NTL Incorporateds securities may have a
negative impact on its results of operations and business. Three of these
lawsuits have been voluntarily dismissed with respect to NTL Incorporated
because they were filed subsequent to the commencement of NTLs Chapter 11
cases. The claims arising out of the remaining suits against NTL Incorporated
will be discharged under the Bankruptcy Code if the proposed recapitalization
plan is confirmed by the Bankruptcy Court. The claims arising out of the suits
against the individual officers remain and will not be discharged under the
Bankruptcy Code if the recapitalization plan is confirmed, but may be released
pursuant to the terms of the plan itself. If, for any reason, the claims
against these officers are not released under the plan, defense of such suits
may divert the officers time and resources from managing the operations of
NTLs business. If these officers spend significant amounts of time defending
these lawsuits, there may be a negative impact on results of operations and
business.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits:
|--- |  | ---------



| | 99.1 |  | 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:                                                                                
|--- |  | ----------------------------------------------------------------------------------------------------
|   
|    |  | During the quarter ended June 30, 2002, the Company filed the
following Current Reports on Form 8-K:



| | (i)  |  | Report dated May 8, 2002, reporting under Item 3,
Bankruptcy or Receivership, that NTL Incorporated announced
that it, and certain of its subsidiaries, filed a voluntary
petition for its previously announced prearranged joint plan
of reorganization.
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | Report dated May 24, 2002, reporting under Item
5, Other Events, that NTL Incorporated and certain of its
subsidiaries filed a disclosure statement and an amended joint
reorganization plan with the United States Bankruptcy Court.                    



| |  | No financial statements were filed with these reports.
| |  | ------------------------------------------------------

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2002




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.

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|                      |  | NTL (TRIANGLE) LLC                   
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|                      |  | (Registrant)                         
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|                      |  | By: NTL Group Limited                
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|                      |  | Its Sole Managing Member             
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|Date: August 19, 2002 |  | By: /s/ Barclay Knapp                
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|                      |  | Barclay Knapp                        
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|                      |  | (Director of NTL Group Ltd., the sole
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|                      |  | managing member)                     
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|Date: August 19, 2002 |  | By: /s/ John F. Gregg                
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|                      |  | John F. Gregg                        
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|                      |  | (Director of NTL Group Ltd., the sole
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|                      |  | managing member)                     

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