SECURITIES AND EXCHANGE COMMISSION
                     Washington, DC 20549
                               
                    FORM 10-K AMENDMENT #1


Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of  1934

For the fiscal year ended September 30, 1996      
Commission file number 0-25492


                IPC INFORMATION SYSTEMS, INC.   
   (Exact Name of Registrant as Specified in Its Charter)
                              
                              
                              
                              
                              
                              
                                                     
             DELAWARE                           58-1636502
 (State or Other Jurisdiction of               (IRS Employer
  Incorporation or Organization)              Identification
                                                   No.)
                                                     
        Wall Street Plaza                            
          88 Pine Street                             
        New York, New York 				   10005
 (Address of Principal Executive                 Zip Code
             Offices)                                
                                                     
                              
                       (212) 825-9060
(Registrant's Telephone Number, Including Area Code)
                              
Securities registered pursuant to Section 12 (b) 
of the Act:None
                              
Securities registered pursuant to Section 12(g) of the Act:
                               
         Title of Class: Common Stock, $.01 Par Value
                               
Indicate  by check mark whether the registrant: (1)  has  filed
all  reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12  months
(or for such shorter period that the registrant was required to
file  such  reports), and (2) has been subject to  such  filing
requirements for the past 90 days.  Yes     X 	 No ____

Indicate  by  check  mark if disclosure  of  delinquent  filers
pursuant to Item 405 of Regulation S-K is not contained  herein
and  will  not  be  contained, to the best of the  registrant's
knowledge,   in  definitive  proxy  or  information  statements
incorporated by reference in Part III of this Form 10-K or  any
amendment to this Form 10-K.___

The  aggregate market value of the voting stock  held  by  non-
affiliates  of  the  Registrant as of November  29,  1996,  was
approximately  $75.3  million based upon the  last  sale  price
reported for such date on the Nasdaq Stock Market.

The   number  of  shares  of  the  Registrant's  Common   Stock
outstanding as of  November 29, 1996 was 10,650,172.

              DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  definitive Proxy Statement  for  the  Annual
Meeting  of Stockholders of IPC Information Systems, Inc.  (the
"Proxy Statement"), scheduled to be held on February 14,  1997,
are  incorporated by reference in Part III of  this  Report  on
Form 10-K.

<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<PAGE>                       
                           
               REPORT OF INDEPENDENT ACCOUNTANTS



To the Stockholders
of IPC Information Systems, Inc.:
     
     
     
     We  have  audited the consolidated and combined  financial
statements  and  the  financial  statement  schedule   of   IPC
Information Systems, Inc. listed in Item 14(a) of this Form 10-
K.  These financial statements and financial statement schedule
are  the  responsibility  of  the  Company's  management.   Our
responsibility  is  to express an opinion  on  these  financial
statements  and  financial  statement  schedule  based  on  our
audits.
     
     We  conducted  our  audits  in accordance  with  generally
accepted auditing standards.  Those standards require  that  we
plan and perform the audit to obtain reasonable assurance about
whether   the   financial  statements  are  free  of   material
misstatement.   An audit includes examining, on a  test  basis,
evidence  supporting  the  amounts  and  disclosures   in   the
financial  statements.   An audit also includes  assessing  the
accounting  principles used and significant estimates  made  by
management,  as  well  as  evaluating  the  overall   financial
statement  presentation.  We believe that our audits provide  a
reasonable basis for our opinion.
     
     In our opinion, the financial statements referred to above
present  fairly,  in  all material respects,  the  consolidated
financial  position  of IPC Information  Systems,  Inc.  as  of
September  30,  1996 and 1995 and the consolidated  results  of
their  operations  and their cash flows  for  the  years  ended
September 30, 1996 and 1995 and the combined results  of  their
operations  and  their cash flows for the year ended  September
30,  1994,  in  conformity with generally  accepted  accounting
principles.   In  addition,  in  our  opinion,  the   financial
statement  schedule  referred  to  above,  when  considered  in
relation  to the basic financial statements taken as  a  whole,
presents  fairly,  in  all material respects,  the  information
required to be included therein.
                                        
                                        
                                       COOPERS & LYBRAND L.L.P.
                                        
                                        
New York, New York
December 11, 1996

<PAGE>

		IPC INFORMATION SYSTEMS, INC.
		 CONSOLIDATED BALANCE SHEETS
	(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

						  September 30,
						 1996       1995
<S>                                   <C>        <C>

ASSETS:					
Current assets:						
 Cash and temporary cash investments...   $2,306    $15,786 
   Trade receivables, less allowance 
   of $1,521 and $1,572................   66,468     50,513
   Inventories.........................   36,367     35,111
   Prepaid expenses and other current 
   assets..............................    7,284	9,526 	
	Total current assets.............  112,425    110,936 	
			
Property, plant and equipment, net.....   21,867      9,236
Other assets, net......................    6,665      7,864
	Total assets..................... $140,957   $128,036
			
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:		
  Note payable.........................  $13,900
  Accounts payable.....................   14,369    $14,807
  Accrued liabilities..................   13,502     19,366
  Customer advances and deferred 
  revenue..............................   19,446     29,912
  Short-term lease commitments.........      940
	Total current liabilities........   62,157     64,085
		
Long-term lease commitments............    3,429
Other liabilities......................    3,656      5,447
	Total liabilities................   69,242     69,532 
			
Commitments and contingencies
		
Stockholders' equity:
  Preferred stock - $0.01 par value, 
    authorized 10,000,000 shares,	
    none issued and outstanding
  Common stock - $0.01 par value, 
    authorized 25,000,000 shares; 
    issued 10,860,000 and 10,763,740
    shares at September 30, 1996 
    and 1995, respectively.............      109        107
  Paid-in capital......................   46,831     45,853
  Retained earnings ...................   25,493     13,262
     Less treasury stock, at cost, 
       242,185 shares..................     (718)      (718)	
	Total stockholders' equity.......   71,715     58,504
	Total liabilities and 
        stockholders' equity........... $140,957   $128,036
				
<FN>				
				
				
See Notes to Consolidated and Combined Financial Statements.

</TABLE>


<PAGE>
				
IPC INFORMATION SYSTEMS, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Amount)
					
<TABLE>
<CAPTION>
					    For the year ended September 30,
						 1996		   1995	   1994
					  Consolidated  Consolidated  Combined
<S>                                  <C>           <C>          <C>

Revenues:			
 Product sales and installation... $178,513 	 $139,947 	 $103,529 
 Service..........................   70,995        66,307      60,142
					      249,508 	  206,254 	  163,671
Cost of revenues:						
 Product sales and installation...  122,897 	   95,174      74,233 
 Service..........................   49,793 	   47,907 	   41,395 
					      172,690 	  143,081 	  115,628

    Gross profit..................   76,818 	   63,173 	   48,043 
					
Research and development expenses.   11,467 	   10,108       7,654 
Selling, general and 
 administrative expenses..........   45,143        31,038      23,727

	Income from operations......   20,208 	   22,027      16,662 
				
Interest income/(expense), net....     (678)	      233 	   (1,568)
Gain on renegotiation of lease 
 obligation on vacant facilities..                                517
Other income/(expense), net.......      591           226          65

	Income before provision for
       income taxes...............   20,121        22,486      15,676
Provision/(benefit) for 
 income taxes.....................    7,992         9,219        (873)

	Net income..................  $12,129       $13,267     $16,549 
					
Earnings per share................    $1.15 	    $1.26
						
Weighted average shares
 outstanding......................   10,590 	   10,506 
					
Pro forma data (unaudited) (See Note 7):
				
Pro forma provision for income taxes........................   $6,184 
					
Pro forma earnings per share ...............................    $1.11 
					
Pro forma weighted average shares outstanding...............    8,535 
				
<FN>			
			
See Notes to Consolidated and Combined Financial Statements.
	
</TABLE>
				
<PAGE>

IPC INFORMATION SYSTEMS, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
			
<TABLE>
<CAPTION>

					 For the year ended September 30,
					         1996	   1995        1994
					     Consolidated Consolidated Combined	
<S>                                     <C>         <C>         <C>

Cash flows from operating activities:
  Net income.......................    $12,129 	    $13,267   $16,549
  Adjustments to reconcile net 
   income to net cash provided by 	
   (used in) operating activities:	
   Depreciation and amortization...      4,351 	      2,058     2,317 
   Other amortization..............      2,037 	      1,782     1,971 
   Provision for doubtful accounts.        240          861       786 
   Deferred income taxes...........        674 	     (1,084)   (4,256)
   Gain on renegotiation of lease 
    obligation.....................    	 		          (517)
  Changes in operating assets and liabilities:	
   Trade receivables...............    (16,385)     (11,804)  (11,783)
   Inventories.....................     (1,678)      15,440   (23,100)
   Prepaid expenses and other 
    current assets.................       (288)      (1,606)   (3,545)
   Other assets....................        130 	       (342)      142 
   Accounts payable................       (950)        (717)    3,044 
   Accrued liabilities and other 
    liabilities....................     (4,691)        (630)    3,190 
   Customer advances and deferred 
    revenue........................    (10,306)	     (9,882)   22,455 
	Net cash (used in) provided 
       by operating activities.....    (14,737)	      7,343     7,253 


Cash flows from investing activities:
   Capital expenditures............    (11,747)	     (6,499)   (1,173)
   Purchase of short-term 
    investment.....................                  (2,007)
   Proceeds from sale of short-term
    investment.....................      2,007 
   Acquisition of Bridge 
    Electronics, Inc...............     (2,997)	
	Net cash (used in) investing
       activities..................    (12,737)	     (8,506)   (1,173)


Cash flows from financing activities:
   Net proceeds from note payable..     13,900 
   Proceeds from long-term debt....		   		        123,211 
   Principal payments on capital
    leases.........................       (221)
   Repayment of long-term debt..... 		    (10,663) (125,464)
   Repayment of notes payable to 
    affiliates..................... 	           (1,411)
   Proceeds from the exercise of 
    stock options..................        106 
   Proceeds from the sale of common
    stock.......................... 		     45,337 
   Purchase of treasury stock...... 		       (396)	    (72)
   S corporation distribution......		          (18,530)   (2,470)
	Net cash provided by (used in)
       financing activities........     13,785 	     14,337    (4,795)


Effect of exchange rate changes 
  on cash..........................        209 		 (4)     (243)
Net (decrease) increase in cash....    (13,480)	     13,170     1,042
Cash and temporary cash investments,
  beginning of period..............     15,786 	      2,616     1,574
Cash and temporary cash investments,
  end of period....................     $2,306 	    $15,786    $2,616

		
Supplemental disclosures of cash flow information:
Cash paid during the year for-
   Income taxes....................     $6,863	     $9,876	   $1,390
   Interest........................     $  756	     $   18	   $1,157
Non-cash investing and financing activities-	
   Capital lease obligations.......     $4,369
   Issuance of stock for the 
   acquisition of Bridge 
   Electronics, Inc.  .............     $  700	
				
<FN>
				
See Notes to Consolidated and Combined Financial Statements.	
			

</TABLE>

<PAGE>


IPC INFORMATION SYSTEMS, INC.	
CONSOLIDATED AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY	
(Dollars in Thousands)

<TABLE>
<CAPTION>

									        Total
					    Paid-   Retained            stock-
  				  Common   in     earnings Treasury   holders'
			         stock  capital (deficit)  stock	  equity
<S>                         <C>    <C>       <C>      <C>      <C>  

Combined balance,
 September 30, 1993.....     $75   $8,986   ($1,483)	 ($250)  $7,328 
 Translation adjustment.                       (213)		    (213)
 Net income.............   		         16,549 	         16,549 
 Purchase of treasury 
  stock................. 				         (72)     (72)
 S corporation 
  distribution..........  		          (2,470)	         (2,470)
Combined balance, 
 September 30, 1994......      75    8,986    12,383 	  (322)  21,122

 Translation adjustment.  		             (34)	            (34)
 Net income.............		          13,267           13,267
 Net proceeds from initial
  public offering.......      32   42,219 			   42,251
 Issuance of common stock 
  under employment
   contract.............              824 			      824
 Purchase of treasury 
  stock.................   				        (396)    (396)
 S corporation 
  distribution..........	    (6,176)   (12,354)          (18,530)
Consolidated balance, 
 September 30, 1995.....     107   45,853    13,262 	  (718)  58,504


 Translation adjustment.	                  102 		      102 
 Net income.............			   12,129 		   12,129 
 Issuance of common stock
  in acquisition.........      1 	  699 			      700 
 Issuance of common stock
  under stock purchase
  plan...................      1    171 				      172 
 Issuance of common stock
  under stock option plan.          108 				      108 
Consolidated balance, 
 September 30, 1996......   $109  $46,831   $25,493 	 ($718) $71,715 

<FN>				
			
See Notes to Consolidated and Combined Financial Statements.
		
</TABLE>


<PAGE>
                  IPC INFORMATION SYSTEMS, INC.
                                
    NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                
                                
1. The Company:

   IPC   Information  Systems,  Inc.  ("the  Company")   provides
   globally  integrated telecommunications products and  services
   to  the  financial services industry primarily in  the  United
   States and United Kingdom.  The Company is in the business  of
   designing,  manufacturing, installing  and  servicing  trading
   room  voice  communication  workstations  and  installing  and
   servicing  comprehensive Local Area  Networks.   In  addition,
   International Exchange Networks Ltd. ("IXNET"),  a  subsidiary
   of  the  Company,  has  implemented a facilities-based  global
   network    designed   for   the   specialized    international
   telecommunications  requirements  of  the  financial  services
   industry.

2. Summary of Significant Accounting Policies:

   Principles of Consolidation and Combination
   The consolidated financial statements include the accounts  of
   IPC  Information  Systems,  Inc. and  its  subsidiaries.   The
   combined  financial statements include the accounts of  IPC-US
   and  its  affiliated  company, IPC-UK.  Intercompany  balances
   and transactions have been eliminated.

   Revenue Recognition
   Revenue  from  product  sales and installation  is  recognized
   upon  completion of the installation except for  revenue  from
   sales  to  distributors,  which is recognized  upon  shipment.
   Under   contract  provisions,  customers  are  progress-billed
   prior  to  the completion of the installations.   The  revenue
   related  to  these  advance payments  is  deferred  until  the
   system    installations   are   completed.    Contracts    for
   maintenance  are  billed  in  advance,  and  are  recorded  as
   deferred  revenue and recognized ratably over the  contractual
   periods.  Revenue from network services are recognized in  the
   month the related service is provided.

   Cash and Temporary Cash Investments
   The  Company  places cash with several high quality  financial
   institutions and thereby limits the amount of credit  exposure
   to   any   single   financial  institution.   Temporary   cash
   investments  with  original  maturities  of  less  than  three
   months  are  considered cash equivalents and consist  of  high
   grade  municipal bond funds and time deposits. Temporary  cash
   investments  are  stated  at  cost,  which  approximates  fair
   value.  These  investments  are  not  subject  to  significant
   market risk.
                                
   Trade Receivables
   Trade  accounts receivable potentially expose the  Company  to
   concentrations of credit risk, as a large volume  of  business
   is   conducted  with  several  major  financial  institutions,
   primarily  companies in the brokerage, banking  and  financial
   services industries.  To help reduce this risk, customers  are
   progress-billed prior to the completion of the contract.

   Inventories
   Inventories are stated at the lower of FIFO (first  in,  first
   out)  cost  or  market.  Inventory costs  include  all  direct
   manufacturing costs and applied overhead.

<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                



   Property, Plant and Equipment
   Property,  plant  and  equipment  are  stated  at   cost   and
   depreciated  on  a  straight-line basis over  their  estimated
   useful  lives.   Network  switching equipment  are  stated  at
   cost.   Various costs are capitalized during the  installation
   and  expansion  of  the network.  Depreciation  is  calculated
   using  the  straight  line method over  the  estimated  useful
   lives  beginning  in  the  year  the  asset  was  placed  into
   service.

   Capitalized Product Development Costs
   Capitalized   product   development  costs   represent   costs
   incurred  after  technological feasibility is established  for
   the  related product.  The amortization of capitalized product
   development  costs  is, the greater of  the  amounts  computed
   based  on the estimated revenue distribution over the products
   revenue-producing lives, or the straight-line  basis,  not  to
   exceed   four  years,  beginning  when  the  product   becomes
   available  for  general  release  to  customers.   No  product
   development   costs  were  capitalized  in  the  years   ended
   September  30,  1996  and  1995.   There  are  no  unamortized
   product  development costs at September 30, 1996.  Unamortized
   product  development costs at September 30, 1995 was $626  and
   is  included in other assets.  Amortization expense  for  each
   of  the  years  ended September 30, 1996, 1995  and  1994  was
   $626.
     
   Intangible Assets
   Intangible  assets, which are carried at cost less accumulated
   amortization,  consist  primarily of acquired  technology  and
   goodwill.   Goodwill represents the excess of  the  cost  over
   the  fair  value  of the identifiable tangible and  intangible
   assets  acquired in various acquisitions. Costs  allocated  to
   technology   and   goodwill  acquired  in   acquisitions   are
   amortized   on   a  straight-line  basis  over   the   periods
   benefited,  principally 7 to 10 years.  The  Company  measures
   the  recoverability of acquired technology and goodwill  based
   on anticipated gross operating income.
     
   Research and Development
   Research  and development expenditures are charged to  expense
   as incurred.
   
   Income Taxes
   In   accordance   with   Statement  of  Financial   Accounting
   Standards  No. 109, "Accounting for Income Taxes"  ("SFAS  No.
   109"),  the Company recognizes deferred income taxes  for  the
   tax  consequences in future years of differences  between  the
   tax  basis  of  assets  and liabilities  and  their  financial
   reporting amounts at each year end, based on enacted tax  laws
   and  statutory  tax rates applicable to the periods  in  which
   the   differences  are  expected  to  affect  taxable  income.
   Valuation allowances are established when necessary to  reduce
   deferred  tax assets to the amount that is "more  likely  than
   not"  to  be realized.  Provision for income taxes is the  tax
   payable  for  the period and the change during the  period  in
   deferred tax assets and liabilities.
   
   Use of Estimates
   The   preparation  of  financial  statements   in   conformity
   with   generally   accepted  accounting  principles   requires
   management  to make estimates and assumptions that affect  the
   reported  amounts  of  assets and liabilities,  disclosure  of
   contingent  assets  and  liabilities  at  the  date   of   the
   financial statements and the reported amounts of revenues  and
   expenses  during  the reported period.  Actual  results  could
   differ from those estimates.


<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   
   Foreign Currency Translation Adjustment
   The  balance sheets and statements of operations of  IPC's  UK
   subsidiary  ("IPC-UK") are measured using the  local  currency
   as  the  functional currency. Assets and liabilities of IPC-UK
   are  translated  at the year end exchange rate.   Revenue  and
   expense  amounts  are  translated  at  the  average  rate   of
   exchange  prevailing during the year.  Translation adjustments
   arising  from the use of differing exchange rates from  period
   to   period   are  included  in  the  cumulative   translation
   adjustment account in stockholders' equity.
   
   Earnings Per Share
   Earnings  per  share are based on the weighted average  number
   of  shares  of  common  stock  and  common  stock  equivalents
   outstanding  during  the period, computed in  accordance  with
   the  treasury stock method.  Historical earnings per share was
   $2.27 for the year ended September 30, 1994.
   
3. Acquisitions:
   
   During  June 1995, the Company acquired a controlling interest
   in  International  Exchange  Networks,  Ltd.  ("IXNET").   The
   Company  acquired 80% of IXNET for providing $5,500 in working
   capital.    The  acquisition  was  accounted  for  using   the
   purchase  method  of accounting. Included in other  assets  is
   $1,041   and   $1,222  at  September  30,   1996   and   1995,
   respectively,  representing the excess of the  cost  over  the
   fair  value  of  the  identifiable tangible  assets  acquired,
   allocated to acquired technology.
   
   During  April 1995, the Company acquired the assets of  Bridge
   Electronics,   Inc.  ("IPC  Bridge").   The   terms   of   the
   acquisition  included a payment in January 1996 of  $2,025  in
   cash  and 76,923 shares of the Company's common stock,  valued
   at  $700.  Additionally, during fiscal 1996, the Company  made
   $1,000  in  contingent  acquisition  payments  based  on   IPC
   Bridge's  performance.   The  acquisition  was  accounted  for
   using  the purchase method of accounting.  Included  in  other
   assets  is  $3,202 and $2,501 at September 30, 1996 and  1995,
   respectively,  representing the excess of the  cost  over  the
   fair  value of the identifiable tangible and intangible assets
   acquired.
   
4. Inventories:
`
<TABLE>
<CAPTION>
                                                  September 30,
                                                  1996      1995
<S>                                               <C>       <C>
                                         
Components and manufacturing work in process    $13,913   $ 9,245
Inventory on customer sites awaiting 
  installation                                   12,503    18,984
   Parts and maintenance supplies                 9,951     6,882

                                                $36,367   $35,111
</TABLE>

<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   
     
5. Property, Plant and Equipment:

<TABLE>
<CAPTION>
     
                                               September 30,
                                              1996       1995
<S>                                            <C>        <C>
                                    
Machinery and Equipment                     $19,479    $13,027
Furniture and Fixtures                        2,006      1,654 
Leasehold Improvements                        5,424      2,789
Network Switching Equipment                   1,600          -
Network Switching Equipment 
 under capital leases                         4,619          -
Total depreciable property, plant and        33,128     17,470
 equipment
   Less, accumulated depreciation and      
    amortization                            (13,376)    (9,037)
                                            $19,752    $ 8,433 
Land                                            329        329
Construction in Progress                      1,786        474 
                                             $21,86    $ 9,236

</TABLE>

6. Note Payable:

   In  April  1996, the Company signed a promissory note  with  a
   bank  increasing the Company's line of credit from $15,000  to
   $25,000.   At  September 30, 1996, $13,900  of  the  line  was
   outstanding and is payable upon demand.  The weighted  average
   interest  rate on borrowings for fiscal year 1996  was  6.31%.
   At  September 30, 1995 there was no amount outstanding on  the
   line of credit.

7. Initial Public Offering:

   The   Company  completed  an  initial  public  offering   (the
   "Offering") of 3,250,000 shares of common stock at $15.00  per
   share  on  October 3, 1994.  In connection with the  Offering,
   on  May  9, 1994, the Company's stockholders approved a change
   in  the Company's capital stock to authorize 25,000,000 shares
   of  $.01 par value common stock and 10,000,000 shares of  $.01
   par   value   preferred   stock.   Pre-Offering   stockholders
   exchanged their shares for new common shares on a 620.991  for
   1  basis  prior to consummation of the Offering. The financial
   statements reflect this change in capitalization.

   Pro Forma Information
   Pro  forma  provision for income taxes for 1994  assumes  that
   IPC  was  subject to corporate federal income  taxes  for  the
   year  and  excludes  the  tax  benefit  associated  with   the
   termination  of the Company's S corporation status  (see  Note
   11).   The  pro  forma  weighted  average  number  of   shares
   outstanding  is  the  historical weighted  average  number  of
   shares outstanding during the year adjusted to give effect  to
   the  number of shares, at the initial offering price of $15.00
   per  share, whose proceeds were necessary to pay the remaining
   S  corporation  distribution. The pro  forma  net  income  per
   share  has  been  computed by dividing pro  forma  net  income
   (income  before  provision for income  taxes  less  pro  forma
   provision for income taxes) by the pro forma weighted  average
   number of shares outstanding.
   
<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   
   
8. Deferred Compensation and Other Benefit Plans:

   The   Company   has   assumed  responsibility   for   deferred
   compensation  agreements with certain past  key  officers  and
   employees.   Amounts  to  be  paid  range  from  $20-$75   per
   individual  per annum and are non-interest-bearing,  with  the
   payments  commencing on specified dates.   Payments  began  in
   1992  and  continue  through 2019.  The gross  and  discounted
   present  value (using an interest rate of 7.5%), net  of  cash
   payments,  of  the amounts to be paid under these  agreements,
   aggregated  $7,300  and  $3,732  at  September  30,  1996  and
   $7,450 and $3,606 at September 30, 1995, respectively.
   
   Approximate payments for subsequent annual periods related  to
   the  deferred compensation agreements, at September 30,  1996,
   are as follows:

<TABLE>

   <S>                                                 <C>
   1997                                                $187
   1998                                                 225
   1999                                                 280
   2000                                                 320
   2001                                                 390
   Thereafter                                         5,898   
                                                     $7,300
   
</TABLE>

   In  April 1995, IPC terminated its participation in a  defined
   contribution  plan sponsored by Kleinknecht  Electric  Company
   ("KEC"),  an affiliated company, and adopted its own plan  for
   all  eligible US employees. According to plan provisions,  IPC
   contributions are discretionary  and are subject  to  approval
   by  the Board of Directors.  Eligible employees may contribute
   up  to 15% of their annual compensation. IPC contributed  $556
   and  $520  for  the years ended September 30, 1996  and  1995,
   respectively.  For  the  year ended September  30,  1994,  the
   Company elected not to contribute to the plan.
   
   IPC-UK  has  a  defined  contribution  plan  covering  all  UK
   employees.   Employee  contributions are limited  by  statute,
   generally  not  to  exceed  17.5%  of  base  salary.    IPC-UK
   contributions,  net  of  forfeitures,  for  the  years   ended
   September  30,  1996, 1995 and 1994 were $229,  $92  and  $76,
   respectively.
   
   The  Company  paid to KEC and Kleinknecht Electric  Company  -
   New   Jersey  ("KEC-NJ"),  also  an  affiliated  company,   in
   accordance   with  labor  pooling  agreements,   approximately
   $7,750,  $5,074 and $4,744 for the years ended  September  30,
   1996,  1995 and 1994, respectively, representing pass  through
   contributions to various union sponsored pension plans.
   
   
   
 <PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                     
   
   
   
   
   
   Stock Option and Incentive Plan

   The following table summarizes stock option plan activity:

<TABLE>
<CAPTION>

                                Shares 
                             Under Option        Option Prices
<S>                               <C>                 <C>
Balance, September 30, 1994
       Granted                 263,500         $13.50 - $18.00
       Canceled                (16,000)            $15.00
Balance, September 30, 1995    247,500         $13.50 - $18.00
       Granted                 573,000        $14.125 - $19.00
       Granted                  25,000             $25.00
       Granted                  25,000             $40.00
       Exercised                (8,964)        $13.75 - $15.00
       Canceled                (35,335)        $13.75 - $19.00
Balance, September 30, 1996    826,201

Exercisable,
  September 30, 1996            66,535 

</TABLE>
   
   Employees  generally vest in stock options over  a  period  of
   three  to  five years.  As of September 30, 1996, the  Company
   had   reserved  1,579,337  shares  of  common  stock  for  the
   exercise of options.
   
   The  option  plan  also  provides for the  issuance  of  stock
   appreciation rights and restricted stock features under  which
   shares  of  common stock may be issued to eligible  employees.
   No such awards have been made.
   
   During October 1995, the Financial Accounting Standards  Board
   issued  Statement of Financial Accounting Standards  No.  123,
   "Accounting  for  Stock Based Compensation."   The  disclosure
   requirements  under  this  Standard will  affect  the  Company
   beginning in fiscal 1997 for all of its stock options  granted
   after  September  30,  1995.  The Statement  allows  alternate
   accounting  methods  and the Company intends  to  account  for
   stock  options  as  in  the past under  Accounting  Principles
   Board  Opinion No. 25.  The Company will disclose certain  pro
   forma  information  required by the Statement  beginning  with
   the Company's next annual report.

   Employee Stock Purchase Plan
   In  1994, the Company adopted an employee stock purchase  plan
   and  reserved  526,813  shares of common  stock  for  issuance
   thereunder.   Under  the stock purchase  plan,  the  Company's
   employees  may purchase shares of common stock at a price  per
   share  that  is  the  lesser of the common stock  fair  market
   value on the first business day of the purchase period or  90%
   of  the common stock fair market value on the last day of  the
   purchase  period, but in no event less than 85% of the  common
   stock  fair  market value on either the option grant  date  or
   option  exercise  date.  Through September  30,  1996,  10,373
   shares  have  been issued and 516,440 shares are reserved  for
   future issuances under this plan.
   
   
<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                      
   
9. Commitments and Contingencies:

  Litigation

  Knight  Ventures, Inc. ("KVI"), a company principally owned  by
  Richard   P.   Kleinknecht  and  Peter  J.   Kleinknecht   (the
  "Principal  Stockholders"),  and  the  former  parent  of   the
  Company,   agreed   to  settle  its  litigation   with   Contel
  Corporation    ("Contel")    over,    among    other    claims,
  responsibility  for taxes, tax liens, tax assessments  and  tax
  warrants with respect to Contel IPC, for periods prior  to  the
  acquisition of the Company from Contel.
  
  As  of  May  9,  1994,  the  Company,  KVI  and  the  Principal
  Stockholders  entered into a Tax Allocation and Indemnification
  Agreement  (the  "Tax Agreement") relating to their  respective
  income  tax  liabilities  and  certain  related  matters  as  a
  consequence  of the Company's termination of its S  Corporation
  status  and  its  initial public offering.   In  addition,  the
  Company,  KVI  and the Principal Stockholders  agreed,  to  the
  extent  that either KVI or the Principal Stockholders  receives
  any  cash  proceeds or other benefit in the form of a reduction
  in   amounts  payable  to  Contel,  as  a  consequence  of  the
  litigation,  they  will pay to the Company the  lesser  of  (i)
  such  benefit or (ii) the amount paid by the Company for  taxes
  and related charges subject to the dispute, plus the amount  of
  any  expenses  of  such  litigation  incurred  by  the  Company
  following  the  consummation of the  Company's  initial  public
  offering.

  As  of  May  15, 1996, Contel, KVI, the Principal  Stockholders
  and  the  Company,  although not a  party  to  the  litigation,
  entered  into  a settlement agreement and mutual releases.   In
  connection  with this settlement agreement, KVI  has  executed,
  and  the Principal Stockholders have guaranteed, a note payable
  to   the   Company,  in  the  amount  of  $1,300,  to   fulfill
  obligations under the Tax Agreement.
   
   Operating Leases
   The  Company  has  entered into various operating  leases  for
   real estate, equipment and automobiles.
   
   Rental  expenses under operating leases (excluding rentals  on
   vacant  facilities)  were $6,513, $5,587 and  $5,252  for  the
   years  ended  September 30, 1996, 1995 and 1994, respectively.
   Future   minimum   annual  rental  payments   required   under
   noncancellable operating leases (including rentals  on  vacant
   facilities) at September 30, 1996 are as follows:
   
<TABLE>

   <S>                                                   <C>
   1997                                                 $5,688
   1998                                                  4,707
   1999                                                  3,270
   2000                                                  2,757
   2001                                                  2,474
   Thereafter                                            4,282
                                                       $23,178

</TABLE>
   
   The  Company  has  accrued for the minimum annual  rental  and
   estimated   building  operating  costs  under   noncancellable
   operating leases for vacated facilities.  These leases  extend
   through  May 1998. The gross and discounted present  value  of
   the  accrued  liability,  net of payments  made,  

<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   
   approximated  $1,224  and  $1,200  at  September 30, 1996  and
   $1,958 and $1,844 at September 30,  1995,  respectively.   The
   discount  rate applied was 6.8%.

   Capital Leases
   IXNET  has entered into two capital leases during fiscal  1996
   to  purchase  certain  network switching  equipment  used  for
   IXNET's international private network.

   Future  minimum  lease payments required under  noncancellable
   capital leases at September 30, 1996 are as follows:

<TABLE>

   <S>                                                   <C>
   1997                                                 $1,326
   1998                                                  1,327
   1999                                                  1,208
   2000                                                    850
   2001                                                    638
                                                         5,349
   Less, amount representing interest                     (980)
  
   Present value of net minimum lease payments under 
   capital leases                                       $4,369

</TABLE>
  
   Employment Agreements
   The  Company  has  executed employment  contracts  for  future
   services,  that  vary  in length up to 5 years,  with  certain
   senior   executives  for  which  the  Company  has  a  minimum
   commitment  aggregating approximately $6,466 at September  30,
   1996.
   
10.Related Party Transactions:
   
   Services Provided
   Affiliated  companies performed various services and  provided
   certain  equipment to the Company.  Services and/or  equipment
   provided  by affiliates are billed to the Company and  settled
   through  a periodic cash transfer to the respective affiliate.
   Approximately  $52,592,  $38,666  and  $36,293  of   technical
   labor,  and $2,327, $2,083 and $1,767 of administrative  labor
   was  provided  through agreements with KEC and  KEC-NJ  during
   the   years   ended  September  30,  1996,  1995   and   1994,
   respectively.
   
   Effective  October 1, 1993, the Company formalized in  writing
   existing  arrangements with KEC and KEC-NJ with respect  to  a
   pool  of  field  technicians utilized by all three  companies.
   KEC  and  KEC-NJ are responsible for administering the payroll
   and  related services for these technical and clerical workers
   and  the Company reimburses all compensation and benefits paid
   by  KEC and KEC-NJ attributable to services performed for  the
   Company  plus  a  fee equal to 2.5% of such  costs.   For  the
   years  ended September 30, 1996, 1995 and 1994, KEC and KEC-NJ
   billed  the Company payroll administrative services of $1,374,
   $1,024 and $922, respectively.
   
   A  portion of the Company's New York branch operation  is  co-
   located  with  KEC  in  a  building  owned  by  the  Principal
   Stockholders.   For  each  of the years  ended  September  30,
   1996,  1995  and  1994, the Company was charged  approximately
   $430  for  rent  expense.  In addition, for  the  years  

<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)

   ended September 30, 1996, 1995 and 1994, the Company rented on
   a month to month  basis,  two other facilities  from  entities
   controlled  by  the  Principal  Stockholders  for  which   the
   Company   was  charged  approximately  $30,  $55   and   $130,
   respectively.
   
   Equipment Rentals
   Equipment  rentals from an affiliated company were $898,  $975
   and  $1,201 for the years ended September 30, 1996,  1995  and
   1994, respectively.
   
   Subcontracts and Other
   The  Company  and other companies controlled by the  Principal
   Stockholders  periodically subcontract  certain  work  to  one
   another.   Amounts  charged  to companies  controlled  by  the
   Principal  Stockholders under subcontracts with  IPC  for  the
   years   ended   September  30,  1996,  1995  and   1994   were
   approximately  $993,  $2,220  and  $128,  respectively,  while
   amounts  charged  to  IPC  under subcontracts  with  companies
   controlled  by  the Principal Stockholders were  approximately
   $703, $587 and $993, respectively.
   
   In  addition  to  the foregoing, the Company, KEC  and  KEC-NJ
   entered  into  a 20 year agreement dated as of  May  9,  1994,
   with  respect to business opportunities regarding  cabling  of
   communication  infrastructures.  KEC and  KEC-NJ  have  agreed
   not  to bid for or accept cabling jobs in competition with the
   Company,  if  it  intends  to bid or  accept  such  work.   In
   addition,  because  the Company is not a  licensed  electrical
   contractor,  it  has  agreed to refrain from  bidding  for  or
   accepting  without the consent of KEC or KEC-NJ, as  the  case
   may  be,  all  opportunities that combine both electrical  and
   cabling  work.   The Company has also agreed  to  continue  to
   refer  to  KEC  and KEC-NJ certain electrical contracting  bid
   opportunities identified from time to time.  Pursuant to  such
   agreement,  all estimates for cabling work shall be  generated
   by  the Company on behalf of KEC, and KEC will pay the Company
   a nominal amount for preparing such estimates.
   
   The   Company  and  companies  controlled  by  the   Principal
   Stockholders  also  charge  each other  certain  miscellaneous
   expenses,  including,  but not limited  to,  office  equipment
   rentals and certain other administrative expenses.
   
11.Income Taxes:

   Pretax earnings consisted of the following:

<TABLE>
<CAPTION>
                              For the year ended September 30,
                                1996        1995        1994
<S>                              <C>         <C>         <C>

     Pretax earnings:
     United States            $10,020     $17,158     $ 9,760
     Foreign                   10,101       5,328       5,916
     Total pretax earnings    $20,121     $22,486     $15,676

</TABLE>

  Effective October 1, 1992,  IPC-US elected to be treated as  an
  S  corporation for federal income tax purposes.   In  the  year
  ended  September  30,  1994  the Company  was  not  subject  to
  federal  income taxes.  The Company's income was passed through
  and taxed directly to the stockholders.
   

<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   


    On   September   29,  1994,  IPC-US  filed   a   notification
    terminating  its S corporation status, effective  October  1,
    1994.   For the years ended September 30, 1996 and 1995,  the
    Company was subject to corporate federal income taxes.
    
    
    The provision (benefit) for income taxes consisted of the
    following:
     
<TABLE>
<CAPTION>
                                                               
                                For the year ended September 30,
                                1996          1995          1994
     <S>                        <C>           <C>           <C>

     Current:                                       
      Federal                  $1,844       $ 5,887
      State and local           1,967         2,558        $1,160
      Foreign                   3,507         1,858         2,223
                                7,318        10,303         3,383
     Deferred:                                      
      Termination of                               
       S corporation
       status                                              (3,295)
      Federal                     513          (673)
      State and local             207          (359)         (744)
      Foreign                     (46)          (52)         (217)
                                  674        (1,084)       (4,256)
     Income tax           
      provision / (benefit)    $7,992       $ 9,219        $ (873)

</TABLE>

   The components of net deferred tax assets are as follows:
                                                                 
<TABLE>
<CAPTION>
                                       September 30,
                              1996                   1995
                        US   Foreign  Total    US   Foreign  Total
<S>                     <C>    <C>     <C>     <C>   <C>      <C>

Deferred tax assets:                                          
 Excess of book over
  tax depreciation     $917     $59    $976  $1,133    $26  $1,159
 Amortization 
  intangibles            66              66      25             25
 Inventory and
  receivables         2,172     221   2,393   2,602    214   2,816
Accrued expenses      1,228       5   1,233   1,570	       1,570
                                                              
Total deferred tax
assets                4,383     285   4,668   5,330    240   5,570
                  
Deferred tax 
liabilities:

 Amortization of
  intangibles                                  (227)    (1)   (228)
                       ____    ____    ____    ____    ____   ____   
                                      
Total deferred tax
liabilities                                    (227)    (1)   (228)
                       ____    ____    ____    ____    ____   ____
Net deferred 
 tax asset           $4,383    $285  $4,668  $5,103    $239  $5,342


</TABLE>
   
   These   net   deferred   tax  assets  arise   from   temporary
   differences  related  to  depreciation,  the  amortization  of
   intangible  assets,  the  allowance  for  doubtful   accounts,
   inventory  valuation and the Company's various  accruals.   No
   valuation  allowance was required at September  30,  1996  and
   1995.
   
<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   

   A  reconciliation between the statutory US federal income  tax
   rate  and the Company's effective tax rate, excluding minority
   interest, is as follows:
   

<TABLE>
<CAPTION>

                                        For the year ended
                                           September 30,
                                         1996        1995

<S>                                      <C>         <C>

   Statutory US federal tax rate         35.0%       35.0%
   State and local income taxes,
     net of federal benefit               6.8         6.4
   Tax exempt interest income                        (0.5)
   Other, net                            (0.8)        0.1
                                         41.0%       41.0%

</TABLE>
   
12.  Operations by Geographic Areas:

   Information about the Company's operations by geographic area
   is as follows:

<TABLE>
<CAPTION>
     
                           For the year ended September 30,
                         1996           1995            1994
<S>                       <C>            <C>             <C>

Revenues:                                                   
United States         $ 202,926      $ 186,355       $ 142,130
United Kingdom           46,582         19,899          21,541
                      $ 249,508      $ 206,254       $ 163,671
                                                       
Operating Profits:
United States         $  24,485      $  30,714       $  20,371
United Kingdom            9,745          4,192           5,345
Corporate               (14,022)       (12,879)         (9,054)
                        $20,208        $22,027         $16,662
                                                       
Identifiable Assets:
United States         $ 111,829      $  98,228       $  94,530
United Kingdom           17,547         25,417           8,799
Corporate                11,581          4,391           7,373
                      $ 140,957      $ 128,036       $ 110,702

</TABLE>
   
   Included  in  the  United States revenues are export  sales  to
   unaffiliated customers of $16,126, $17,063 and $12,849 for  the
   years  ended  September 30, 1996, 1995 and 1994,  respectively.
   Transfers  from  the  United  States  to  the  United  Kingdom,
   eliminated  in consolidation, were $12,681, $7,999  and  $6,764
   for  the  years  ended  September  30,  1996,  1995  and  1994,
   respectively.
   
   For  the year ended September 30, 1996, approximately  13%  of
   total  revenues were from one customer.  Corporate assets  are
   principally prepaids, intangibles and other assets.
   
<PAGE>

                   IPC INFORMATION SYSTEMS, INC.
                                
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS,Continued
                                
        (Dollars in Thousands, Except Per Share Amounts)
                                   



13. Quarterly Financial Information (unaudited)
		
The following tables set forth unaudited quarterly financial
information for the years ended September 30, 1996 and 1995:
		

<TABLE>
<CAPTION>

	                                  Quarter Ended	
	                   December 31  March 31  June 30  September 30
<S>                          <C>         <C>      <C>       <C>

Year Ended			
September 30, 1996:	
			
Net Revenues	         $59,750 	  $62,198 	$69,424   $58,136 
Gross Profit	          18,537 	   19,279 	 20,740    18,262 
Net earnings	           3,482 	    3,641 	  3,701     1,305 
Earnings per Share	     $0.33 	    $0.34 	  $0.35     $0.12 
		
		
Year Ended	
September 30, 1995:	
		
Net Revenues	         $47,716 	  $50,528 	$52,458   $55,552 
Gross Profit	          14,511 	   15,415 	 16,138    17,109 
Net earnings	           3,068 	    3,268 	  3,486     3,445 
Earnings per Share	     $0.29 	    $0.31 	  $0.33     $0.33 

</TABLE>

The quarterly earnings per share information is computed separately
for each period.  Therefore, the sum of such  quarterly  per  share
amounts may differ from the total for the year.
	
<PAGE>

			                                Schedule II

                   IPC INFORMATION SYSTEMS, INC.			
	
                 VALUATION AND QUALIFYING ACCOUNTS	
                      (Dollars in Thousands)

<TABLE>
<CAPTION>
						
COL. A            COL. B	     COL. C         COL. D     COL. E
					   Additions
		      Balance		   Charged to 
		         at	    Charged to costs and		 Balance 
		      Beginning costs and    Other		        at End
Description	      of Period Expenses   Accounts  Deductions of Period
						
<S>                    <C>      <C>       <C>        <C>       <C>

For the Year 
September 30, 1994		
 Provision for 
  Doubtful Accounts    $823     $786 	           $278(1) $1,331 
 Provision for Inventory				
      Obsolescense... $3,925  $2,062 		    $427(2)	 $5,560 
For the Year 
September 30, 1995				
 Provision for 
  Doubtful Accounts   $1,331    $861 		    $620(1)	 $1,572 
 Provision for Inventory					
      Obsolescense... $5,560   $3,052 		  $1,123(2)	 $7,489 
For the Year 
September 30, 1996	
 Provision for 
  Doubtful Accounts   $1,572    $240 		    $291(1)	 $1,521
 Provision for Inventory		
      Obsolescense... $7,489   $1,143 		  $2,267(2)	 $6,365 


<FN>
			
(1) Doubtful Accounts Written Off, Net of Cash Recovered
(2) Inventory Written Off
		
</TABLE>

<PAGE>