"ORIGINAL"Table 1998of NTL(1) ACQUISITIONS(2) CONSUMERCO(3) BT CABLE(4) U.K. TOTAL ------ --------------- ------------- ----------- ---------- Homes in Franchise (5) 2,090,000 3,037,600 6,049,600 234,000 11,411,200 Homes passed 1,450,600 2,436,300 4,315,800 189,100 8,391,800 Homes marketed (Tel) 1,257,600 2,134,400 4,065,700 0 7,457,700 Homes marketed (Cable TV) 1,257,600 2,187,000 4,065,700 170,900 7,681,200 Customers (6) 638,000 934,700 1,197,600 72,100 2,842,400 Single (Cable TV or Tel) 51,100 387,700 335,800 72,100 846,700 Dual (Cable TV + Tel) 586,900 547,000 861,800 0 1,995,700 Telephone (6) 614,500 846,500 1,076,200 0 2,537,200 Cable TV 610,400 635,200 983,200 72,100 2,300,900 Broadband Internet 4,800 8,000 0 0 12,800 Total RGUs (7) 1,229,700 1,489,700 2,059,400 72,100 4,850,900 PENETRATION Cable TV 48.5% 29.0% 24.2% 42.2% 30.0% Telephone 48.9% 39.7% 26.5% n/a 34.0% Customer 50.7% 42.7% 29.5% 42.2% 37.0% RGU 97.8% 68.1% 50.7% 42.2% 63.2% Dual / Triple 92.0% 58.5% 72.0% 0.0% 70.2%Contents

~~BROADBAND~~UNITED ~~NARROWBAND~~STATES SECURITIES ~~----------------------------------------------------------------------------------------------------------------~~AND ~~NTLWORLD~~EXCHANGE ~~NTLWORLD NTL DIRECT U.K. NTL DIRECT (ON-NET) (OFF-NET) (OTHER) WHOLESALE TOTAL ---------- -------- --------- ------- --------- ----- 12,800 455,600 75,700 327,400 952,800 1,824,300~~COMMISSION

(U.K.) (Ireland) (Swiss) (France) (France) (Germany) (Sweden) Gross (2) NTL Cablelink Cablecom(1) 1G Noos eKabel B2 Total (pending) Ownership Interest 100% 100% 100% 27% 32.5% 25% Homes in Franchise 11Washington,~~411.2~~ ~~420~~D.~~0 1,887~~C.9 287.0 3,179.0 2,800.0 305.7 20,290.8 Homes passed 8,391.8 417.7 1,887.9 265.5 2,563.0 1,828.0 101.0 15,454.9 Homes marketed (Telco) 7,457.7 10.7 -- -- 1.0 -- -- 7,469.4 Homes marketed (Cable TV) 7,681.2 417.7 1,705.8 212.4 2,563.0 1,828.0 -- 14,408.1 Homes marketed (Ethernet) -- -- -- -- -- -- 51.6 51.6 Customers (On-Net) 2,842.4 370.2 1,558.4 48.6 765.0 1,294.0 15.0 6,893.6 Single RGU 846.7 367.9 1,531.2 48.6 718.0 1,294.0 15.0 4,821.4 Dual / Triple RGU 1,995.7 2.3 27.2 -- 47.0 -- -- 2,072.2 Cable Television 2,300.9 370.2 1,558.4 48.6 747.0 1,294.0 -- 6,319.1 Digital 530.7 -- 21.0 -- 244.0 -- -- 795.7 Telephone (Direct) 2,537.2 2.3 -- -- 1.0 -- -- 2,540.5 Broadband Internet 12.8 -- 27.4 -- 63.0 -- 15.0 118.2 RGUs 4,850.9 372.5 1,585.8 48.6 811.0 1,294.0 15.0 8,977.8 Total Internet Subscribers 1,824.3 -- 179.2 -- 63.0 -- 15.0 2,081.5 Off-Net Subscribers 1,036.6 -- -- -- -- -- -- 1,036.6 Telephone (Indirect) 466.0 -- -- -- -- -- -- 466.0 Business Customers 76.3 1.0 3.2 -- 38.0 -- -- 118.5 Total Customers 4,421.3 371.2 1,561.6 48.6 803.0 1,294.0 15.0 8,514.7 Total Consumer Services 7,128.4 372.5 1,737.6 48.6 811.0 1,294.0 15.0 11,407.1 PENETRATION Cable Television 30.0% 88.6% 91.4% 22.9% 29.1% 70.8% na 43.9% Telephone 34.0% nm na na na na na 34.0% Customer 37.0% 88.6% 91.4% 22.9% 29.8% 70.8% 29.1% 47.8% RGU 63.2% 89.2% 93.0% 22.9% 31.6% 70.8% 29.1% 62.3% Dual / Triple 70.2% 0.6% 1.7% 0.0% 6.1% 0.0% 0.0% 30.1%20549

~~LAST~~FORM ~~SALE PRICE~~ 10--------------- HIGH LOW ---- --- 1999 First Quarter $53.20 $34.41 Second Quarter 64.08 47.05 Third Quarter 67.31 52.56 Fourth Quarter 101.20 51.75 2000 First Quarter 109.69 78.88 Second Quarter 94.94 50.69 Third Quarter 61.38 37.31 Fourth Quarter 50.38 20.00 2001 First Quarter (through March 16, 2001) 40.13 22.25K

~~YEAR~~ANNUAL ~~ENDED~~REPORT ~~DECEMBER~~PURSUANT ~~31,~~TO ~~2000~~SECTION ~~1999~~13 ~~1998~~OR ~~1997 1996 ---- ---- ---- ---- ----~~ 15(1d) ~~(2)~~OF ~~(3)~~THE SECURITIES ~~(4)~~EXCHANGE ~~Income~~ACT ~~statement~~OF ~~data:~~1934 For ~~Operating~~the ~~revenues~~fiscal ~~$2,840.8~~year ~~$1,584.1~~ended ~~$747.0 $491.8 $228.3 (Loss) before extraordinary item (2~~December 31,~~963.7)~~ (732.7) (503.9) (328.6) (254.5) Net (loss) (2,963.7) (735.7) (534.6) (333.1) (254.5) Basic and diluted net (loss) per common share: (Loss) per common share before extraordinary item (5) (14.54) (6.75) (8.12) (6.79) (5.25) Net (loss) per common share (5) (14.54) (6.78) (8.60) (6.88) (5.25) Weighted average number of common shares used in the computation of basic and diluted net loss per common 217.1 119.4 64.4 50.2 48.5 share (5)2002

ASCommission OFfile ~~DECEMBER~~number ~~31, 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- (1) (2) (3) (4) Working capital (deficiency) $(840.~~0~~) $2,261.4 $600.5 $(52.3) $242.1 Fixed assets, net 12,693.0 5,597.7 3,854.4 1,757.0 1,459.5 Total assets 28,383.7 12,211.6 6,194.1 2,421.6 2,454.6 Long~~-~~term debt 15,044.1 8,798.0 5,043.8 2,015.1 1,732.2 Redeemable preferred stock 2,083.2 141.8 124.1 108.5 -- Shareholders' equity (deficiency) 8,367.4 2,136.9 355.2 (61.7) 328.1~~30673

~~Year~~NTL Ending Year Ending Year Ending Year Ending Year Ending 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 Thereafter -------- -------- -------- -------- -------- ---------- (in millions) Long-term Debt Including Current Portion: U.S. dollars Fixed Rate - - - $285.1 $808.8 $7EUROPE,~~172.1~~ ~~Average Interest Rate 13~~INC.25% 12.09% 9.74% U.K. pound Fixed Rate - - - - - pound sterling 890.0 Average Interest Rate 10.09% Average Forward Exchange Rate 1.5097 Euro Fixed Rate - - - - - euro 810.0 Average Interest Rate 10.10% Average Forward Exchange Rate .9717 U.K. pound Floating Rate pound pound pound pound pound sterling 4.8 sterling L4.8 sterling 4.8 sterling 90.0 sterling 2,187.2 - Average Interest Rate LIBOR LIBOR LIBOR LIBOR LIBOR plus 2.04% plus 2.04% plus 2.04% plus 2.25% plus 2.25% Average Forward Exchange Rate 1.4988 1.4995 1.5001 1.5009 1.5014 CHF Floating Rate - - - CHF128.8 CHF225.4 CHF2,865.8 Average Interest Rate Swiss LIBOR Swiss LIBOR Swiss LIBOR plus 2.5% plus 2.5% plus 2.5% Average Forward Exchange Rate .6509 .6588 .6961 Interest Rate Derivative Financial Instruments Related to Long-term Debt: Interest Rate Swaps Notional CHF Amount CHF1,200.0 CHF1,200.0 CHF1,200.0 CHF1,200.0 - - Average Floor Strike Rate 3.27% 3.27% 3.27% 3.27% Average Cap Strike Rate 5.15% 5.15% 5.15% 5.15% Currency Swap Agreements Related to Long-term Debt: Receipt of U.S. Dollars Notional U.K. Pound Amount pound sterling 135.0 - - - - - Average Contract Rate 1.4765

~~Fair~~(On ~~Value~~January ~~Total 12/31/00 ----- -------- Long-term Debt Including Current Portion: U.S. dollars Fixed Rate $8~~10,~~266.0~~ $62003,~~087.1~~ ~~Average~~the ~~Interest~~name ~~Rate~~of ~~U.K.~~the ~~pound~~Registrant ~~Fixed~~was ~~Rate~~changed ~~pound~~from ~~sterling~~NTL ~~890.0~~Incorporated pound sterling 516.7 Average Interest Rate Average Forward Exchange Rate Euro Fixed Rate euro 810.0 euro 614.4 Average Interest Rate Average Forward Exchange Rate U.K. pound Floating Rate pound sterling 2,291.6 pound sterling 2,291.6 Average Interest Rate Average Forward Exchange Rate CHF Floating Rate CHF3,220.0 CHF3,220.0 Average Interest Rate Average Forward Exchange Rate Interest Rate Derivative Financial Instruments Related to ~~Long-term~~NTL ~~Debt: Interest Rate Swaps Notional CHF Amount CHF1~~Europe,~~200.0~~ ~~CHF(11~~Inc.0) (Exact ~~Average~~name ~~Floor Strike Rate Average Cap Strike Rate Currency Swap Agreements Related to Long-term Debt: Receipt~~ of ~~U.S.~~Registrant ~~Dollars~~as ~~Notional~~specified ~~U.K.~~in ~~Pound~~its ~~Amount pound sterling 135.0 pound sterling (1.5~~charter) ~~Average Contract Rate~~

(IN MILLIONS, EXCEPT PER SHARE DATA) 2000 --------------------------------------------------------------------- THREE MONTHS ENDED MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 -------- ------- ------------ ----------- Revenues $490.9 $666.3 $830.7 $852.9 Operating (loss) (191.1) (330.4) (525.8) (871.6) Net (loss) (397.7) (616.5) (770.3) (1,179.2) Basic and diluted net (loss) per common share (3.02) (3.57) (3.08) (4.57)


Delaware		13-4105887
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

37 Purchase Street, Rye, New York		10580
(Address of principal executive office)		(Zip Code)

1999 -------------------------------------------------------------------- THREE MONTHS ENDED -------------------------------------------------------------------- MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 -------- ------- ------------ ----------- (1914) ~~Revenues $313.4 $360.2 $417.1 $493.4 Operating~~ 921-1800 (~~loss)~~Registrant’s ~~(121.2)~~telephone ~~(168.9)~~number, ~~(151.6)~~including ~~(200.8)~~area ~~(Loss~~code) income before extraordinary item (230.4) (348.5) (278.1) 124.3 Net (loss) income (230.4) (348.5) (278.1) 121.3 Basic net (loss) income per common share before extraordinary item (2.44) (3.13) (2.31) .75 Basic net (loss) income per common share (2.44) (3.13) (2.31) .73 Diluted net (loss) income per common share before (2.44) (3.13) (2.31) .62 extraordinary item Diluted net (loss) income per common share (2.44) (3.13) (2.31) .60

~~DECEMBER~~Securities ~~31,~~registered ~~2000~~pursuant ~~1999~~to ~~---- ---- ASSETS Current assets: Cash and cash equivalents $ 579.4 $ 2,597.2 Marketable securities 60.0 344.5 Accounts receivable - trade, less allowance for doubtful accounts of $141.4~~ Section 12(~~2000~~b) ~~and $85.6 (1999) 729.1 294.2 Other 432.0 82.7 --------- --------- Total current assets 1,800.5 3,318.6 Fixed assets, net 12,693.0 5,597.7 Intangible assets, net 13,061.0 2,927.8 Other assets, net~~ of ~~accumulated~~the ~~amortization of $91.9 (2000) and $49.4 (1999) 829.2 367.5 --------- --------- Total assets $28,383.7 $12,211.6 ========= =========~~Act: None

~~DECEMBER~~Securities ~~31,~~registered ~~2000~~pursuant ~~1999~~to ~~----~~Section 12(g) ~~----~~of ~~LIABILITIES~~the ~~AND SHAREHOLDERS' EQUITY Current liabilities~~Act: Common ~~Accounts payable $ 506.3 $ 224.7 Accrued expenses and other 1~~Stock,~~280.6~~ 438.2 Accrued construction costs 196.9 79.8 Interest payable 151.3 71.1 Deferred revenue 492.8 160.8 Current portion of long-term debt 12.6 82.6 --------- --------- Total current liabilities 2,640.5 1,057.2 Long-term debt 15,044.1 8,798.0 Other 43.1 -- Commitments and contingent liabilities Deferred income taxes 205.4 77.7 Redeemable preferred stock - $.01 par value, ~~plus accreted dividends; liquidation preference~~ $~~2,085~~.7;01 ~~less~~per ~~unamortized~~share 10% ~~discount~~Fixed ofRedeemable ~~$2.5~~Preferred ~~(2000) and $2.8 (1999); issued and outstanding 2.0 (2000) and 0.1 (1999) shares 2~~Stock,~~083.2~~ ~~141.8 Shareholders' equity:~~ Series A, ~~preferred stock - $.01~~ par value; ~~authorized 10.0 shares; liquidation preference~~ $~~2,858~~.1;01 ~~issued~~per ~~and~~share Stockholder ~~outstanding~~Rights ~~2.9~~accompanying ~~(2000)~~each ~~and~~share ~~1.3~~of ~~(1999) shares -- --~~ Common stock - $.01 par value; authorized 800.0 shares; issued and outstanding 272.1 (2000) and 132.4 (1999) shares 2.7 1.3 Additional paid-in capital 13,764.7 4,125.1 Accumulated other comprehensive (loss) (448.9) (2.1) (Deficit) (4,951.1) (1,987.4) --------- --------- 8,367.4 2,136.9 --------- --------- Total liabilities and shareholders' equity $28,383.7 $12,211.6 ========= =========Stock

~~YEAR~~Indicate ~~ENDED~~by ~~DECEMBER~~check ~~31,~~mark ~~2000~~whether ~~1999~~the ~~1998~~Registrant REVENUES Consumer telecommunications and television $ 1,819.8 $ 834.3 $ 355.6 Business telecommunications 702.2 452.5 157.7 Broadcast transmission and other 318.8 297.3 231.3 Other telecommunications -- -- 2.4 --------- --------- --------- 2,840.8 1,584.1 747.0 COSTS AND EXPENSES Operating expenses 1,387.6 798.6 400.9 Selling, general and administrative expenses 1,109.1 574.6 270.7 Franchise fees -- 16.5 25.0 Other charges 92.7 16.2 (~~4.2) Corporate expenses 47.5 29.4 17.~~1 ~~Depreciation and amortization 2,122.8 791.3 266.1 --------- --------- --------- 4,759.7 2,226.6 975.6 --------- --------- --------- Operating (loss~~) has ~~(1,918.9)~~filed ~~(642.5)~~all ~~(228.6)~~reports required ~~OTHER~~to ~~INCOME~~be ~~(EXPENSE)~~filed ~~Interest~~by ~~income~~Section 13 ~~and~~or ~~other, net 1.6 49.4 46.0 Interest expense~~ 15(~~1,036.8~~d) ~~(680.7)~~of ~~(328.8)~~the ~~Other~~Securities ~~gains~~Exchange --Act ~~493.1~~of 1934 --during ~~Foreign~~the ~~currency~~preceding ~~transaction (losses) gains (120.6)~~ 12.7 months ~~4.2 --------- --------- ---------~~ (~~Loss)~~or ~~before~~for ~~income~~such ~~taxes~~shorter ~~and~~period ~~extraordinary~~that ~~item~~the Registrant ~~(3,074.7)~~was ~~(768.0)~~required ~~(507.2)~~to ~~Income~~file ~~tax~~such ~~benefit 111.0 35.3 3.3 --------- --------- --------- (Loss~~reports) ~~before extraordinary item (2~~,~~963.7)~~ ~~(732.7)~~and (~~503.9) Loss from early extinguishment of debt -- (3.0) (30.7) --------- --------- --------- Net (loss) (~~2~~,963.7~~) has ~~(735.7)~~been ~~(534.6)~~subject ~~Preferred stock dividends (194.0) (73.7) (18.8) --------- --------- --------- Net (loss) available~~ to ~~common~~such filing ~~shareholders~~requirements ~~$(3,157.7)~~for $the ~~(809.4)~~past ~~$ (553~~90 days.4) ~~=========~~YES þ ~~=========~~NO ========= Basic and diluted net (loss) per common share: (Loss) before extraordinary item $ (14.54) $ (6.75) $ (8.12) Extraordinary item -- (.03) (.48) --------- --------- --------- Net (loss) per common share $ (14.54) $ (6.78) $ (8.60) ========= ========= ========= Weighted average shares 217.1 119.4 64.4 ========= ========= =========o

~~SERIES~~Indicate ~~PREFERRED~~by ~~STOCK~~check ~~COMMON~~mark ~~STOCK~~if ~~$.01~~disclosure ~~PAR VALUE $.01 PAR VALUE SHARES PAR SHARES Par ------ --- ------ --- Balance, December 31, 1997 -- $ -- 32.2 $ 0.3 Exercise~~ of ~~stock~~delinquent ~~options~~filers ~~0.3~~pursuant --to ~~Exercise~~ Item 405 of ~~warrants 0.1 Accreted dividends on preferred stock Accretion of discount on preferred stock Conversion of 7~~Regulation S-~~1/4%~~K ~~Convertible~~is ~~Subordinated~~not ~~Notes~~contained 6.9 0.1 Conversion of series preferred stock -- 1.9 -- Preferred stock issued for an acquisition 0.2 -- Common stock issued for an acquisition 18.8 0.2 Warrants issued in connection with consent solicitations Comprehensive income: Net loss for the year ended December 31herein, ~~1998~~and ~~Currency~~will ~~translation~~not ~~adjustment~~be ~~Total --------------------------------------------- Balance~~contained, ~~December~~to ~~31,~~the best ~~1998 0.2 -- 60.2 0.6 Exercise~~ of stock options 1.8 -- Exercise of warrants 0.1 -- Common stock issued for cash 2.7 -- Preferred stock issued for cash 1.2 -- Warrants issued for cash Accreted dividends on preferred stock -- Accretion of discount on preferred stock Redemption of series preferred stock (0.1) -- Conversion of 7% Convertible Subordinated Notes 7.3 0.1 Common stock issued for an acquisition 12.7 0.1 Stock options issued in connection with an acquisition Issuance of warrants Stock splits 47.6 0.5 Comprehensive income: Net loss for the ~~year~~Registrant’s ~~ended December 31~~knowledge, ~~1999~~in ~~Currency~~definitive ~~translation~~proxy ~~adjustment~~or ~~---------------------------------------------~~information statements ~~Total~~Incorporated ~~Balance,~~by ~~December~~reference ~~31,~~in ~~1999~~Part ~~1.3~~III ~~-- 132.4 1.3 Exercise~~ of ~~stock~~this ~~options 2.3~~ Form 10--K ~~Rescission~~or ofany amendment ~~stock~~to ~~option~~this ~~exercises (0.2) Exercise of warrants 1.3~~ Form 10-~~- Common stock issued for cash 42~~K.2 0.4 Preferred stock issued for cash 2.0 -- Common stock issued for an acquisition 84.9 0.9 Conversion of series preferred stock (0.5) -- 9.2 0.1 Preferred stock issued for dividends -- Accreted dividends on preferred stock 0.1 -- Accretion of discount on preferred stock Comprehensive loss: Net loss for the year ended December 31, 2000 Currency translation adjustment Unrealized net losses on investments --------------------------------------------- Total Balance, December 31, 2000 2.9 $ -- 272.1 $ 2.7 =============================================o

~~ACCUMULATED~~Indicate ~~OTHER~~by ~~COMPREHENSIVE~~check ~~LOSS~~mark ~~---------------------------~~whether UNREALIZED ADDITIONAL FOREIGN NET PAID-IN COMPREHENSIVE CURRENCY LOSSES ON CAPITAL LOSS TRANSLATION INVESTMENTS (DEFICIT) ---------------------------------------------------------------------------- Balance, December 31, 1997 $538.1 $117.0 $(717.1) Exercise of stock options 6.3 Exercise of warrants 0.5 Accreted dividends on preferred stock (18.8) Accretion of discount on preferred stock (0.3) Conversion of 7-1/4% Convertible Subordinated Notes 186.9 Conversion of series preferred stock -- Preferred stock issued for an acquisition 178.5 Common stock issued for an acquisition 600.3 Warrants issued in connection with consent 10.1 solicitations Comprehensive income: Net loss for the ~~year~~registrant ~~ended~~is December 31, 1998 $(534.6) (534.6) Currency translation adjustment (12.3) (12.3) ------- Total $(546.9) ---------------------------------------------------------------------------- Balance, December 31, 1998 1,501.6 104.7 (1,251.7) Exercise of stock options 41.3 Exercise of warrants 0.8 Common stock issued for cash 250.0 Preferred stock issued for cash 1,233.8 Warrants issued for cash 16.2 Accreted dividends on preferred stock (44.1) Accretion of discount on preferred stock (0.3) Redemption of series preferred stock (125.3) Conversion of 7% Convertible Subordinated Notes 269.2 Common stock issued for an ~~acquisition~~accelerated ~~971.3~~filer ~~Stock~~as defined ~~options issued~~ in connection with an 6.6 acquisition Issuance of warrants 4.5 Stock splits (0.5) Comprehensive income: Net loss for the year ended December 31, 1999 $(735.7) (735.7) Currency translation adjustment (106.8) (106.8) Rule 12b-~~------ Total $(842.5) ---------------------------------------------------------------------------- Balance, December 31, 1999 4,125.1 (~~2~~.1)~~ ~~(1,987.4) Exercise~~ of stock options 36.3 Rescission of stock option exercises (1.1) Exercise of warrants 9.0 Common stock issued for cash 2,327.2 Preferred stock issued for cash 1,862.0 Common stock issued for an acquisition 5,487.4 Conversion of series preferred stock 7.5 Preferred stock issued for dividends 9.4 Accreted dividends on preferred stock (97.8) Accretion of discount on preferred stock (0.3) Comprehensive income: Net loss for the ~~year ended December 31, 2000 $(2,963~~Act.7) YES (2,963.7) Currency translation adjustment (432.6) (432.6) Unrealized net losses on investments (14.2) $(14.2) ---------------------------------------------------------------------------- Total $(3,410.5) ---------------------------------------------------------------------------- Balance, December 31, 2000 $13,764.7 $(434.7) $(14.2) $(4,951.1) ============================================================================o NOþ

~~YEAR~~On ~~ENDED~~January 10, ~~DECEMBER 31~~2003, ~~2000~~the ~~1999~~Company ~~1998~~consummated ~~----~~a ~~----~~plan ~~----~~of ~~OPERATING~~reorganization, ~~ACTIVITIES~~pursuant to ~~Net~~which ~~loss~~the ~~$(2~~Company,~~963.7)~~ $then ~~(735.7)~~known $as ~~(534.6)~~NTL ~~Adjustment~~Incorporated ~~to reconcile net loss to net cash~~ (~~used~~“Old inNTL”), ~~provided~~was byseparated into ~~operating~~two ~~activities:~~independent ~~Depreciation~~companies. ~~and~~Until ~~amortization 2~~then,~~122.8~~ ~~791.3~~Old ~~266.1~~NTL ~~Loss~~was ~~from~~one ~~early~~company ~~extinguishment~~with common ofstock ~~debt~~that --traded ~~3.0 30.7 Gain~~ on ~~sale~~the ofNew ~~investment~~York inStock ~~Cable~~Exchange ~~London~~until ~~PLC~~March 28, --2002, and ~~(493.1)~~then --on ~~Amortization~~the ofOTC ~~non~~Bulletin ~~competition agreements -- -- 1~~Board.4 ~~Provision~~Upon ~~for~~consummation ~~losses~~of onthe ~~accounts~~plan ~~receivable~~of reorganization, ~~98.9~~Old ~~46.2~~NTL’s ~~27.3~~securities, ~~Deferred~~including ~~income~~its ~~taxes~~common ~~(112.1)~~stock, ~~(37.3)~~were cancelled ~~(3.3)~~and ~~Amortization~~the ofCompany ~~original~~issued ~~issue~~new ~~discount~~common ~~473.4~~stock ~~451.4~~and ~~232.7~~preferred ~~Other (10~~stock.3) ~~(10.6)~~The Company’s ~~(30.9)~~new ~~Changes~~common instock ~~operating~~and ~~assets~~preferred ~~and~~stock ~~liabilities,~~initially ~~net~~traded ofon ~~effect~~the ~~from~~OTC ~~business~~Bulletin Board ~~acquisitions:~~under ~~Accounts~~the ~~receivable~~symbols ~~(366~~“NTEU.6)OB” ~~(139~~and “NTEP.4)OB,” ~~(70.4)~~respectively, ~~Other~~but, ~~current~~due ~~assets~~to ~~(69.5)~~the ~~(38.9)~~late ~~22.6~~filing ~~Other~~of this ~~assets 43.2 (25.2)~~ Form 10--K, ~~Accounts~~have ~~payable~~been ~~(83.7)~~changed ~~43.8~~to (2“NTEUE.6)PK” ~~Accrued expenses~~ and ~~other 379~~“NTEPE.3OB,” ~~126~~respectively.2 ~~15.3~~The ~~Deferred~~aggregate market ~~revenue~~value ~~186.4~~of ~~71.9~~the ~~26.8~~voting ~~---------~~and non-~~--------~~voting ~~---------~~common ~~Net~~equity ~~cash~~of ~~(used~~Old ~~in)~~NTL ~~provided~~held by non-affiliates ~~operating~~computed ~~activities~~by ~~(301.9)~~reference ~~53.6~~to ~~(18.9)~~the ~~INVESTING~~price ~~ACTIVITIES~~at ~~Acquisitions,~~which ~~net~~the ofcommon ~~cash~~equity was ~~acquired~~last ~~(10~~sold,~~940.0)~~ ~~(1,128.3)~~or ~~(746.8)~~the ~~Purchase~~average ofbid ~~fixed~~and ~~assets~~asked ~~(2,257.0)~~price ~~(1,211.3) (772.2) Payment~~ of ~~deferred~~such ~~purchase~~common ~~price~~equity, ~~(2.9)~~as --of June 28, --2002, ~~Increase~~was ~~in other assets (510.8) (59.~~$3~~) (35~~,630,377.6) ~~Proceeds~~Pursuant ~~from~~to ~~sales~~the ofreorganization ~~assets~~plan, --all ~~692.5~~of ~~1.3~~the common ~~Purchase~~equity of ~~marketable~~Old ~~securities~~NTL ~~(158.4)~~was ~~(747.4)~~cancelled ~~(540.6)~~and, ~~Proceeds~~therefore, ~~from~~this ~~sales~~amount ofis ~~marketable~~not indicative ~~securities~~of ~~452.6~~the ~~676.6~~current ~~291.3~~value ~~---------~~of ~~---------~~the ~~---------~~Company’s ~~Net~~common ~~cash (used in) investing activities (13,416~~stock.~~5) (1,777.2) (1,802.6)~~

~~YEAR~~Number ~~ENDED DECEMBER 31, 2000 1999 1998 ---- ---- ---- FINANCING ACTIVITIES Proceeds from borrowings, net~~ of ~~financing~~shares ~~costs~~outstanding 6,870.1 3,019.4 3,525.6 Proceeds from issuance of preferred stock and warrants 1,862.0 1,250.0 -- Proceeds from issuance of common stock 2,327.6 250.0 -- Redemption of preferred stock -- (125.3) -- Principal payments (1,303.0) (758.2) (845.0) Cash released from (placed in) escrow for debt repayment 77.5 (87.0) (217.6) Consent solicitation payments -- -- (11.3) Proceeds from issuance of redeemable preferred stock 1,850.0 -- -- Proceeds from exercise of stock options and warrants 44.2 42.1 6.8 --------- --------- --------- Net cash provided by financing activities 11,728.4 3,591.0 2,458.5 Effect of exchange rate changes on cash (27.8) (6.5) 0.4 --------- --------- --------- (Decrease) increase in cash and cash equivalents (2,017.8) 1,860.9 637.4 Cash and cash equivalents at ~~beginning of year 2~~May 21,~~597.2~~ 736.3 98.9 --------- --------- --------- Cash and cash equivalents at end of year $ 579.4 $ 2,597.2 $ 736.3 ========= ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for interest exclusive of amounts capitalized $ 495.0 $ 180.3 $ 90.5 Income taxes paid 6.7 2.4 0.3 SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES Accretion of dividends and discount on preferred stock $ 98.1 $ 44.4 $ 19.1 Conversion of Convertible Notes, net of unamortized deferred financing costs -- 269.3 187.0 Preferred stock issued for an acquisition -- -- 178.5 Common stock and stock options issued for acquisitions 5,488.3 978.0 600.5 Warrants issued in connection with consent solicitations -- -- 10.1 Conversion of series preferred stock 7.6 -- --2003:

~~DECEMBER 31~~19,657,433 ~~2000~~shares ~~1999~~of ~~---------------------------~~Common ~~(in~~Stock, ~~millions)~~par ~~Operating~~value ~~equipment~~ $~~11,753~~.201 $per ~~5,111.3~~share ~~Other equipment 1~~6,~~145.2~~862,193 ~~715.2~~shares ~~Construction-in-progress~~of ~~1,611.1~~10% ~~669.4~~Fixed ~~---------------------------~~Redeemable ~~14,509.5~~Preferred 6Stock,~~495.9~~ ~~Accumulated~~Series ~~depreciation (1~~A,~~816.5)~~ ~~(898.2)~~par ~~---------------------------~~value $~~12,693~~.001 $per ~~5,597.7 ===========================~~share

~~DECEMBER~~Indicate ~~31,~~by ~~2000~~check ~~1999~~mark ~~----~~whether ~~----~~the ~~(in~~registrant ~~millions)~~has ~~Goodwill,~~filed ~~net~~all ofdocuments ~~accumulated~~and reports ~~amortization~~required ofto ~~$1,103.6~~be ~~(2000)~~filed ~~and~~by ~~$193.8 (1999) $~~Section 12,~~523.0~~ $13 ~~2,477.1~~or ~~License acquisition costs, net of accumulated amortization of $215.8~~ 15(~~2000~~d) ~~and~~of ~~$141.7~~the ~~(1999)~~Securities Exchange ~~139.2~~Act ~~225.0 Customer lists, net~~ of ~~accumulated~~1934 ~~amortization~~subsequent ofto ~~$110.7~~the ~~(2000)~~distribution ~~and $30.9 (1999) 318.2 159.3 Other intangibles, net~~ of ~~accumulated~~securities ~~amortization~~under ofa ~~$13.8~~plan by ~~(2000)~~a ~~and $3~~court.2 YES ~~(1999)~~o ~~80.6 66.4 -------------------------- $13,061.0 $ 2,927.8 ==========================~~NO þ

~~YEAR~~Documents ~~ENDED~~Incorporated ~~DECEMBER~~by 31, 2000 1999 ---- ---- (in millions, except per share data) Total revenue $ 3,403.3 $ 3,295.8 (Loss) before extraordinary item (3,653.1) (2,803.1) Net (loss) (3,653.1) (2,806.1) Basic and diluted net loss per shareReference: ~~(Loss) before extraordinary item (14.53) (12.46) Net (loss) (14.53) (12.47)~~None

~~DECEMBER~~TABLE ~~31,~~OF 2000 1999 ---- ---- (in millions) NTL Delaware: 5-3/4% Convertible Subordinated Notes (a) $ 1,200.0 $ 1,200.0 ConsumerCo: Term Loan Facility and other 21.7 -- NTL Business: Credit Agreement (w) 3,030.3 -- Cablecom: Term Loan Facility (x) 1,666.4 -- Revolving Facility (x) 320.9 -- Other 15.3 -- NTL Communications: 12-3/4% Senior Deferred Coupon Notes (b) 277.8 268.1 11-1/2% Senior Deferred Coupon Notes (c) 1,040.5 930.4 10% Senior Notes (d) 400.0 400.0 9-1/2% Senior Sterling Notes, less unamortized discount (e) 186.5 201.4 10-3/4% Senior Deferred Coupon Sterling Notes (f) 353.6 343.7 9-3/4% Senior Deferred Coupon Notes (g) 1,048.5 952.8 9-3/4% Senior Deferred Coupon Sterling Notes (h) 360.8 354.4 11-1/2% Senior Notes (i) 625.0 625.0 12-3/8% Senior Deferred Coupon Notes (j) 323.6 287.0 7% Convertible Subordinated Notes (k) 599.3 599.3 Variable Rate Redeemable Guaranteed Loan Notes (l) -- 76.8 9-1/4% Senior Euro Notes (m) 234.7 252.3 9-7/8% Senior Euro Notes (n) 328.6 353.2 11-1/2% Senior Deferred Coupon Euro Notes (o) 127.9 123.1 11-7/8% Senior Notes, less unamortized discount (p) 489.6 -- NTL Communications Limited: Credit Agreement (w) 375.3 -- NTL Triangle: 11.2% Senior Discount Debentures (q) 517.3 467.3 Other 5.2 8.0 Diamond: 13-1/4% Senior Discount Notes (r) 285.1 285.1 11-3/4% Senior Discount Notes (s) 531.0 476.2 10-3/4% Senior Discount Notes (t) 373.9 336.9 10% Senior Sterling Notes (u) 201.9 218.1 9-1/8% Senior Notes (v) 110.0 110.0 Other 6.0 11.5 -------------------------- 15,056.7 8,880.6 Less current portion 12.6 82.6 -------------------------- $15,044.1 $ 8,798.0 ==========================CONTENTS

Year ending December 31: 2001 $12.6 2002 10.8 2003 8.4 2004 500.3 2005 4,219.9 Thereafter 11,046.8 --------- $15,798.8 =========


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

13%Table 5%of ---------------------------- Balance, December 31, 1997 110,000 - Issued for dividends 15,000 - ---------------------------- Balance, December 31, 1998 125,000 - Issued for dividends 17,000 - ---------------------------- Balance, December 31, 1999 142,000 - Issued for cash - 1,850,000 Issued for dividends 20,000 - ---------------------------- Balance, December 31, 2000 162,000 1,850,000 ============================Contents

~~YEAR~~NTL ~~ENDED DECEMBER 31~~EUROPE, ~~2000 1999 1998 --------- --------- --------- (in millions) Current: Federal $ -- $ 1~~INC.0 FORM $ 10--K December 31, ~~State~~2002 TABLE ~~and~~OF local 0.2 1.0 -- Foreign 0.9 -- -- ---------------------------------------- Total current 1.1 2.0 -- ---------------------------------------- Deferred: Federal -- -- -- State and local -- -- -- Foreign (112.1) (37.3) (3.3) ---------------------------------------- Total deferred (112.1) (37.3) (3.3) ---------------------------------------- $(111.0) $ (35.3) $ (3.3) ========================================CONTENTS

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


		Page

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

~~YEAR ENDED DECEMBER 31, 2000 1999 1998~~ -~~--- ---- ---- (in millions) (Benefit) at federal statutory rate (35%) $(1,076.1) $ (269.9) $ (188.3) Add: Foreign losses with no benefit 815.7 110.~~2 ~~87.9 U.S. losses with no benefit 149.3 123.7 97.1 State and local income tax, net of federal benefit 0.1 0.7~~ -~~- ------------------------------------------ $ (111.0) $ (35.3) $ (3.3) ==========================================~~

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

~~Convertible~~PART 9.9% 9.9% Series A Series A Series B 5.25% 5% -------------------------------------------------------------------------------- Balance, December 31, 1997 780 -- -- -- -- Conversion into common stock (780) -- -- -- -- Issued for acquisitions -- 125,000 52,000 -- -- -------------------------------------------------------------------------------- Balance, December 31, 1998 -- 125,000 52,000 -- -- Issued for cash -- -- -- 500,000 750,000 Issued for dividends -- -- -- 25,000 5,000 Redemption -- (125,000) -- -- -- -------------------------------------------------------------------------------- Balance, December 31, 1999 -- -- 52,000 525,000 755,000 Issued for cash -- -- -- -- 2,000,000 Issued for dividends -- -- -- 3,000 103,000 Conversion into common stock -- -- (52,000) (528,000) -- -------------------------------------------------------------------------------- Balance, December 31, 2000 -- -- -- -- 2,858,000 ================================================================================I

~~YEAR~~ In ~~ENDED~~this ~~DECEMBER~~Form 10-K, 31references to “£,” ~~2000~~“(pound ~~1999~~sterling),” ~~1998~~“(pound),” “pence” ~~----~~or ~~----~~“p” ~~----~~are ~~(in~~to ~~millions,~~the ~~except~~lawful ~~per~~currency ~~share~~of ~~data)~~the ~~Pro~~United ~~forma~~Kingdom, ~~net~~references to “€,” “(~~loss~~euro)” ~~$(3~~or “Euro” are to the lawful currency of the European Monetary Union,~~220~~ references to “CHF” or “Swiss Franc” are to the lawful currency of Switzerland and references to “U.3)S. dollars,” “dollars,” “$” or “(~~822.7~~cent)” ~~$(580~~are to the lawful currency of the United States.7) ~~Basic~~As ~~and~~of ~~diluted~~December 31, ~~pro~~2002, ~~forma~~the ~~net~~noon buying ~~(loss)~~rate ~~per~~in ~~share~~New York for cable transfers in the following foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York were $~~(15~~1.736095 per UK (pound) 1.00, $1.0485 per (~~7.51~~euro) 1.00 and $0.7229 (9per Swiss Franc 1.~~31)~~00. You should not construe these exchange rates as representations that the foreign currency amounts actually represent such U.S. dollar amounts or vice versa or could have been or could be or will be converted into U.S. dollars or foreign currencies, as the case may be, at the rate indicated or at any other rate.

2000 1999 1998 ------------------------------------------------------------------------------------------------ NUMBER OF WEIGHTED-AVERAGE NUMBER OF WEIGHTED-AVERAGE NUMBER OF WEIGHTED-AVERAGE OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE ------------------------------------------------------------------------------------------------ (in millions) (in millions) (in millions) Outstanding-beginning of year 29.2 $24.60 25.7 $17.29 12.7 $10.23 Granted 34.8 54.90 6.4 50.35 13.9 24.06 Exercised (2.Item 1~~) 17~~.13 (2.6) 15.95 (0.5) 13.59 Forfeited (0.5) 83.31 (0.3) 24.22 (0.4) 29.74 ----- ----- ----- Outstanding-end of year 61.4 $41.52 29.2 $24.60 25.7 $17.29 ===== ===== ===== Exercisable at end of year 16.3 $21.82 12.2 $14.97 11.0 $10.59 ===== ===== =====Business

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

~~YEAR~~ On ~~ENDED~~May 8, ~~DECEMBER 31~~2002, ~~2000~~the ~~1999~~entity ~~----~~then ~~----~~known ~~(in~~as ~~millions)~~NTL ~~CHANGE~~Incorporated ~~IN BENEFIT OBLIGATION Benefit obligation at beginning of year $ 197.1 $ 213.4 Acquisition 116.9 10.7 Service cost 16.7 12.0 Interest cost 16.8 12.0 Actuarial gains~~ (~~3.4)~~referred ~~(40.9)~~to herein ~~Benefits~~as ~~paid~~“Old ~~(8.3~~NTL”) ~~(5.2)~~and ~~Foreign~~certain ~~currency exchange rate changes (11.7) (4.9) ------------------------ Benefit obligation at end~~ of ~~year~~its $subsidiaries ~~324.1 $ 197.1 ======================== CHANGE IN PLAN ASSETS Fair value of plan assets~~ at ~~beginning~~that oftime, ~~year~~namely, $NTL (Delaware), ~~278~~Inc.4, $NTL ~~225.3~~Communications ~~Acquisition 133~~Corp.2, ~~10.1~~Diamond ~~Actual~~Cable ~~return~~Communications Limited, onDiamond ~~plan~~Holdings ~~assets~~Limited ~~15.8~~and ~~43.1~~Communications ~~Company~~Cable ~~contributions~~Funding 12Corp.5, ~~7.6~~each filed ~~Plan~~a ~~participants'~~voluntary ~~contributions~~petition ~~6.2~~for ~~2.9~~a ~~Benefits~~“prearranged” ~~paid~~joint ~~(8.3) (5.3) Foreign currency exchange rate changes (17.6) (5.3) ------------------------ Fair value of~~ plan ~~assets at end~~ of ~~year~~reorganization under $Chapter 11 ~~420.2 $ 278.4 ======================== Funded status~~ of the ~~plan~~United $States ~~96.1~~Bankruptcy $Code ~~81.3~~to ~~Unrecognized~~convert ~~net actuarial gains (79.2) (89.3) Unrecognized transition obligation 6.2 8.1 ------------------------ Prepaid benefit cost~~ approximately $ 2310.~~1 $ 0.1 ======================== Actuarial assumptions: Weighted average discount rate 4.50% -~~ 6~~.00%~~ billion ~~6.25% Weighted average rate~~ of ~~compensation~~debt ~~increase~~into ~~2.00%~~equity ~~- 4.25% 4.50% Expected long-term rate~~ of ~~return~~two onseparate ~~plan assets 5~~companies.~~50% - 7.75% 8.00%~~

~~YEAR~~ The ~~ENDED~~filings ~~DECEMBER~~were 31made on May 8, ~~2000~~2002 ~~1999~~in ~~1998~~the ~~----~~United ~~----~~States ~~----~~Bankruptcy ~~(in~~Court for ~~millions)~~the ~~Service~~Southern ~~cost~~District $of ~~16.7~~New $York ~~12.0~~located $in ~~13.4~~New ~~Interest~~York, ~~cost~~New 16York.8 ~~12.0~~On ~~14.7~~May 24, ~~Actual~~2002, ~~return~~the ondebtors filed a disclosure statement and an amended joint reorganization plan ~~assets~~with ~~(15.7)~~the ~~(43.1)~~bankruptcy ~~(24~~court.2) ~~Net~~On ~~amortization~~July 15, 2002, the debtors filed an amended disclosure statement and ~~deferral~~a ~~(19.4)~~second ~~26.8~~amended 8joint reorganization plan with the bankruptcy court.3 ~~---------------------------------------~~On $September 5, 2002, the bankruptcy court entered an order confirming the Second Amended Joint Reorganization Plan of Old NTL and certain subsidiaries, filed on July 15, 2002 (~~1.6)~~as $modified ~~7.7~~and $confirmed on ~~12.2~~September 5, ~~=======================================~~2002).

~~Year~~ The ~~ending~~reorganization ~~December~~plan ~~31:~~became ~~2001~~effective ~~$65~~on January 10, 2003, at which time, pursuant to the reorganization plan, Old NTL was reorganized into two separate companies—the corporation previously named “NTL Incorporated” and the corporation previously known as “NTL Communications Corp.5” ~~2002~~We 61are the entity formerly known as “NTL Incorporated” having been renamed “NTL Europe, Inc.1” Following ~~2003~~the 58consummation of the reorganization plan, we became the holding company for substantially all of Old NTL’s businesses and investments in Europe, as well as certain other investments and interests.3 ~~2004~~NTL 52Communications Corp.0 ~~2005~~was 47renamed “NTL Incorporated” and is the holding company for substantially all of Old NTL’s businesses and operations in the United Kingdom and Ireland (referred to herein as “New NTL”).1 ~~Thereafter~~New ~~225~~NTL is an independent entity which is no longer owned by or affiliated with us.2 ~~------~~However, ~~$509~~because the reorganization was consummated after the end of the fiscal year ended December 31, 2002 at which time NTL Communications Corp.2 ~~======~~was a subsidiary of Old NTL, under applicable reporting requirements, certain information concerning Old NTL and NTL Communications Corp. and its subsidiaries are required to be included in this Form 10-K and the financial statements which are a part hereof.

~~BROADCAST~~ We ~~CONSUMER~~are ~~BUSINESS~~incorporated ~~SHARED~~under ~~TOTAL~~the ~~---------~~laws ~~--------~~of ~~--------~~the ~~------~~State ~~-----~~of ~~(in millions) YEAR ENDED DECEMBER 31, 2000 Revenues $318~~Delaware.8 ~~$1,819.8~~We ~~$702.2~~were originally $incorporated --on $2,840.8 Depreciation and amortization 81.4 1,455.7 153.0 432.7 2,122.8 EBITDA (1) 151.9 447.6 226.2 (481.6) 344.1 Expenditures for long-lived assets 91.5 1,469.4 637.8 732.3 2,931.0 Total assets (2) 1,051.1 22,339.8 1,525.5 3,467.3 28,383.7 YEAR ENDED DECEMBER December 31, 1999 ~~Revenues $297~~.3 ~~$834.3~~Through ~~$452.5~~February ~~$- $1~~1999,~~584.1~~ ~~Depreciation~~NTL Communications ~~and amortization 69~~Corp.~~8 528.3 58.8 134.4 791.3 EBITDA (1) 150.1 233.5 106.6 (279.3) 210.9 Expenditures for long-lived assets 74.5 591.3 356.7 131.8 1~~,~~154.3~~ ~~Total~~then ~~assets~~known ~~(3)~~as 1,127.6 6,106.5 805.9 4,171.6 12,211.6 YEAR ENDED DECEMBER 31, 1998 Revenues $231.3 $355.6 $157.7 $2.4 $747.0 Depreciation and amortization 41.7 143.5 17.8 63.1 266.1 EBITDA (1) 115.2 67.6 12.3 (119.7) 75.4 Expenditures for long-lived assets 165.9 413.9 220.4 67.1 867.3 Total assets 645.8 3,100.5 406.1 2,041.7 6,194.1“NTL

~~YEAR ENDED DECEMBER 31, 2000 1999 1998~~ ---- ---- ---- (in millions) Segment Combined EBITDA $ 344.1 $ 210.9 $ 75.4 (Add) Deduct: Franchise fees -- 16.5 25.0 Other charges 92.7 16.2 (4.2) Corporate expenses 47.5 29.4 17.1 Depreciation and amortization 2,122.8 791.3 ~~266.1 Interest income and other, net (1.6) (49.4) (46.0) Interest expense 1,036.8 680.7 328.8 Other gains~~ -- (493.1) -- Foreign currency transaction losses (gains) 120.6 (12.7) (4.2) ------------------------------------------- 3,418.8 978.9 582.6 ------------------------------------------ Loss before income taxes and extraordinary item $(3,074.7) $ (768.0) $ (507.2) ===========================================

UnitedTable Statesof United Kingdom Switzerland Other Total ------------- -------------- ----------- ----- ----- (in millions) 2000 Revenues $ -- $ 2,434.8 $ 277.3 $ 128.7 $ 2,840.8 Long-lived assets 26.7 21,751.7 3,839.8 965.0 26,583.2 1999 Revenues $ -- $ 1,508.2 $ -- $ 75.9 $ 1,584.1 Long-lived assets 1.6 8,227.6 -- 663.8 8,893.0 1998 Revenues $ 2.4 $ 744.6 $ -- $ -- $ 747.0 Long-lived assets 1.2 4,988.4 -- -- 4,989.6Contents

~~COL.~~Incorporated,” Awas ~~COL.~~the Bholding ~~COL~~company for all of Old NTL’s businesses. CAt that ~~COL~~time, a new holding company was created and assumed the name “NTL Incorporated” and the former holding company was renamed “NTL Communications Corp.” DIn ~~COL~~May 2000, a new holding company structure was implemented in connection with the acquisition of Cable & Wireless Communications plc. EThe new ~~---------------------------------------------------------------------------------------------------------------------------------~~holding ~~ADDITIONS~~company ~~(1)~~assumed ~~(2)~~the ~~BALANCE~~name AT“NTL ~~CHARGED~~Incorporated” TOand ~~CHARGED~~the TOformer holding company was renamed “NTL (~~DEDUCTIONS~~Delaware)/, ~~BALANCE~~Inc.,” ~~BEGINNING~~its OFcurrent ~~COSTS~~name. ~~OTHER~~On ~~ADDITIONS~~the ATeffective date ~~END~~of ~~DESCRIPTION~~the ~~PERIOD~~reorganization ~~AND~~plan, ~~ACCOUNTS~~we --filed ~~DESCRIBE~~an OFamended ~~PERIOD~~charter ~~EXPENSES~~which ~~DESCRIBE~~authorized, among ~~Year~~other ~~ended~~things, ~~December~~the ~~31,~~change ~~2000~~of ~~Allowance~~our ~~for~~name ~~doubtful~~to ~~accounts~~NTL ~~$85~~Europe, Inc.6 In addition, on the effective date of and pursuant to the reorganization plan, all previously outstanding public debt, equity securities and stock options of Old NTL were cancelled and we authorized the issuance of 19,668,777 shares of common stock, par value $980.901 $per -share, $(~~43.1~~19,657,433 of which were outstanding as of May 21, 2003)~~(a)~~ ~~$141.4~~together ~~====================================================================================~~with ~~Year~~associated ~~ended~~preferred ~~December~~stock 31purchase rights, ~~1999~~and ~~Allowance~~7,364,000 shares ~~for~~of ~~doubtful~~10% ~~accounts~~Fixed ~~$38.5~~Coupon ~~$46.2~~Redeemable $Preferred -Stock, Series A, par value $0.901 per share (b)with a $8550.00 liquidation preference per share) (the “Preferred Stock”) (6,862,193 ~~====================================================================================~~of ~~Year~~which ~~ended~~were ~~December~~outstanding 31as of May 21, ~~1998~~2003). In ~~Allowance~~accordance with the reorganization plan, our board of directors has reserved 2,000,000 shares of our common stock for ~~doubtful~~issuance ~~accounts~~upon ~~$8.1~~exercise ~~$27.3~~of $the management -incentive ~~$3.1~~options ~~(c)~~authorized ~~$38~~for grant under our management incentive plan.5 ~~====================================================================================~~However, we have not issued, and we currently have no plans to issue, any options under our 2003 Stock Option Plan.

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

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

Our Business

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

	•		NTL Premium TV Holdings Corp., our sports TV and internet content business

	•		Cablecom GmbH, our cable business in Switzerland, ownership of most of which we are unlikely to retain (See “Recent Developments – Cablecom GmbH”)

	•		NTL Lanbase, SL, our LAN/WAN installation business located in Madrid, Spain

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•

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

We currently have minority interests in the following operating entities:

	•		Two Way TV Limited, an interactive television service provider

	•		Global Radio Participations SA, a European digital radio license holder

	•		ITV News Channel Limited, a 24-hour news channel located in the U.K.

	•		B2 (Bredband) AG, a Swedish broadband communications company, but, as described more fully in this Form 10-K, NTL Delaware entered into a settlement agreement on April 30, 2003, pursuant to which, among other things, our interest in B2 will be transferred in the near future

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

Recent Developments

Cablecom GmbH

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

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

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

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

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

B2 Bredband AB

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

iesy Hessen GmbH

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

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

Cablecom GmbH

Introduction

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

Cablecom Business Overview

Cablecom is Switzerland’s largest cable operator with approximately 54% of the Swiss cable television market as of December 31, 2002. Cablecom currently operates in the following three business areas: (1) Cable Networks. Residential cable television is Cablecom’s largest business and comprises 28 different cable networks of which six are wholly-owned by Cablecom. This accounts for approximately 91% of total subscribers. As of December 31, 2002, Cablecom had a penetration rate of over 91% of homes passed, 82% of the network is upgraded and over 1.1 million homes are bi-directional. Approximately 72,000 digital television customers and 135,000 broadband internet subscribers were connected as of December 31, 2002. Furthermore, Cablecom had approximately 100,000 dial up internet subscribers at that time. Approximately 82% of Cablecom’s subscribers are in the German speaking region of Switzerland, 10% in the French speaking region and the remainder in the Italian and Romansch speaking regions.

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

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

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

	(1)		Fiber optic backbone;

	(2)		Hybrid-fiber coaxial or “HFC” network; and

	(3)		In-house installations.

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

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

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

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

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

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

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

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

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Competition for Cablecom in Switzerland

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

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

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

Cablecom credit facility and Cablecom credit facility amendment

Introduction

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

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and do not expect to receive any liquid assets or other contribution to the funding of our operating expenses or the operating expenses of our subsidiaries through our current or, if any, future ownership in Cablecom. See Risk Factors Relating to Cablecom and Risk Factors Relating to our Company and our Securities.

Swiss Regulation Affecting Cablecom

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

(1)

Telecommunications Act.

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

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

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

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

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

In 2001, the Swiss Supreme Court ruled that, despite Swisscom’s market power, there are no legal grounds to require Swisscom to grant interconnection for rented lines and “transmission media,”

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

(2)

Radio and Television Act.

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

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

Cablecom Regulatory Matters and Litigation

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

Agreement with the Swiss Price Regulator

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

Litigation With Teleclub

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

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

NTL Premium TV Holdings Corp.

Overview

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

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

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

The demand for Premium TV’s internet services has been growing since its inception in 1999. Demand is driven by the popularity of football in the United Kingdom, the growth of broadband internet services in the UK, and improvements in internet services and features, particularly the advances in video

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streaming technology. As of December 31, 2002, Premium TV had over one million registered users for its internet sites and approximately 24,000 subscribers for its broadband premium services. Premium TV’s revenue for 2002 and 2001 was $28.4 million and $40.6 million, respectively.

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

Competition

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

Modification with the Football League

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

Settlement with NTL Broadcast

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

NTL Lanbase, SL

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

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NTL Asia

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

Minority Interests

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

Two Way TV Limited

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

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

Global Radio Participations SA

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

ITV News Channel Limited

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

B2 Bredband AB

B2 is a broadband communications company providing 10 Mb/s network access and broadband services to residential and small-to-medium business customers in Sweden. B2 provides “always on”, low-cost access to a high-capacity broadband network that provides transmission both to and from the

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

Employees

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

Management and Corporate Governance

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

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

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

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

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

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

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

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

Additional Risk Factors

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

Risk Factors relating to our Company and our Securities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our guaranty obligations could reduce our cash position.

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

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

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

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

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

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

Our charter and bylaws contain provisions which may have the effect, alone or in combination with each other or with the existence of authorized but unissued common stock and preferred stock, of preventing or making more difficult transactions involving a change of control of our company. In

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addition, our rights agreement may have a significant anti-takeover effect. The rights agreement has the potential to significantly dilute the ownership interests of an acquiror of shares of our common stock, and therefore may have the effect of delaying, deterring, or preventing a change in control of us.

Risk Factors Relating to Cablecom

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

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

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

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

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

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

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

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

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

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

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

Risk Factors Relating to Our Investment in Premium TV

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

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

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

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

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

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

Risk Factors Relating to NTL Asia

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

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

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

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

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

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

Such factors include, among others, those set forth in this section under the caption “Risk Factors” as well as: our ability and the ability of our subsidiaries and affiliated joint ventures to continue as going concerns; the ability to obtain trade credit and shipments and terms with vendors and service providers for current orders; our ability to maintain contracts that are critical to their respective

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

Where You Can Find More Information

We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file at the SEC’s public reference room in Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. In addition, our filings are available on our website at http://www.ntleurope.com.

Item 2. Properties

Our executive office is located in Rye, New York under a lease at a current annual rental expense of $9,480. In addition, we use office space in London, England leased by one of our subsidiaries.

In Switzerland, Cablecom owns or leases a total of 32 office locations. In addition, in Switzerland, Cablecom owns or leases approximately 450 network sites and 21 warehouse locations and other nonoperational properties, as well as various cable television, telephone and telecommunications equipment housed on public and private sites.

Premium TV has an agreement with New NTL to use facilities in Feltham, England which house its internet platform equipment and administrative offices. Pursuant to the agreement with New NTL, Premium TV does not pay for the use of this space.

We believe that our facilities are well maintained and adequate to meet our needs in the foreseeable future.

Item 3. Legal Proceedings

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

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

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

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

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

On May 1, 2003, Owl Creek Asset Management, L.P., one of Old NTL’s creditors, filed an amended complaint against CRT Capital Group LLC, New NTL and us in U.S. Bankruptcy Court for the Southern District of New York. The amended complaint concerns certain “when-issued” trades of New NTL’s common stock made by Owl Creek with CRT prior to a subsequent modification of Old NTL’s plan of reorganization. Under the modified plan, Old NTL’s creditors were entitled to receive only one-fourth the number of shares of New NTL common stock contemplated prior to the modification. Therefore, certain holders of New NTL common stock sold more stock on the “when-issued” market than they ultimately received under the amended plan. On January 16, 2003, the bankruptcy court entered an order providing that sellers of New NTL’s common stock on the “when-issued” market may settle such trades by reducing the number of shares traded in each such transaction by 25% and increasing the per share purchase price for such shares by 400%. The order provided that buyers in such trades were required to accept such a settlement, but the order was dissolved on February 5, 2003. In addition to its

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claims against CRT, Owl Creek has asserted claims against New NTL and us for breach of fiduciary duty, gross negligence, breach of contract, promissory estoppel, contribution and indemnification, alleging that Old NTL’s creditors should have been better informed of the changes to New NTL’s common stock under the plan. Since the securities that are the subject of the complaint are those of New NTL, we do not believe we have any material exposure with respect to this claim.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of our security holders through the solicitation of proxies or otherwise during the fourth quarter ended December 31, 2002.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

(a)

Market Information

Until the consummation of the reorganization plan on January 10, 2003, Old NTL’s common stock traded during 2001 and until March 26, 2002 on the New York Stock Exchange and then on the OTC Bulletin Board. Following consummation of the reorganization plan, Old NTL’s securities, including its common stock, were cancelled and we issued new common stock and Preferred Stock. Our common stock and Preferred Stock, both of which were first issued on January 10, 2003, initially traded on the OTC Bulletin Board under the symbols “NTEU.OB” and “NTEP.OB”, respectively, but, due to the late filing of this Form 10-K, have been changed to “NTEUE.PK” and “NTEPE.OB,” respectively.

In accordance with applicable reporting requirements, the quotations below reflect the high and low closing sales prices for the common stock of Old NTL since January 1, 2001 as traded on the New York Stock Exchange and, as of March 26, 2002, on the OTC Bulletin Board. The OTC Bulletin Board quotations below reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Pursuant to the reorganization plan, all of Old NTL’s common stock was cancelled. As a result, the following stock prices do not relate to the value of our common stock in any way.


	Old NTL Common Stock

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

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(b)

Holders

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

(c)

Dividends

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

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

(d)

Securities authorized for issuance under equity compensation plans

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

(e)

Sales of unregistered securities

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

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

Item 6. Selected Financial Data

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

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

On January 10, 2003, the company then known as NTL Incorporated emerged from bankruptcy protection and consummated its reorganization plan. Through this reorganization plan, Old NTL was

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separated into two independent companies, effective January 10, 2003. One company, which assumed the name “NTL Incorporated,” holds substantially all of Old NTL’s assets in the United Kingdom and Ireland. Our company, which assumed the name “NTL Europe, Inc.,” is the other entity that was created and we hold various assets in Europe and elsewhere. New NTL is an independent entity which is no longer owned by or affiliated with us. New NTL has been accounted for as a discontinued operation beginning with the quarter ended September 30, 2002 and, accordingly, it is excluded from assets and liabilities of continuing operations and from results of continuing operations for the five years ended December 31, 2002.

Our financial statements include amounts prior to January 10, 2003 that have been derived from the financial statements and accounting records of Old NTL using the historical results of operations and historical basis of the assets and liabilities of our businesses, including Cablecom. However, as described elsewhere in this Form 10-K, we anticipate that, in the near future, the results of Cablecom will no longer be reported as part of our consolidated results of operations since we will hold little, if any, equity in Cablecom after its restructuring or filing for insolvency proceedings. Therefore, the historical financial statements of Old NTL for periods prior to January 10, 2003 are not particularly meaningful to our current and anticipated future business and should not be relied upon as indicative of our future performance.


					Years ended December 31,

Income Statement Data		2002 (1)			2001 (2)			2000 (3)			1999 (4)			1998 (5)

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


	At December 31,

Balance Sheet Data	2002 (1)			2001 (2)			2000 (3)		1999 (4)		1998 (5)

				(dollars in millions)
Working capital (deficiency)	$	(7,539.8	)	$	(6,485.0	)	$	9,611.3	$	3,101.8	$	—
Fixed assets, net		1,682.1			1,494.0			1,568.5		8.9		—
Total assets		15,849.4			16,858.9			28,779.8		12,445.3		6,194.1
Long-term debt		—			—			3,200.8		1,200.0		—
Redeemable preferred stock		—			2,773.7			2,083.2		141.8		124.1
Shareholders’ equity (deficiency)		(9,899.8	)		(6,542.4	)		8,367.4		2,136.9		355.2

(1)

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

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		contractual interest for the period from May 8, 2002 to December 31, 2002. Also in 2002, recapitalization items, net were $4.8 million. Recapitalization items include all transactions incurred as a result of our Chapter 11 reorganization. Recapitalization items, net include $0.1 million for employee retention and $6.9 million for financial advisory, legal, accounting and consulting costs. These costs are net of $2.2 million of interest earned on accumulated cash since the Chapter 11 filing on May 8, 2002.

		In addition, in 2002, Old NTL recorded asset impairment charges of $854.3 million consisting of non-cash charges to write-down goodwill. Amortization expense in 2002 decreased from amounts in prior periods due to the adoption of Statement of Financial Accounting Standards (referred to as SFAS) No. 142 on January 1, 2002 which ended the amortization of goodwill and other indefinite lived intangible assets.

		The working capital deficiency in 2002 is primarily the result of (a) the liabilities for discontinued operations exceeding their related net assets by $4,988.1 million and (b) the classification of $2,719.3 million outstanding debt as a component of current liabilities. Long-term debt and redeemable preferred stock at December 31, 2002 exclude $1,300 million and $2,853 million, respectively, that is included in liabilities subject to compromise.

(2)		Old NTL’s operating loss in 2001 includes asset impairment charges of $912.1 million for non-cash charges associated with the write-down of Cablecom goodwill and various long-term assets at Premium TV. The loss from discontinued operations, for the twelve months ended December 31, 2001, includes asset impairment charges of $8,160.6 million.

		The working capital deficiency in 2001 is primary the result of (a) the liabilities for discontinued operations exceeding their related net assets by $3,095.2 million and (b) the reclassification of all outstanding debt ($3,460.2 million) as a component of current liabilities.

(3)		The increase in revenues in 2000 over the prior year primarily reflects the effects of the acquisition of the Cablecom group on March 28, 2000. The increase in the operating loss and loss from continuing operations, for 2000 over the prior year, was primarily the result of the Cablecom acquisition and reflects the costs of the amortization of various intangible assets, including customer lists and license acquisition costs, as well as the effect of higher interest expense associated with the acquisition.

		The working capital position in 2000 is primarily the result of the net assets for discontinued operations exceeding their related liabilities by $9,128.3 million.

(4)		Revenues in 1999 reflect Old NTL’s operations, primarily in the United Kingdom and France, which began during that year. The positive working capital position at December 31, 1999 is the result of (a) the net assets for discontinued operations exceeding their related liabilities by $1,155.0 million and (b) Old NTL’s cash, cash equivalents and marketable securities totaling $1,851.1 million, which was unusually high, a result, in part, of the net proceeds from the issuance in December 1999 of an aggregate of $1,200 million of 53/4% convertible notes in anticipation of the pending acquisition of Cable & Wireless, an acquisition which was completed in May 2000.

(5)		All of Old NTL’s activity in 1998 related to its discontinued operations.

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

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

Overview

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

•		NTL Premium TV Holdings Corp., our sports TV content and internet business

•		Cablecom GmbH, our cable business in Switzerland, ownership of most of which we are unlikely to retain (See “Recent Developments – Cablecom GmbH”)

•		NTL Lanbase, SL, our LAN/WAN installation business located in Madrid, Spain

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

We currently have minority interests in the following operating entities:


•		Two Way TV Limited, an interactive television service provider

•		Global Radio Participations SA, a European digital radio license holder

•		ITV News Channel Limited, a 24-hour news channel located in the U.K.

•		B2 (Bredband) AG, a Swedish broadband communications company, but, as described more fully in this Form 10-K, NTL Delaware entered into a settlement agreement on April 30, 2003, pursuant to which, among other things, our interest in B2 will be transferred in the near future

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Separation from NTL Incorporated; Discontinued Operations

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

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

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

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

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Application of Critical Accounting Policies and Estimates

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

•		We maintain allowances for doubtful accounts and notes receivable for estimated losses resulting from the potential inability of our customers or the other parties to make payments. These allowance are estimated based on the current aging of receivables, prior collection experience and future expectations of conditions that might impact the collectibility. If the financial condition of our customers or the other parties were to deteriorate resulting in an impairment in their ability to make payments, additions to the allowances may be required.

•		Our determination of the treatment of contingent liabilities in the financial statements is based on a view of the expected outcome of the applicable contingency. We consult legal counsel on matters related to litigation. We also consult with experts both within and outside our company with respect to other matters that arise in the ordinary course of business. Examples of such matters that are based on assumptions, judgments and estimates are the amount to be paid to terminate certain agreements included in restructuring charges and the amounts to be paid to settle certain other liabilities. A liability is accrued if the likelihood of an adverse outcome is probable of occurrence and the amount is estimable.

•		We review long-lived assets and goodwill for impairment as described in the Notes to Consolidated Financial Statements. We obtained a valuation to assist with the determination of the fair value of long-lived assets and goodwill. In analyzing potential impairments, projections of future cash flows from the asset are used. The projections are based on assumptions, judgments and estimates of growth rates for the related business, anticipated future economic, regulatory and political conditions, the assignment of discount rates relative to risk and estimates of terminal values. Changes to these variables in the future may necessitate impairment charges to reduce the carrying value to fair value.

•		Fixed assets and intangible assets are assigned useful lives which impact the annual depreciation and amortization expense. The assignment of useful lives involves significant judgments and the use of estimates. Changes in technology or changes in intended use of these assets may cause the estimated useful life to change.

•		In 2001, restructuring charges were recorded as a result of additional actions to reorganize, re-size and reduce operating costs and create greater efficiency in various areas. These charges, for both severance and exit costs, required the use of estimates. Actual results could differ from those estimated for restructuring.

•		The valuation of our pension plans requires the use of assumptions and estimates that are used to develop actuarial valuations of expenses, projected benefit obligations and funding requirements. These assumptions include, among others, discount rates, investment returns and projected salary increases. Changes in assumptions and future investment returns could potentially have a material impact on our pension expense and funding requirements.

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Results of Operations

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

Years Ended December 31, 2002 and 2001

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Years Ended December 31, 2001 and 2000

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Liquidity and Capital Resources

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

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

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

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

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

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

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Contractual Obligations and Commercial Commitments

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


			Less than		1-3		4-5		After
Contractual Obligations	Total		1 Year		Years		Years		5 Years

			(dollars in millions)
Long-Term Debt	$	2,719.3	$	2,714.7	$	1.0	$	0.2	$	3.4
Capital Lease Obligations		—		—		—		—		—
Operating Leases		32.7		4.8		10.2		10.8		6.9
Unconditional Purchase Obligations		121.8		73.1		18.4		2.9		27.4
Other Long-Term Obligations		—		—		—		—		—

Total Contractual Cash Obligations	$	2,873.8	$	2,792.6	$	29.6	$	13.9	$	37.7

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


	Total
	Amounts		Less than		1-3		4-5		Over
Other Commercial Commitments	Committed		1 Year		Years		Years		5 Years

			(dollars in millions)
Guarantees	$	—	$	—	$	—	$	—	$	—
Lines of Credit		—		—		—		—		—
Standby Letters of Credit		—		—		—		—		—
Standby Repurchase Obligations		—		—		—		—		—
Other Commercial Commitments		27.3		6.4		16.1		4.8		—

Total Commercial Commitments	$	27.3	$	6.4	$	16.1	$	4.8	$	—

Recent Accounting Pronouncements

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

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

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

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

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

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

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

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

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

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

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

Interest Rates

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

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

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

Year Ending

12/31/03

12/31/04

12/31/05

12/31/06

Long-term Debt Including Current Portion

CHF

Variable Rate

CHF3,755.0

Swiss LIBOR

Average Interest Rate

plus 2.5%

Average Forward Exchange Rate

.6227

Interest Rate Derivative Instruments Related to Long-Term Debt

Interest Rate Swaps

Notional CHF Amount

CHF1,200.0

—

Average Floor Strike Rate

3.27

Average Cap Strike Rate

5.15

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Year Ending

Fair Value

12/31/07

Thereafter

Total

12/31/02

Long-term Debt Including Current Portion

CHF

Variable Rate

CHF3,755.0

Average Interest Rate
Average Forward Exchange Rate

Interest Rate Derivative Instruments Related to Long-Term Debt

Interest Rate Swaps

Notional CHF Amount

—

CHF1,200.0

CHF (41.6)

Average Floor Strike Rate
Average Cap Strike Rate

Item 8. Financial Statements and Supplementary Data

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

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

None.

PART III

Item 10. Directors and Executive Officers of the Registrant


	Our directors and executive officers are as follows:


Name	Age	Title

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

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

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

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

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

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

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

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

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

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

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

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

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

Item 11. Executive Compensation

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

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

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Summary Compensation Table (1)


					Annual Compensation							Long-Term Compensation

												Awards(3)				Payouts

												Restricted		Securities				All Other
									Other Annual			Stock		Underlying		LTIP		Compensation
Name and Principal Position			Year		Salary($)		Bonus		Compensation($)			Awards(s)($)		Options/SARs(#)		Payouts($)		($)(4)

Barclay Knapp (5)				2002		369,763		408,100		—			—		—		—		7,334
		President and Chief		2001		277,260		561,138		—			—		5,000,000		—		7,000
		Executive Officer		2000		243,833		249,813		—			—		7,250,000		—		17,200
George S. Blumenthal (5)				2002		369,763		408,100		—			—		—		—		7,334
		Chairman and		2001		277,260		561,138		—			—		5,000,000		—		7,000
		Treasurer		2000		243,833		249,813		—			—		7,250,000		—		17,200
Richard J. Lubasch (5)				2002		467,290		470,000		—			—		—		—		7,334
	Executive Vice			2001		233,692		384,875		—			—		—		—		7,000
	President—General			2000		205,517		178,438		—			—		500,000		—		17,200
	Counsel and Secretary
John F. Gregg				2002		499,500		450,000		—			—		—		—		7,334
	Chief Financial			2001		240,220		591,250		—			—		—		—		7,000
	Officer and Senior			2000		214,960		228,125		—			—		1,000,000		—		17,200
	Vice President
Stephen A. Carter (5)				2002		413,188		1,750,405		18,723	(2)		—		—		—		952,030	(6)
	Senior Vice President and			2001		431,790		278,112		—			—		—		—		6,738
	Chief Operating Officer			2000		60,636		—		—			—		400,000		—		38,384
Brett Richter (5)				2002		299,500		300,000		—			—		—		—		7,334
	Senior Vice President –			2001		183,428		319,750		—			—		—		—		7,000
	Finance			2000		138,884		138,000		—			—		250,000		—		17,200

(1)		All amounts reflect the compensation paid to each listed employee in respect of such employee’s position with NTL Communications Corp. (now known as NTL Incorporated), Old NTL and NTL Delaware, as the case may be.

(2)		Mr. Carter’s other annual compensation represents an automobile allowance he received from Old NTL.

(3)		Options granted were options to purchase shares of Old NTL. All such remaining options were cancelled upon the consummation of Old NTL’s plan of reorganization on January 10, 2003.

(4)		All other compensation reflects Old NTL’s match of employee contributions to a 401(k) plan or in the case of Stephen Carter, contributions to Mr. Carter’s UK executive pension scheme.

(5)		Messrs. Knapp, Blumenthal, Lubasch and Richter terminated their employment with us effective January 10, 2003. Mr. Carter terminated his employment with Old NTL effective November 30, 2002.

(6)		Includes severance payments in the amount of $901,500.

Equity Compensation Plan Information

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

Management Incentive Plan

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

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

Compensation of Directors

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

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

Employment Agreements

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

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

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

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

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

John Gregg.

Employment agreement with us:

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

Title: chief financial officer

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

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

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

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

Employment agreement with Cablecom GmbH:

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

Title: chief financial officer

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

Bruno Claude.

Employment agreement with us:

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

Title: chief operating officer

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

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

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

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

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Employment agreement with Cablecom GmbH:

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

Title: chief executive officer

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

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

Compensation Committee Interlocks and Insider Participation

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

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

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


	Amount and Nature of Beneficial Ownership

Executive Officers, Directors and
Principal Stockholders (1)	Common Stock			Percentage of Class

Angelo, Gordon & Co., L.P. 245 Park Avenue New York, New York 10167		2,488,200	(2)		12.7	%
John M. Angelo c/o Angelo, Gordon & Co., L.P. 245 Park Avenue New York, New York 10167		2,488,200	(2)		12.7	%
Michael L. Gordon c/o Angelo, Gordon & Co., L.P. 245 Park Avenue New York, New York 10167		2,488,200	(2)		12.7	%

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	Amount and Nature of Beneficial Ownership

Executive Officers, Directors and
Principal Stockholders (1)	Common Stock			Percentage of Class

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

(1)

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

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(2)		Based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on April 22, 2003 relating to shares of common stock held for the accounts of seventeen private investment funds for which Angelo, Gordon acts as general partner and/or investment adviser. John M. Angelo is the general partner of AG Partners, L.P., which is the sole general partner of Angelo, Gordon. Mr. Angelo is also the chief executive officer Angelo, Gordon. Michael L. Gordon is the other general partner of AG Partners, L.P. and the chief operating officer of Angelo, Gordon.

(3)		Based on information contained in a Schedule 13D filed with the Securities and Exchange Commission on January 21, 2003 relating to shares of common stock acquired by Appaloosa Investment Limited Partnership I and Palomino Fund Ltd. Appaloosa Management L.P. is the sole general partner of Appaloosa Investment Limited Partnership I and the investment advisor to Palomino Fund Ltd. Appaloosa Partners Inc. is the sole general partner of Appaloosa Management L.P. Mr. David A. Tepper is the sole stockholder and sole director of Appaloosa Partners Inc.

Item. 13. Certain Relationships and Related Transactions

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

Our Relationship with New NTL

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

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

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

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

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

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

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

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

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

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

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

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

Old NTL's Relationship with ATX Communications, Inc.

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

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

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

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

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

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

Item 14. Controls and Procedures

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

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

PART IV

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

	(a)		The following are filed as a part of this report.

	(1)		Financial Statements


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

(2)

Financial Statement Schedules


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

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

(3)

Exhibits


Exhibit
No.		Description

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

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Exhibit
No.		Description

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

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Exhibit
No.		Description

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

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Exhibit
No.		Description

99.5*		Code of Ethics for Principal Executive and Senior Financial Officers adopted on January 10, 2003
99.6*		Compensation Committee Charter of NTL Europe, Inc. adopted on January 10, 2003
99.7*		Audit Committee Charter of NTL Europe, Inc. adopted on January 10, 2003
99.8*		Disclosure Committee Charter of NTL Europe, Inc. adopted on April 10, 2003

filed herewith

(b)

Reports on Form 8-K

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

	(1)		Current Report on Form 8-K, filed November 7, 2002, regarding Stephen Carter’s (former Managing Director) announcement of his intention to leave Old NTL.

	(2)		Current Report on Form 8-K filed November 12, 2002, inviting investors to Old NTL’s third quarter financial results conference call on November 14, 2002.

	(3)		Current Report on Form 8-K, filed November 14, 2002, announcing results for the three months ended September 30, 2002.

	(4)		Current Report on Form 8-K, filed December 12, 2002, announcing Old NTL’s intention of reaching agreements in order to consummate its plan of reorganization.

	(5)		Current Report on Form 8-K, filed December 24, 2002, announcing that a supplementary prospectus was published in relation to the proposed offering in the United Kingdom of Warrants in connection with the reorganization plan.

	(6)		Current Report on Form 8-K, filed December 30, 2002, announcing a fourth supplementary prospectus published in relation to the proposed offering in the United Kingdom of Warrants in connection with the reorganization plan.

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

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

Index to Consolidated Financial Statements
and Financial Statement Schedules

The following consolidated financial statements are included in Item 8:


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

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


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

All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore have been omitted.

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

F-1

REPORT OF INDEPENDENT AUDITORS

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

We have audited the consolidated balance sheets of NTL Europe, Inc. (formerly NTL Incorporated) and Subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of operations, shareholders’ (deficiency) and cash flows for each of the three years in the period ended December 31, 2002. Our audits also included the financial statement schedules listed in the Index at Item 15(a). These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of NTL Europe, Inc. (formerly NTL Incorporated) and Subsidiaries at December 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

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

/s/ ERNST & YOUNG LLP

New York, New York
May 28, 2003

F-2

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


		December 31,

		2002		2001

Assets
Current assets:
	Cash and cash equivalents	$	277.5	$	228.3
	Marketable securities		17.3		—
	Accounts receivable — trade, less allowance for doubtful accounts of $9.4 (2002) and $6.6 (2001)		243.4		194.2
	Other		50.3		67.9
	Discontinued operations		12,968.1		13,331.0

Total current assets			13,556.6		13,821.4
Fixed assets, net			1,682.1		1,494.9
Goodwill			218.7		960.0
Customer lists, net of accumulated amortization of $171.4 (2002) and $91.1 (2001)			62.8		104.1
Investments in and loans to affiliates, net			13.0		267.8
Deferred tax asset			195.3		20.4
Other assets, net of accumulated amortization of $62.4 (2002) and $24.9 (2001)			120.9		190.3

Total assets		$	15,849.4	$	16,858.9

F-3

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


		December 31,

		2002			2001

Liabilities and shareholders’ (deficiency)
Liabilities not subject to compromise
Current liabilities:
	Accounts payable	$	49.3		$	37.7
	Accrued expenses and other		92.5			158.5
	Interest payable		43.5			50.5
	Deferred revenue		235.6			173.3
	Current portion of long-term debt		2,719.3			3,460.2
	Discontinued operations (including liabilities subject to compromise of $10,157.8)		17,956.2			16,426.2

Total current liabilities			21,096.4			20,306.4
Long-term debt			—			—
Other			132.7			156.6
Deferred income taxes			226.0			164.6
Liabilities subject to compromise, including redeemable preferred stock			4,294.1			—
Commitments and contingent liabilities
Redeemable preferred stock — $.01 par value, plus accreted dividends; liquidation preference $3,024.7; less unamortized discount of $33.4 (2002) and $53.4 (2001); issued and outstanding 2.1 shares (2002 and 2001)			—			2,773.7
Shareholders’ (deficiency):
	Series preferred stock — $.01 par value; authorized 10.0 shares; liquidation preference $3,160.0; issued and outstanding 3.0 shares (2002 and 2001)		—			—
	Common stock — $.01 par value; authorized 800.0 shares; issued and outstanding 276.6 shares (2002 and 2001)		2.8			2.8
	Additional paid-in capital		13,574.9			13,720.0
	Accumulated other comprehensive (loss)		(830.2	)		(1,072.8	)
	(Deficit)		(22,647.3	)		(19,192.4	)

			(9,899.8	)		(6,542.4	)

Total liabilities and shareholders’ (deficiency)		$	15,849.4		$	16,858.9

See accompanying notes.

F-4

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


			Year Ended December 31,

			2002			2001			2000

Revenues			$	435.9		$	391.6		$	226.8
Costs and expenses Operating expenses (exclusive of depreciation shown separately below)				175.4			170.4			88.9
Selling, general and administrative expenses				138.8			178.0			103.1
Asset impairments				854.3			912.1			—
Other charges				3.5			12.2			—
Corporate expenses				11.5			42.5			23.8
Depreciation				222.7			154.4			87.4
Amortization				95.5			433.4			299.3

				1,501.7			1,903.0			602.5

Operating (loss)				(1,065.8	)		(1,511.4	)		(375.7	)
Other income (expense) Interest income and other, net				(11.0	)		20.4			45.5
Interest expense (contractual interest of $223.5 (2002))				(156.1	)		(195.1	)		(139.7	)
Share of (losses) from equity investments				(251.3	)		(660.0	)		(46.7	)
Other gains (losses)				3.0			(58.9	)		—
Foreign currency transaction gains (losses)				9.3			(14.3	)		(62.5	)

(Loss) before recapitalization items, income taxes and discontinued operations				(1,471.9	)		(2,419.3	)		(579.1	)
Recapitalization items, net				(4.8	)		—			—

(Loss) before income taxes and discontinued operations				(1,476.7	)		(2,419.3	)		(579.1	)
Income tax benefit (expense)				128.1			50.9			22.9

(Loss) from continuing operations				(1,348.6	)		(2,368.4	)		(556.2	)
Discontinued operations:
	(Loss) from discontinued operations, net of income tax benefit of $26.3 (2002), $114.1 (2001) and $88.1 (2000)			(2,100.6	)		(11,872.9	)		(2,407.5	)
	Net (loss) on sales of discontinued operations, net of income tax expense of $4.6 (2002)			(5.7	)		—			—

(Loss) from discontinued operations				(2,106.3	)		(11,872.9	)		(2,407.5	)

Net (loss)				(3,454.9	)		(14,241.3	)		(2,963.7	)
Preferred stock dividends (contractual dividends of $370.6 (2002))				(145.1	)		(325.7	)		(194.0	)

Net (loss) available to common shareholders			$	(3,600.0	)	$	(14,567.0	)	$	(3,157.7	)

Basic and diluted net (loss) per share:
		(Loss) from continuing operations	$	(5.40	)	$	(9.76	)	$	(3.46	)
		(Loss) from discontinued operations		(7.62	)		(43.02	)		(11.08	)

		Net (loss) per common share	$	(13.02	)	$	(52.78	)	$	(14.54	)

		Weighted average shares		276.6			276.0			217.1

See accompanying notes.

F-5

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


	Series Preferred Stock					Common Stock					Additional
	$.01 Par Value					$.01 Par Value					Paid-In

	Shares			Par		Shares			Par		Capital

Balance, December 31, 1999		1.3		$	—		132.4		$	1.3	$	4,125.1
Exercise of stock options							2.3			—		36.3
Rescission of stock option exercises							(0.2	)				(1.1	)
Exercise of warrants							1.3			—		9.0
Common stock issued for cash							42.2			0.4		2,327.2
Preferred stock issued for cash		2.0										1,862.0
Common stock issued for an acquisition							84.9			0.9		5,487.4
Conversion of series preferred stock		(0.5	)		—		9.2			0.1		7.5
Preferred stock issued for dividends												9.4
Accreted dividends on preferred stock		0.1			—							(97.8	)
Accretion of discount on preferred stock												(0.3	)
Comprehensive loss:
Net loss for the year ended December 31, 2000 Currency translation adjustment Unrealized net losses on investments Total

Balance, December 31, 2000		2.9			—		272.1			2.7		13,764.7
Exercise of stock options							1.1					13.0
Non-cash compensation												30.6
Accreted dividends on preferred stock		0.1										(195.5	)
Accretion of discount on preferred stock												(25.3	)
Conversion of 7% Convertible Notes							3.3			0.1		128.2
Common stock issued for an acquisition							0.1					4.3
Comprehensive loss:
Net loss for the year ended December 31, 2001 Currency translation adjustment Unrealized net losses on investments Unrealized net losses on derivatives Total

Balance, December 31, 2001		3.0			—		276.6			2.8		13,720.0
Accreted dividends on preferred stock												(125.1	)
Accretion of discount on preferred stock												(20.0	)
Comprehensive loss:
Net loss for the year ended December 31, 2002 Currency translation adjustment Reclassification adjustment Additional minimum pension liability Unrealized net losses on derivatives Total

Balance, December 31, 2002		3.0		$	—		276.6		$	2.8	$	13,574.9

F-6

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


								Accumulated Other
								Comprehensive
								(Loss)
								Unrealized			Unrealized
					Foreign			Net			Net
		Comprehensive			Currency			Losses on			Losses on			Minimum Pension
		(Loss)			Translation			Investments			Derivatives			Liability			(Deficit)

Balance, December 31, 1999					$	(2.1	)										$	(1,987.4	)
Exercise of stock options Rescission of stock option exercises Exercise of warrants Common stock issued for cash Preferred stock issued for cash Common stock issued for an acquisition Conversion of series preferred stock Preferred stock issued for dividends Accreted dividends on preferred stock Accretion of discount on preferred stock Comprehensive loss:
Net loss for the year ended December 31, 2000		$	(2,963.7	)														(2,963.7	)
Currency translation adjustment			(432.6	)		(432.6	)
Unrealized net losses on investments			(14.2	)				$	(14.2	)

	Total		(3,410.5	)

Balance, December 31, 2000						(434.7	)		(14.2	)								(4,951.1	)
Exercise of stock options Non-cash compensation Accreted dividends on preferred stock Accretion of discount on preferred stock
Conversion of 7% Convertible Notes Common stock issued for an acquisition
Comprehensive loss:
Net loss for the year ended December 31, 2001			(14,241.3	)														(14,241.3	)
Currency translation adjustment			(607.8	)		(607.8	)
Unrealized net losses on investments			(1.1	)					(1.1	)
Unrealized net losses on derivatives			(15.0	)							$	(15.0	)

	Total		(14,865.2	)

Balance, December 31, 2001						(1,042.5	)		(15.3	)		(15.0	)					(19,192.4	)
Accreted dividends on preferred stock Accretion of discount on preferred stock Comprehensive loss:
Net loss for the year ended December 31, 2002			(3,454.9	)														(3,454.9	)
Currency translation adjustment			272.4			272.4
Reclassification adjustment			15.3						15.3
Additional minimum pension liability			(30.0	)										$	(30.0	)
Unrealized net losses on derivatives			(15.1	)								(15.1	)

	Total	$	(3,212.3	)

Balance, December 31, 2002					$	(770.1	)	$	—		$	(30.1	)	$	(30.0	)	$	(22,647.3	)

See accompanying notes.

F-7

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


		Year Ended December 31,

		2002			2001			2000

Operating activities
Net (loss)		$	(3,454.9	)	$	(14,241.3	)	$	(2,963.7	)
(Loss) from discontinued operations			(2,100.6	)		(11,872.9	)		(2,407.5	)
Net (loss) on sales of discontinued operations			(5.7	)		—			—

Loss from continuing operations			(1,348.6	)		(2,368.4	)		(556.2	)
Adjustments to reconcile to net cash provided by (used in) continuing operations:
	Depreciation and amortization		318.2			587.8			386.7
	Asset impairments		854.3			912.1			—
	Write-down of other assets		28.2			—			—
	Equity in losses of unconsolidated subsidiaries		251.3			660.0			46.7
	(Gain) loss on sale of assets		(6.2	)		58.2			—
	Provision for losses on accounts receivable		7.2			39.7			0.4
	Deferred income taxes		(127.5	)		(50.3	)		(23.1	)
	Amortization of original issue discount		—			0.2			0.3
	Other		1.9			51.2			1.1
Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions:
	Accounts receivable		(10.1	)		(13.0	)		(116.6	)
	Other current assets		(70.1	)		31.2			(18.8	)
	Other assets		4.5			(5.2	)		1.0
	Accounts payable		8.0			2.8			11.4
	Accrued expenses and other		(33.1	)		5.6			47.9
	Deferred revenue		25.2			9.1			58.0

Net cash (used in) continuing operations			(96.8	)		(79.0	)		(161.2	)
Net cash provided by (used in) discontinued operations			251.9			(518.8	)		(129.0	)

Net cash provided by (used in) operating activities			155.1			(597.8	)		(290.2	)
Investing activities
Acquisitions, net of cash acquired			—			—			(3,425.1	)
Purchase of fixed assets			(120.8	)		(245.2	)		(277.7	)
Investments in and loans to affiliates			(15.9	)		(125.8	)		(365.6	)
Increase in other assets			(7.0	)		(49.0	)		(121.5	)
Loan to NTL (UK) Group, Inc.			(129.2	)		150.0			—
Proceeds from sales of assets			432.2			30.9			—
Loan to ATX Communications, Inc.			—			(15.0	)		—
Purchase of marketable securities			(63.5	)		—			(155.1	)
Proceeds from sales of marketable securities			46.3			60.3			444.3

Net cash provided by (used in) continuing operations			142.1			(193.8	)		(3,900.7	)
Net cash (used in) discontinued operations			(734.4	)		(1,906.0	)		(9,527.5	)

Net cash (used in) investing activities			(592.3	)		(2,099.8	)		(13,428.2	)

F-8

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


	Year Ended December 31,

	2002			2001			2000

Financing activities
Proceeds from borrowings, net of financing costs		104.1			461.3			1,860.3
Proceeds from issuance of preferred stock and warrants		—			—			1,862.0
Proceeds from issuance of common stock		—			—			2,327.6
Proceeds from issuance of redeemable preferred stock		—			—			1,850.0
Proceeds from exercise of stock options and warrants		—			13.0			44.2
Principal payments		(2.9	)		(68.3	)		(39.1	)
Repayment of the NTL Australia bank loan		(121.7	)		—			—

Net cash provided by (used in) continuing activities		(20.5	)		406.0			7,905.0
Net cash provided by discontinued activities		681.4			2,227.9			3,823.4

Net cash provided by financing activities		660.9			2,633.9			11,728.4
Effect of exchange rate changes on cash		51.2			(11.1	)		(27.8	)

Increase (decrease) increase in cash and cash equivalents		274.9			(74.8	)		(2,017.8	)
Cash and cash equivalents at beginning of year – continuing operations		228.3			126.4			1,510.2
Cash and cash equivalents at beginning of year – discontinued operations		276.3			453.0			1,087.0
Cash and cash equivalents at end of year – discontinued operations		(502.0	)		(276.3	)		(453.0	)

Cash and cash equivalents at end of year – continuing operations	$	277.5		$	228.3		$	126.4

Supplemental disclosure of cash flow information
Cash paid during the year for interest exclusive of amounts capitalized	$	130.4		$	171.3		$	131.1
Income taxes paid		—			13.4			5.2
Supplemental schedule of non-cash financing activities
Accretion of dividend and discount on preferred stock	$	145.1		$	220.8		$	98.1
Conversion of notes, net of unamortized deferred financing costs		—			18.8			—
Common stock issued for acquisitions		—			4.3			5,488.3
Redeemable preferred stock issued for investment in affiliates		—			518.0			—
Conversion of series preferred stock		—			—			7.6

See accompanying notes.

F-9

Organization and Business

Summary

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

NTL’s Completed Restructuring

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

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

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

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

Historical Structure of the Company

On May 18, 2000, the entity then known as NTL Incorporated (currently named NTL (Delaware), Inc. (“NTL Delaware”)) completed a corporate restructuring to create a holding company structure. The formation of the holding company was part of NTL Delaware’s acquisition of certain assets of Cable & Wireless Communications plc (“CWC”). The holding company restructuring was accomplished through a merger so that all the stockholders of NTL Delaware at the effective time of the merger became stockholders of the new holding company, and NTL Delaware became a subsidiary of the new holding company. The new holding company was called NTL Incorporated (which is now known as NTL Europe, Inc.) and the holding company’s subsidiary simultaneously changed its name to NTL (Delaware), Inc.

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

F-10

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

Organization and Business (continued)

Business

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

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

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

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

Reorganization and Emergence from Chapter 11

Background of Restructuring

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

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

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

F-11

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

Reorganization and Emergence from Chapter 11 (continued)

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

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

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

Liquidity and Capital Resources

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

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

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

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

F-12

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

Reorganization and Emergence from Chapter 11 (continued)

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

Recapitalization Expense

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

Recapitalization items, net consist of the following:


		Year Ended
		December 31,

	2002			2001		2000

				(in millions)
Payroll and related costs paid	$	(0.1	)	$	—	$	—
Professional fees		(6.9	)		—		—
Interest earned on accumulated cash from Chapter 11 proceeding (1)		2.2			—		—

	$	(4.8	)	$	—	$	—

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


	Year Ended
	December 31, 2002

	(in millions)
Interest income (1)	$	2.2
Payroll and related costs paid		—
Professional fees		(45.9	)

Net operating cash flows from recapitalization items	$	(43.7	)

(1)

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

Pro Forma Consolidated Balance Sheet

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

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

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

F-13

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

Reorganization and Emergence from Chapter 11 (continued)

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

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


	(in millions)

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

TOTAL	$	9,859.1

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

F-14

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

Reorganization and Emergence from Chapter 11 (continued)


																	Pro Forma
			Historical as			Emergence						Before					as of
			of December			from			Fresh-			Deconsolidation		Deconsolidation			December
			31, 2002			Chapter 11			Start			of Cablecom		of Cablecom			31, 2002

												(in millions)
Assets Current assets:
	Cash and cash equivalents		$	277.5		$	(117.7	)	$	—		$	159.8	$	(85.9	)	$	73.9
	Marketable securities			17.3			(17.3	)		—			—		—			—
	Accounts receivable-trade, less allowance for doubtful accounts			243.4			—			—			243.4		(230.8	)		12.6
	Other			50.3			—			—			50.3		(38.5	)		11.8
	Discontinued operations			12,968.1			(12,968.1	)		—			—		2,189.1			2,189.1

Total current assets				13,556.6			(13,103.1	)		—			453.5		1,833.9			2,287.4
Fixed assets, net				1,682.1			—			(506.9	)		1,175.2		(1,166.8	)		8.4
Goodwill				218.7			—			(218.7	)		—		—			—
Reorganization value in excess of amounts allocable to identifiable assets				—			—			213.9			213.9		(213.9	)		—
Customer lists, net				62.8			—			146.8			209.6		(209.6	)		—
Investments in and loans to affiliates, net				13.0			—			—			13.0		(7.7	)		5.3
Deferred tax asset				195.3			—			80.4			275.7		(235.5	)		40.2
Other assets, net				120.9			(22.5	)		(50.8	)		47.6		(0.4	)		47.2

Total assets			$	15,849.4		$	(13,125.6	)	$	(335.3	)	$	2,388.5	$	—		$	2,388.5

Liabilities and shareholders’ (deficiency) Liabilities not subject to compromise Current liabilities:
	Accounts payable		$	49.3		$	—		$	—		$	49.3	$	(40.6	)	$	8.7
	Accrued expenses and other			92.5			(1.2	)		—			91.3		(64.2	)		27.1
	Interest payable			43.5			—			—			43.5		(43.5	)		—
	Deferred revenue			235.6			—			—			235.6		(229.8	)		5.8
	Current portion of long-term debt			2,719.3			—			(1,284.9	)		1,434.4		(1,434.4	)		—
	Discontinued operations			17,956.2			(17,956.2	)		—			—		2,189.1			2,189.1

Total current liabilities				21,096.4			(17,957.4	)		(1,284.9	)		1,854.1		376.6			2,230.7
Long-term debt				—			—			—			—		—
Other				132.7			—			(16.4	)		116.3		(96.9	)		19.4
Deferred income taxes				226.0			—			93.9			319.9		(279.7	)		40.2
Commitments and contingent liabilities				—			—			—			—		—			—
Senior Redeemable Preferred				—			98.0			—			98.0		—			98.0
Liabilities subject to compromise				4,294.1			(4,294.1	)		—			—		—			—
Shareholders’ (deficiency):
		Series preferred stock		—			—			—			—		—			—
	Common stock-old			2.8			(2.8	)		—			—		—			—
	Common stock-new			—			0.2			—			0.2		—			0.2
	Additional paid-in capital			13,574.9			—			(13,574.9	)		—		—			—
	Accumulated other comprehensive (loss)			(830.2	)					830.2			—		—			—
	(Deficit)			(22,647.3	)		9,030.5			13,616.8			—		—			—

Shareholders’ (deficiency)				(9,899.8	)		9,027.9			872.1			0.2		—			0.2

Total liabilities and shareholders’ (deficiency)			$	15,849.4		$	(13,125.6	)	$	(335.3	)	$	2,388.5	$	—		$	2,388.5

F-15

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

Significant Accounting Policies

Basis of Presentation and Use of Estimates

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

		The Company’s management and Board will explore strategic and financial alternatives available to it, including the Company’s possible liquidation, a going-private transaction and the sale of its remaining assets. During 2003, the Company’s primary expenses are expected to consist of salaries, professional fees, insurance and severance payments, as well as, certain funding obligations to selected subsidiaries of approximately $13 million.

		After the consummation of the Company’s restructuring on January 10, 2003, the Company had approximately $63 million in cash and its subsidiaries had approximately $11 million in cash, which management believes will be adequate to finance the Company’s operating expenses and funding requirements through at least January 1, 2004. Further, after reserving for certain contingent liabilities, to the extent the Company has remaining funds legally available, the Company intends to pay dividends on or redeem shares of its Preferred Stock. The liquidation preference of the Preferred Stock aggregates $343 million. Accordingly, it is highly unlikely that common shareholders will ever receive any distribution related to their shares. However, as noted above, the Company should be able to pay its liabilities and funding requirements as they come due through at least January 1, 2004.

		The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, including AICPA Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (“SOP 90-7”). Old NTL had determined that there was insufficient collateral to cover the interest portion of scheduled payments on certain of its prepetition debt obligations. Old NTL had therefore discontinued accruing interest on these obligations. For the year ended December 31, 2002, contractual interest was $223.5 million, which was $67.4 million in excess of reported interest expense.

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

Principles of Consolidation

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

Reclassification

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

Foreign Currency Translation

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

F-16

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

Significant Accounting Policies (continued)

Cash Equivalents

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

Marketable Securities

Marketable securities at December 31, 2002 consist of commercial paper. Marketable securities are classified as available-for-sale, which are carried at fair value. Unrealized holding gains and losses on securities, net of tax, are carried as a component of accumulated other comprehensive (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest income.

Realized gains and losses and declines in value judged to be other than temporary are included in interest income. The cost of securities sold or matured is based on the specific identification method. Interest on securities is included in interest income.

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

Fixed Assets

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

Intangible Assets

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

Customer lists represent the portion of the purchase price allocated to the value of the customer base. Customer lists are amortized on a straight-line basis over 3 or 5 years.

Impairment of Long-Lived Assets

Long-lived assets, including fixed assets and amortizable definite lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset.

F-17

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

Significant Accounting Policies (continued)

Investments

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

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

Deferred Financing Costs

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

Revenue Recognition

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

Cable Television System Costs, Expenses and Revenues

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

Advertising Expense

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

Stock-Based Compensation

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

F-18

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

Significant Accounting Policies (continued)

Stock-Based Compensation (continued)

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


	For the Year Ended December 31,

	2002			2001			2000

	(in millions, except per share amounts)
Non-cash compensation expense, as reported	$	—		$	30.6		$	—
Non-cash compensation expense, pro forma	$	264.3		$	268.3		$	255.8
Net loss, as reported	$	(3,454.9	)	$	(14,241.3	)	$	(2,963.7	)
Net loss, pro forma	$	(3,719.2	)	$	(14,509.6	)	$	(3,219.5	)
Basic and diluted net (loss) per share	$	(13.02	)	$	(52.78	)	$	(14.54	)
Basic and diluted pro forma net (loss) per share	$	(13.97	)	$	(53.75	)	$	(15.72	)

Derivative Financial Instruments

Old NTL has used financial instruments to hedge a portion, but not all, of its exposure from floating interest rate debt and from movements in foreign exchange rates. Gains and losses on these instruments were deferred and recognized in the statement of operations when the related hedged transactions were recognized. To date, premiums paid for these contracts have not been material. The Company does not use derivative financial instruments for trading or speculative purposes.

4. Discontinued Operations

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

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

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

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

F-19

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

Discontinued Operations (continued)

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


			December 31, 2002
			(in millions)

	New		NTL
	NTL		Australia		Rediffusion		Total

Current assets	$	1,097.4	$	—	$	—	$	1,097.4
Fixed assets, net		11,088.9		—		—		11,088.9
Other assets		781.8		—		—		781.8

Total assets	$	12,968.1	$	—	$	—	$	12,968.1

Current liabilities	$	7,729.2	$	—		—	$	7,729.2
Non current liabilities		94.4		—		—		94.4
Liabilities subject to compromise		10,132.6		—		—		10,132.6

Total liabilities	$	17,956.2	$	—	$	—	$	17,956.2


			December 31, 2001
			(in millions)

	New		NTL
	NTL		Australia		Rediffusion		Total

Current assets	$	1,002.7	$	32.0	$	32.1	$	1,066.8
Fixed assets, net		10,840.3		235.2		2.9		11,078.4
Other assets		1,027.1		137.9		20.8		1,185.8

Total assets	$	12,870.1	$	405.1	$	55.8	$	13,331.0

Current liabilities	$	16,087.3	$	71.1	$	29.3	$	16,187.7
Non current liabilities		122.7		111.9		3.9		238.5

Total liabilities	$	16,210.0	$	183.0	$	33.2	$	16,426.2


				Year Ended December 31, 2002
				(in millions)

	New			NTL
	NTL			Australia			Rediffusion			Total

Revenues	$	3,256.5		$	17.3		$	49.8		$	3,323.6
Operating (loss)		(1,128.4	)		0.3			(7.1	)		(1,135.2	)
Net (loss)		(2,093.4	)		(0.3	)		(6.9	)		(2,100.6	)

F-20

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

4. Discontinued Operations (continued)


	Year Ended December 31, 2001
	(in millions)
	New			NTL
	NTL			Australia			Rediffusion			Total

Revenues	$	3,181.5		$	61.8		$	64.3		$	3,307.6
Operating (loss)		(10,409.7	)		(7.4	)		(15.4	)		(10,432.5	)
Net (loss)		(11,850.8	)		(6.5	)		(15.6	)		(11,872.9	)


	Year Ended December 31, 2000
	(in millions)
	New			NTL
	NTL			Australia			Rediffusion		Total

Revenues	$	2,484.2		$	55.0		$	74.7	$	2,613.9
Operating (loss)		(1,525.2	)		(19.5	)		1.4		(1,543.3	)
Net (loss)		(2,388.1	)		(20.9	)		1.5		(2,407.5	)

5. Recent Accounting Pronouncements

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

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

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

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

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

F-21

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

5. Recent Accounting Pronouncements (continued)

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

6. Asset Impairments

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

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

7. Fixed Assets

Fixed assets consist of:


	December 31,

	2002			2001

	(in millions)
Operating equipment	$	2,109.2		$	1,691.4
Other equipment		109.5			64.7
Construction-in-progress		25.1			2.8

		2,243.8			1,758.9
Accumulated depreciation		(561.7	)		(264.0	)

	$	1,682.1		$	1,494.9

F-22

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

8. Cablecom Acquisition and Intangible Assets

On March 28, 2000, Old NTL acquired the cable assets of the Cablecom group in Switzerland for cash of CHF 5,800.0 million ($3,510.2 million), a substantial portion of which was funded by a new bank facility of CHF 2,700.0 million ($1,630.5 million) and Old NTL’s issuance of $1,850.0 million of preferred stock to France Telecom and a group of commercial banks. This acquisition was accounted for as a purchase and, accordingly, the net assets and results of operations of Cablecom have been included in the consolidated financial statements from the date of acquisition. The aggregate purchase price of $3,528.6 million, which includes costs incurred of $18.4 million, exceeded the fair value of net tangible assets acquired by $2,282.2 million, which was allocated as follows: $195.9 million to customer lists, $73.1 million to deferred taxes and $2,159.4 million to goodwill.

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


Goodwill – December 31, 2001	$	960.0
Impairment charge		(841.0	)
Foreign currency exchange translation adjustments		99.7

Goodwill – December 31, 2002	$	218.7

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

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

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

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


		Year Ended December 31,

		2002			2001			2000

Loss from continuing operations — as reported		$	(1,348.6	)	$	(2,368.4	)	$	(556.2	)
Amortization of:
	Goodwill		—			318.2			238.8
	Other		—			32.8			0.8

			—			351.0			239.6

Loss from continuing operations – as adjusted		$	(1,348.6	)	$	(2,017.4	)	$	(316.6	)

9. Investments in and Loans to Affiliates

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

F-23

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

9. Investments in and Loans to Affiliates (continued)

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

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

B2 (Bredband)AG

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

F-24

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

9. Investments in and Loans to Affiliates (continued)

Premium TV Limited

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

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

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

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

Two Way TV Limited

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

F-25

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

9. Investments in and Loans to Affiliates (continued)

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


	December 31, 2002					December 31, 2001

	Ownership			Balance		Ownership			Balance

	(in millions)
Noos		27.00	%	$	—		27.00	%	$	47.0
B2		34.01	%		—		34.01	%		92.5
iesy		32.50	%		—		32.50	%		73.0
Others					4.7					48.3

Total equity investments					4.7					260.8
Total cost investments					8.3					7.0

Total				$	13.0				$	267.8

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

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


	December 31,		December 31,
	2002		2001

	(in millions)
Current assets	$	367.6	$	454.4
Fixed assets, net		1,137.8		908.1
Other assets		1,171.0		2,688.5

Total assets	$	2,676.4	$	4,051.0

Current liabilities	$	467.7	$	309.1
Non current liabilities		1,753.0		1,403.6
Total shareholders’ equity		455.7		2,338.3

Total liabilities and shareholders’ equity	$	2,676.4	$	4,051.0


	Year Ended December 31

	2002			2001			2000

				(in millions)
Revenues	$	339.2		$	326.6		$	115.3
Operating (loss)		(1,773.8	)		(417.0	)		(225.1	)
Net (loss)		(1,802.5	)		(564.0	)		(296.6	)

F-26

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

10. Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:


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

				Total	$	4,294.1

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

11. Long-Term Debt

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


		December 31,		December 31,
		2002		2001

		(in millions)
NTL Europe, Inc.:
	5 3/4% Convertible Subordinated Notes	$	—	$	100.0
NTL Delaware:
	5 3/4% Convertible Subordinated Notes		—		1,200.0
Cablecom:
	Term Loan Facility		1,951.8		1,626.8
	Revolving Facility		762.7		527.2
	Other		4.8		6.2

			2,719.3		3,460.2
Less current portion			2,719.3		3,460.2

		$	—	$	—

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

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

F-27

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

11. Long-Term Debt (continued)

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

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

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

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

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


Year ending December 31:
2003	$	2,714.7
2004		0.9
2005		0.1
2006		0.1
2007		0.1
Thereafter		3.4

Total debt repayments		2,719.3
Less: current portion		2,719.3

	$	—

F-28

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

12. Derivative Financial Instruments

Effective January 1, 2001, Old NTL adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS Nos. 137 and 138. The new accounting standard requires that all derivative instruments be recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in the results of operations or in other comprehensive loss, depending on whether a derivative is designated as a fair value or cash flow hedge. The ineffective portion of all hedges is recognized in the results of operations. Beginning in October 1, 2001, Old NTL has recorded the change in the fair value of derivatives related to changes in time value each period in other comprehensive loss for certain qualifying cash flow hedges.

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

13. Redeemable Preferred Stock

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

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

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

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

F-29

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

13. Redeemable Preferred Stock (continued)

In February 1997, Old NTL issued 100,000 shares of its 13% Senior Redeemable Exchangeable Preferred Stock (the “Redeemable Preferred Stock”). Old NTL received net proceeds of $96.6 million after discounts and commissions from the issuance of the Redeemable Preferred Stock. Discounts, commissions and other fees incurred of $3.7 million were recorded as unamortized discount at issuance. Dividends accrued at 13% per annum ($130 per share) and were payable quarterly in arrears. Dividends accruing on or prior to February 15, 2004 may, at the option of Old NTL, be paid in cash, by the issuance of additional Redeemable Preferred Stock or in any combination of the foregoing. As of December 31, 2002, Old NTL had accrued $95.4 million for dividends and had issued approximately 84,000 shares for $83.8 million of such accrued dividends. The Redeemable Preferred Stock was redeemable, at Old NTL’s option, in whole or in part, at any time on or after February 15, 2002 at a redemption price of 106.5% of the liquidation preference of $1,000 per share that declined annually to 100% in 2005, in each case together with accrued and unpaid dividends to the redemption date. The Redeemable Preferred Stock was subject to mandatory redemption on February 15, 2009.

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


	13%		5%			Variable		6.5%		Convertible

Shares at December 31, 1999		142,000		—			—		—		—
Issued for cash		—		1,850,000			—		—		—
Issued for dividends		20,000		—			—		—		—

Shares at December 31, 2000		162,000		1,850,000			—		—		—
Issued for investment in Noos		—		—			47,000		12,000		—
Issued for dividends		22,000		—			1,000		—		—
Exchange		—		(1,850,000	)		—		—		1,850,000

Shares at December 31, 2001		184,000		—			48,000		12,000		1,850,000
Issued for dividends		—		—			—		—		—

Shares at December 31, 2002		184,000		—			48,000		12,000		1,850,000

Liquidation preference at December 31, 2002 (in millions)	$	212.3	$	—		$	502.6	$	135.4	$	2,174.4

14. Non-Cash Compensation

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

15. Other Charges Including Restructuring Charges

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

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

F-30

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

15. Other Charges Including Restructuring Charges (continued)

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


	Employee
	Severance
	and Related Costs

Charged to expense	$	6.8
Utilized		—

Balance, December 31, 2001		6.8
Utilized		(4.6	)

Balance, December 31, 2002	$	2.2

16. Income Taxes

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


		Year Ended December 31,

		2002			2001			2000

					(in millions)
Current:
	Federal	$	(4.6	)	$	—		$	—
	State and local		1.3			—			0.2
	Foreign		3.4			0.3			—

Total current			0.1			0.3			0.2

Deferred:
	Foreign		(128.2	)		(51.2	)		(23.1	)

Total deferred			(128.2	)		(51.2	)		(23.1	)

		$	(128.1	)	$	(50.9	)	$	(22.9	)

F-31

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

16. Income Taxes (continued)

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

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


		December 31,

		2002			2001

		(in millions)
Deferred tax liabilities:
	Intangibles	$	15.9		$	23.0
	Fixed assets		135.5			139.4
	Accounts receivable		74.3			—
	Other		0.3			2.2

Total deferred tax liabilities			226.0			164.6
Deferred tax assets:
	Net operating losses		788.1			208.4
	Investment and other		103.9			59.7

Total deferred tax assets			892.0			268.1
Valuation allowance for deferred tax assets			(696.7	)		(247.7	)

Net deferred tax assets			195.3			20.4

Net deferred tax (assets) liabilities		$	30.7		$	144.2

At December 31, 2002, Old NTL had a valuation allowance against its deferred tax assets to the extent it was not more likely than not that such assets would be realized in the future.

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

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

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

F-32

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

16. Income Taxes (continued)

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


		Year Ended December 31,

		2002			2001			2000

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

		$	(128.1	)	$	(50.9	)	$	(22.9	)

17. Fair Values of Financial Instruments

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

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

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

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

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

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


		December 31, 2002				December 31, 2001

		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value

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

F-33

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

18. Related Party Transactions

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

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

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

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

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

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

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

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

F-34

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

18. Related Party Transactions (continued)

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

19. Shareholder’s Equity

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

Description of Capital Stock

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

Description of Common Stock

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

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

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

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

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

F-35

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

19. Shareholder’s Equity (continued)

Description of Preferred Stock

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

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

Description of the 10% Fixed Coupon Redeemable Preferred Stock

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

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

	•		senior to all classes of the Company’s Common Stock, the Company’s Series A Junior Participating Preferred Stock and to each other class of capital stock or series of preferred stock that are designated to rank junior to the Preferred Stock;

	•		junior to all classes of preferred stock that are designated to rank senior to the Preferred Stock; and

	•		equal to all classes of preferred stock that are designated to rank equally with the Preferred Stock.

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

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

F-36

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

19. Shareholder’s Equity (continued)

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

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

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

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

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

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

F-37

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

19. Shareholder’s Equity (continued)

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

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

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

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

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

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

F-38

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

19. Shareholder’s Equity (continued)

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

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

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

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

	•		senior to all classes of the Common Stock and to each other class of capital stock or series of the Company’s preferred stock that are designated to rank junior to the Series A Junior Participating Preferred Stock;

	•		junior to the Preferred Stock and all classes of the Company’s preferred stock that are designated to rank senior to the Series A Junior Participating Preferred Stock; and

	•		equal to all classes of the Company’s preferred stock that are designated to rank equally with the Series A Junior Participating Preferred Stock.

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

	•		$10.00; and

	•		1,000 times the aggregate amount per share of all dividends declared on the Common Stock since the immediately preceding dividend payment date.

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

F-39

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

19. Shareholder’s Equity (continued)

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

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

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

Stockholder Rights Agreement

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

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

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

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

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

F-40

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

19. Shareholder’s Equity (continued)

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

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

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

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

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

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

F-41

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

19. Shareholder’s Equity (continued)

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

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

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

Stock Splits

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

Sales of Preferred Stock and Common Stock

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

Series Preferred Stock

In December 1998, Old NTL issued 52,000 shares of its now canceled 9.9% Non-voting Mandatorily Redeemable Preferred Stock, Series B (the “Series B Preferred Stock”) in connection with an acquisition. Each share of Series B Preferred Stock had a stated value of $1,000. Cumulative dividends accrued at 9.9% of the stated value per share. Dividends were payable when and if declared by the Board of Directors. In June 2000, all of the outstanding shares of the Series B Preferred Stock were converted into 903,000 shares of Old NTL’s common stock.

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

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

F-42

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

19. Shareholder’s Equity (continued)

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


	9.9%
	Series B			5.25%			5%

Balance, December 31, 1999		52,000			525,000			755,000
Issued for cash		—			—			2,000,000
Issued for dividends		—			3,000			103,000
Conversion into common stock		(52,000	)		(528,000	)		—

Balance, December 31, 2000		—			—			2,858,000
Issued for dividends		—			—			105,000

Balance, December 31, 2001 and 2002		—			—			2,963,000

Warrants

Old NTL had the following now canceled warrants outstanding as of December 31, 2002: (a) warrants to purchase an aggregate of 243,000 shares of common stock at $15.22 per share issued in 1996 that expire in 2006 (256,000 were originally issued), (b) warrants to purchase an aggregate of 997,000 shares of common stock at $27.77 per share issued in 1998 that expire in 2008 (1,197,000 were originally issued) and (c) warrants to purchase an aggregate of 1,875,000 shares of common stock at $53.76 per share issued in 1999 that expire in 2004 (1,875,000 were originally issued). These warrants were canceled on the Effective Date pursuant to the Plan.

Stock Options

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

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

There were 16,000 shares and 67,000 shares of common stock reserved for issuance under 1991 and 1993 Non-Employee Director Stock Option Plans, respectively. Under the terms of these plans, options would be granted to members of the Board of Directors who were not employees of Old NTL or any of its affiliates. These plans provided that all options would be granted at the fair market value of Old NTL’s common stock on the date of grant, and options would expire ten years after the date of the grant. Options were exercisable as to 20% of the shares subject thereto on the date of grant and became exercisable as to an additional 20% of the shares subject thereto on each subsequent anniversary of the grant date while the optionee remained a director of Old NTL. Options expired ten years after the date of the grant.

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

In December 2000, the Board of Directors of Old NTL approved the rescission of the exercise of ISOs for 156,000 shares of Old NTL’s common stock, and Old NTL returned cash of $1.1 million. The rescission was accounted for as a modification of the original options that resulted in a new measurement date. On the new measurement date, Old NTL recognized no compensation expense.

F-43

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

19. Shareholder’s Equity (continued)

Pro forma information regarding net loss and net loss per share is required by SFAS No. 123, and has been determined as if Old NTL had accounted for its employee stock options under the fair value method of that Statement. The fair value for these options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for 2002, 2001 and 2000: risk-free interest rates of 4.47%, 4.47% and 5.30%, respectively, dividend yield of 0%, volatility factor of the expected market price of Old NTL’s common stock of .702, .702 and .385, respectively, and a weighted-average expected life of the option of 10 years.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because Old NTL’s stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options.

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


	Year Ended December 31,

	2002			2001			2000

	(in millions, except per share amounts)
Net (loss)	$	(3,454.9	)	$	(14,241.3	)	$	(2,963.7	)
Pro forma net (loss)	$	(3,719.2	)	$	(14,509.6	)	$	(3,219.5	)
Basic and diluted net (loss) per share		(13.02	)		(52.78	)		(14.54	)
Basic and diluted pro forma net (loss) per share		(13.97	)		(53.75	)		(15.72	)

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


	2002					2001					2000

				Weighted-					Weighted-					Weighted-
				Average					Average					Average
	Number of			Exercise		Number of			Exercise		Number of			Exercise
	Options			Price		Options			Price		Options			Price

	(in millions)					(in millions)					(in millions)
Outstanding — beginning of year		71.9		$	36.13		61.4		$	41.52		29.2		$	24.60
Granted		—			—		14.3			12.55		34.8			54.90
Exercised		—			—		(1.1	)		11.93		(2.1	)		17.13
Forfeited		(3.7	)		39.09		(2.7	)		42.46		(0.5	)		83.31

Outstanding — end of year		68.2		$	36.06		71.9		$	36.13		61.4		$	41.52

Exercisable at end of year		34.3		$	30.37		24.7		$	27.50		16.3		$	21.82

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

F-44

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

19. Shareholder’s Equity (continued)

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


		Stock Options Outstanding					Stock Options Exercisable

				Weighted-	Weighted-				Weighted-
				Remaining	Average				Average
Range of		Number of		Contractual	Exercise		Number of		Exercise
Exercise Prices		Options		Life	Price		Options		Price

		(in millions)					(in millions)
$0.35 to $9.36			4.4	3.1 Years	$	5.434		4.3	$	5.434
$10.00 to $18.40			14.8	4.2 Years	$	11.136		8.0	$	12.082
$19.86 to $27.84			12.9	6.6 Years	$	23.395		8.2	$	23.305
$28.06 to $35.64			0.6	6.3 Years	$	30.372		0.5	$	30.477
$36.12 to $40.19			0.8	7.2 Years	$	38.823		0.5	$	38.629
$42.44 to $47.44			13.0	7.4 Years	$	44.437		4.5	$	44.397
$48.38 to $53.76			4.6	6.6 Years	$	50.383		3.2	$	50.400
$57.60 to $63.63			16.6	6.8 Years	$	63.409		4.7	$	62.986
$68.20 to $75.56			0.1	7.1 Years	$	75.413		0.1	$	75.401
$91.13 to $97.50			0.4	7.1 Years	$	93.713		0.3	$	93.713

	Total		68.2					34.3

As of December 31, 2002, Old NTL had 171.8 million shares of its common stock reserved for issuance upon the exercise of warrants and stock options and the conversion of debt and preferred stock, all of which have now been canceled.

20. Employee Benefit Plans

Cablecom operates a defined benefit pension plan in Switzerland. The assets of the Plan are held separately from those of the Company and are invested in specialized portfolios under the management of an investment group. The pension cost is calculated using the attained age method.

F-45

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

20. Employee Benefit Plans (continued)

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


	Year Ended
	December 31,

	2002			2001

	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	145.7		$	122.2
Disposition		(21.8	)		—
Service cost		7.4			7.4
Interest cost		6.3			5.5
Actuarial losses (gains)		10.3			12.4
Benefits paid		(4.2	)		(3.1	)
Foreign currency exchange rate changes		12.7			1.2

Benefit obligation at end of year	$	156.4		$	145.6

Change in plan assets
Fair value of plan assets at beginning of year	$	142.3		$	151.0
Disposition		(15.8	)		—
Actual return on plan assets		(30.9	)		(15.0	)
Company contributions		4.7			4.5
Plan participants’ contributions		3.5			3.4
Benefits paid		(4.2	)		(3.1	)
Foreign currency exchange rates changes		12.4			1.5

Fair value of plan assets at end of year	$	112.0		$	142.3

Funded status of the plan	$	(44.5	)	$	(3.4	)
Unrecognized net actuarial (gains) losses		61.3			17.8
Unrecognized transition obligation		0.5			0.8

Net amount recognized	$	17.3		$	15.2

Amounts recognized in the statement of financial position consist of:
Prepaid benefit cost	$	16.8		$	14.4
Accrued benefit liability		(30.5	)		—
Intangible asset		1.0			0.8
Accumulated other comprehensive loss		30.0			—

Net amount recognized	$	17.3		$	15.2


		Year Ended December 31,

		2002			2001

Actuarial assumptions:
	Discount rate		4.00	%		4.50	%
	Rate of compensation increase		1.00	%		2.00	%
	Expected long-term rate of return on plan assets		4.00	%		5.50	%

F-46

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

20. Employee Benefit Plans (continued)

The components of net pension costs are as follows:


	Year Ended December 31,

	2002			2001			2000

	(in millions)
Service cost	$	7.4		$	7.4		$	6.1
Interest cost		6.3			5.5			5.5
Expected return on plan assets		(6.3	)		(8.7	)		(13.7	)
Plan participants’ contributions		(3.5	)		(3.4	)		(2.8	)
Net amortization and deferral		—			(0.5	)		4.0

	$	3.9		$	0.3		$	(0.9	)

21. Leases

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


	Operating
	Leases

Year ending December 31:
2003	$	4.8
2004		5.1
2005		5.1
2006		5.3
2007		5.5
Thereafter		6.9

Total minimum lease payments	$	32.7

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

22. Commitments and Contingent Liabilities

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


	Year Ending December 31:

2003	$	73.1
2004		9.2
2005		9.2
2006		1.4
2007		1.4

	$	94.3

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

F-47

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

22. Commitments and Contingent Liabilities (continued)

Morgan Stanley

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

B2 (Bredband) AG

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

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