UNITEDTable STATES SECURITIESof AND EXCHANGE COMMISSION Washington D.C. 20549Contents

~~FORM~~UNITED ~~10-Q~~STATES SECURITIES AND EXCHANGE COMMISSION

~~Quarterly~~Washington ~~Report~~D.C. ~~Pursuant to~~20549 ~~Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For~~FORM ~~the quarterly period ended June~~10-Q ~~30, 2003~~ ~~Commission File Number 0-30673~~

~~NTL~~Quarterly ~~EUROPE, INC. (Exact~~Report ~~name~~Pursuant to Section 13 or 15(d) of ~~registrant~~the asSecurities ~~specified~~Exchange inAct ~~its~~of ~~charter)~~1934

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 offices)	(Zip code)


For the quarterly period ended September 30, 2003		Commission File Number 0-30673

~~Registrant’s~~NTL ~~telephone number~~EUROPE, ~~including~~ ~~area code: (914) 921-1800~~INC.

~~Indicate by check mark whether the registrant~~ (1)Exact ~~has~~name ~~filed all reports required to be filed by Section 13 or 15(d)~~ of ~~the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the~~ registrant ~~was~~as ~~required~~specified toin ~~file such~~its ~~reports~~charter)~~, and (2) has been subject to such filing requirements for the~~ ~~past 90 days. YES NO~~

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Act. YES NO


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 offices)		(Zip code)

~~Indicate~~Registrant’s bytelephone ~~check mark whether the registrant has filed all documents and reports required to be filed by Section 12~~number, 13including orarea 15code: (d914) ~~of the Securities Exchange Act of 1934 subsequent to the~~ 921-1800 ~~distribution of securities under a plan by a court. YES NO~~

~~Number~~Indicate ofby ~~shares~~check ~~outstanding~~mark atwhether the registrant (1) has filed all reports ~~September~~required to be filed by Section 13 or 15,(d) ~~2003:~~of ~~19,657,769~~the ~~shares~~Securities and Exchange Act of ~~Common~~1934 ~~Stock~~during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), ~~par~~and ~~value~~(2) has ~~$.01~~been ~~per~~subject to such ~~share~~filing requirements for the past 90 days. YES x NO o

~~NTL~~Indicate ~~EUROPE, INC. INDEX~~by TOcheck ~~FORM~~mark ~~10-Q~~whether ~~FOR~~the ~~THE~~registrant ~~QUARTER~~is an accelerated filer as ~~ENDED~~defined ~~JUNE~~in ~~30,~~Rule 12b-2 ~~2003~~of the Act. YES o NO x

PART I:	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2003 (Unaudited) and December 31, 2002 (Audited)	2
	Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2003 and 2002 (Unaudited)	4
	Condensed Consolidated Statement of Shareholders’ (Deficiency) for the six months ended June 30, 2003 and 2002 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45
RISK FACTORS		46
PART II:	OTHER INFORMATION
Item 1.	Legal Proceedings	53
Item 2.	Changes in Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Submission of Matters to a Vote of Security Holders	53
Item 5.	Other Information	53
Item 6.	Exhibits and Reports on Form 8-K	53
SIGNATURES		55

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan by a court. YES x NO o

~~PART~~Number Iof shares outstanding at November 5, 2003: ~~FINANCIAL~~19,660,505 ~~INFORMATION~~shares of Common Stock, par value $.01 per share.

~~Item~~TABLE 1:OF ~~Financial Statements~~CONTENTS

NTL Europe, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (amounts in millions)


PART I:FINANCIAL INFORMATION
	Item 1: Financial Statements
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Operations
		Condensed Consolidated Statement of Shareholders’ (Deficiency)
		Consolidated Statements of Cash Flows
	Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Item 3. Quantitative and Qualitative Disclosures About Market Risk.
	Item 4. Controls and Procedures.
PART II: OTHER INFORMATION
	Item 1. Legal Proceedings.
	Item 2. Changes in Securities and Use of Proceeds.
	Item 3. Defaults Upon Senior Securities.
	Item 4. Submission of Matters to a Vote of Security Holders.
	Item 5. Other Information.
	Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
CERTIFICATION OF CEO
CERTIFICATION OF CFO
CERTIFICATION OF CEO
CERTIFICATION OF CFO

	June 30, 2003 Reorganized Company		December 31, 2002 Predecessor Company (see note)
	(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	148.1	$	277.5
Marketable securities		—		17.3
Accounts receivable – trade, less allowance for doubtful accounts of $11.0 (2003) and $9.4 (2002)		73.6		243.4
Other		74.5		50.3
Discontinued operations		—		12,968.1
Total current assets		296.2		13,556.6
Fixed assets, net		1,157.3		1,682.1
Goodwill		—		218.7
Reorganization value in excess of amounts allocable to identifiable assets		221.5		—
Customer lists, net of accumulated amortization of $5.6 (2003) and $171.4 (2002)		208.9		62.8
Investments in and loans to affiliates, net		21.0		13.0
Deferred tax asset		91.8		195.3
Other assets, net of accumulated amortization of $62.4 (2002)		19.3		120.9
Total assets	$	2,016.0	$	15,849.4

2NTL EUROPE, INC.

~~Back~~INDEX toTO ~~Index~~FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2003.

NTL Europe, Inc. and Subsidiaries Condensed Consolidated Balance Sheets – continued (amounts in millions)


	PART I: FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2003 (Unaudited) and December 31, 2002 (Audited)	2
	Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2003 and 2002 (Unaudited)	4
	Condensed Consolidated Statement of Shareholders’ (Deficiency) for the nine months ended September 30, 2003 and 2002 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2003 and 2002 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	46
RISK FACTORS		47
	PART II: OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 2.	Changes in Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Submission of Matters to a Vote of Security Holders	52
Item 5.	Other Information	52
Item 6.	Exhibits and Reports on Form 8-K	53
SIGNATURES		54

		June 30, 2003 Reorganized Company			December 31, 2002 Predecessor Company (see note)
		(unaudited)			(audited)
Liabilities and shareholders’ (deficiency)
Liabilities not subject to compromise
Current liabilities:
Accounts payable	$	32.7		$	49.3
Accrued expenses and other		68.5			92.5
Interest payable		9.6			43.5
Deferred revenue		145.9			235.6
Current portion of long-term debt		2,809.6			2,719.3
Discontinued operations (including liabilities subject to compromise of $10,157.8)		—			17,956.2
Total current liabilities		3,066.3			21,096.4
Other		132.3			132.7
Deferred income taxes		135.3			226.0
Liabilities subject to compromise, including redeemable preferred stock		—			4,294.1
Commitments and contingent liabilities
Mandatorily redeemable preferred stock – authorized 20.0 shares; issued and outstanding 6.9 shares, liquidation preference $360.2		114.7			—
Shareholders’ (deficiency):
Common stock – $.01 par value; authorized 60.0 shares; issued and outstanding 19.7 shares (2003); $.01 par value; authorized 800.0 shares; issued and outstanding 276.6 shares (2002)		0.2			2.8
Additional paid-in capital		—			13,574.9
Accumulated other comprehensive (loss)		3.7			(830.2	)
(Deficit)		(1,436.5	)		(22,647.3	)
		(1,432.6	)		(9,899.8	)
Total liabilities and shareholders’ (deficiency)	$	2,016.0		$	15,849.4

SeeTable accompanyingof notes.Contents

3PART I: FINANCIAL INFORMATION

~~Back~~Item 1: toFinancial ~~Index~~Statements

NTL Europe, Inc. and Subsidiaries Condensed Consolidated ~~Statements~~Balance ~~of Operations~~Sheets (~~unaudited) (~~amounts in millions~~, except per share amounts~~)

		Three months ended June 30,						Six months ended June 30,
							December 31, 2002
		2003			2002			2003			2002
			September 30, 2003				Predecessor Company
		~~Reorganized Company~~	Reorganized Company		~~Predecessor Company (see note)~~		(see note)	~~Reorganized Company~~			~~Predecessor Company (see note)~~
Revenues		$	122.7		$	100.2		$	242.3		$	188.8
			(unaudited)				(audited)
Costs and expenses
Assets
Operating expenses (exclusive of depreciation shown separately below)			46.7			38.0			90.9			82.2
Current assets:
Selling, general and administrative expenses			40.0			51.3			69.8			71.8
	Cash and cash equivalents		$	126.7			$	277.5
Asset impairments			—			12.9			—			12.9
	Marketable securities			–				17.3
Other charges			0.1			2.4			3.6			3.4
	Accounts receivable — trade, less allowance for doubtful accounts of $11.1 (2003) and $9.4 (2002)			50.1				243.4
Corporate expenses			4.5			4.3			9.2			11.2
	Other			78.4				50.3
Depreciation			46.7			49.0			92.4			94.9
	Discontinued operations			–				12,968.1
Amortization			3.0			18.9			5.5			36.7
Total current assets				255.2				13,556.6
			141.0			176.8			271.4			313.1
Fixed assets, net				1,164.3				1,682.1
Operating (loss)			(18.3	)		(76.6	)		(29.1	)		(124.3	)
Goodwill				–				218.7
Other income (expense)
Reorganization value in excess of amounts allocable to identifiable assets				226.5				–
Interest income and other, net			2.1			(3.4	)		2.0			7.9
Customer lists, net of accumulated amortization of $8.2 (2003) and $171.4 (2002)				211.3				62.8
Interest expense			(372.5	)		(39.1	)		(1,398.4	)		(86.0	)
Investments in and loans to affiliates, net				21.2				13.0
Share of (losses) from equity investments			(1.3	)		(37.5	)		(1.7	)		(86.7	)
Deferred tax asset				91.5				195.3
Foreign currency transaction gains			0.1			2.2			0.6			2.2
Other assets, net of accumulated amortization of $62.4 (2002)				15.0				120.9
(Loss) before recapitalization items, income taxes and discontinued operations			(389.9	)		(154.4	)		(1,426.6	)		(286.9	)
Total assets			$	1,985.0			$	15,849.4
Recapitalization items, net			—			(8.0	)		—			(21.7	)
(Loss) before income taxes and discontinued operations			(389.9	)		(162.4	)		(1,426.6	)		(308.6	)
Income tax benefit (expense)			(0.6	)		14.7			(1.3	)		25.5
(Loss) from continuing operations			(390.5	)		(147.7	)		(1,427.9	)		(283.1	)
Discontinued operations:
(Loss) from discontinued operations, net of income tax benefits of $6.3 and $18.8 (2002)			—			(408.4	)		—			(878.9	)
Net (loss)			(390.5	)		(556.1	)		(1,427.9	)		(1,162.0	)
Preferred stock dividends and accretion			(4.2	)		(43.5	)		(8.6	)		(141.9	)
Net (loss) available to common shareholders		$	(394.7	)	$	(599.6	)	$	(1,436.5	)	$	(1,303.9	)
Basic and diluted net (loss) per share:
(Loss) from continuing operations		$	(20.08	)	$	(0.69	)	$	(73.08	)	$	(1.54	)
(Loss) from discontinued operations			—			(1.48	)		—			(3.18	)
Net (loss) per common share		$	(20.08	)	$	(2.17	)	$	(73.08	)	$	(4.72	)
Weighted average shares			19,657,433			276,626,475			19,657,433			276,626,475
			January 1,
			2003
			Predecessor Company
Fresh start adoption – fixed assets		$	(507.2	)
Fresh start adoption – debt			1,313.2
Fresh start adoption – intangible assets			145.3
Fresh start adoption – deferred taxes			(13.5	)
Fresh start adoption – pensions			(31.2	)
Fresh start adoption – all other			(10.3	)
			896.3
Gain on discontinued operations			5,041.3
Gain on debt discharge			3,962.4
Net income		$	9,900.0
Basic and diluted net income per share		$	35.79

~~See accompanying notes.~~2

4Table of Contents

~~Back~~NTL toEurope, ~~Index~~Inc. and Subsidiaries Condensed Consolidated Balance Sheets — continued (amounts in millions)

NTL Europe, Inc. and Subsidiaries Condensed Consolidated Statement of Shareholders’ (Deficiency) (unaudited) (dollars in millions)


					December 31, 2002
		September 30, 2003			Predecessor Company
		Reorganized Company			(see note)

		(unaudited)			(audited)
Liabilities and shareholders’ (deficiency)
Liabilities not subject to compromise
Current liabilities:
	Accounts payable	$	49.1		$	49.3
	Accrued expenses and other		58.6			92.5
	Interest payable		12.1			43.5
	Dividends payable		17.2			–
	Deferred revenue		88.4			235.6
	Current portion of long-term debt		2,875.5			2,719.3
	Discontinued operations (including liabilities subject to compromise of $10,157.8)		–			17,956.2

Total current liabilities			3,100.9			21,096.4
Mandatorily redeemable preferred stock – authorized 20.0 shares; issued and outstanding 6.9 shares, liquidation preference $351.8			102.1			–
Other			145.0			132.7
Deferred income taxes			135.7			226.0
Liabilities subject to compromise, including redeemable preferred stock			–			4,294.1
Commitments and contingent liabilities
Shareholders’ (deficiency):
	Common stock — $.01 par value; authorized 60.0 shares; issued and outstanding 19.7 shares (2003); $.01 par value; authorized 800.0 shares; issued and outstanding 276.6 shares (2002)		0.2			2.8
	Additional paid-in capital		–			13,574.9
	Accumulated other comprehensive (loss)		(45.4	)		(830.2	)
	(Deficit)		(1,453.5	)		(22,647.3	)

			(1,498.7	)		(9,899.8	)

Total liabilities and shareholders’ (deficiency)		$	1,985.0		$	15,849.4

	Series Preferred Stock $.01 Par Value				Common Stock $.01 Par Value												Accumulated Other Comprehensive (Loss)
											Additional Paid-in Capital						Foreign Currency Translation			Unrealized Net Losses on Derivatives			Pension Liability Adjustments			(Deficit)
														Comprehensive (Loss)
	Shares			Par	Shares			Par
Predecessor Company
Balance, December 31, 2002	3,000,000		$	—	276,626,475		$	2.8		$	13,574.9					$	(770.1	)	$	(30.1	)	$	(30.0	)	$	(22,647.3	)
Net Income January 1, 2003													$	9,900.0												9,900.0
Issuance of Common Stock					19,657,433			0.2
Fresh-start adoptions – other	(3,000,000	)			(276,626,475	)		(2.8	)		(13,574.9	)					770.1		$	(30.1	)	$	(30.0	)		12,747.3
Reorganized Company
Balance, January 1, 2003	—			—	19,657,433			0.2			—						—			—			—			—
Accretion on mandatorily redeemable preferred stock																										(8.6	)
Comprehensive loss:
Net loss for the six months ended June 30, 2003													$	(1,427.9	)											(1,427.9	)
Currency translation adjustments														3.5			3.5
Unrealized losses on derivatives														0.2						0.2
Total													$	(1,424.2	)
Balance, June 30, 2003	—		$	—	19,657,433		$	0.2		$	—					$	3.5		$	0.2		$	—		$	(1,436.5	)

See accompanying notes.

~~See accompanying notes.~~3

5Table of Contents

~~Back~~NTL toEurope, ~~Index~~Inc. and Subsidiaries Condensed Consolidated Statements of Operations (unaudited) (amounts in millions, except per share amounts)

NTL Europe, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) (dollars in millions)


			Three months ended						Nine months ended
			September 30,						September 30,

			2003			2002			2003			2002

			Reorganized			Predecessor Company			Reorganized			Predecessor Company
			Company			(see note)			Company			(see note)

Revenues			$	123.7		$	109.7		$	366.0		$	298.5
Costs and expenses
Operating expenses (exclusive of depreciation shown separately below)				46.5			50.6			137.4			132.8
Selling, general and administrative expenses				27.3			28.4			97.1			100.2
Asset impairments				–			4.7			–			17.6
Other charges				2.8			0.1			6.4			3.5
Corporate expenses				4.1			3.2			13.3			14.4
Depreciation				45.6			53.4			138.0			148.3
Amortization				2.6			33.4			8.1			70.1

				128.9			173.8			400.3			486.9

Operating (loss)				(5.2	)		(64.1	)		(34.3	)		(188.4	)
Other income (expense)
Interest income and other, net				1.5			9.8			3.4			17.7
Interest expense				(13.6	)		(46.7	)		(1,412.0	)		(132.7	)
Share of (losses) from equity investments				(0.1	)		(81.4	)		(1.8	)		(168.1	)
Foreign currency transaction gains				0.5			4.7			1.2			6.9

(Loss) before recapitalization items, income taxes and discontinued operations				(16.9	)		(177.7	)		(1,443.5	)		(464.6	)
Recapitalization items, net				–			10.1			–			(11.6	)

(Loss) before income taxes and discontinued operations				(16.9	)		(167.6	)		(1,443.5	)		(476.2	)
Income tax benefit (expense)				(0.1	)		14.7			(1.4	)		40.2

(Loss) from continuing operations				(17.0	)		(152.9	)		(1,444.9	)		(436.0	)
Discontinued operations:
	(Loss) from discontinued operations, net of income tax benefits of $10.3 and $29.1 (2002)			–			(295.9	)		–			(1,174.8	)

Net (loss)				(17.0	)		(448.8	)		(1,444.9	)		(1,610.8	)
Preferred stock dividends and accretion				–			(1.6	)		(8.6	)		(143.5	)

Net (loss) available to common shareholders			$	(17.0	)	$	(450.4	)	$	(1,453.5	)	$	(1,754.3	)

Basic and diluted net (loss) per share:
		(Loss) from continuing operations	$	(0.86	)	$	(0.56	)	$	(73.94	)	$	(2.10	)
		(Loss) from discontinued operations		–			(1.07	)		–			(4.25	)

		Net (loss) per common share	$	(0.86	)	$	(1.63	)	$	(73.94	)	$	(6.35	)

		Weighted average shares		19,657,660			276,626,475			19,657,524			276,626,475

	Six months ended June 30,						January 1,
	January 1,
	2003			~~2002~~			~~2003~~
	Reorganized Company			Predecessor Company (see note)			Predecessor Company
	Predecessor
Operating activities
	Company
Net (loss) income	$	(1,427.9	)	$	(1,162.0	)	$	9,900.0
Fresh start adoption – fixed assets	$	(507.2	)
(Loss) from discontinued operations		—			(878.9	)		—
Fresh start adoption – debt		1,313.2
Gain on disposal of discontinued operations		—			—			5,041.3
Fresh start adoption – intangible assets		145.3
(Loss) income from continuing operations		(1,427.9	)		(283.1	)		4,858.7
Fresh start adoption – deferred taxes		(13.5	)
Adjustments to reconcile net (loss) to net cash provided by (used in) continuing operations:
Fresh start adoption – pensions		(31.2	)
Depreciation and amortization		98.0			131.6			—
Fresh start adoption – all other		(10.3	)
Asset impairments		—			12.9			—
		896.3
Write-off of other assets included in other income and expense		0.8			—			—
Gain on discontinued operations		5,041.3
Equity in losses of unconsolidated subsidiaries		1.7			86.7			—
Gain on debt discharge		3,962.4
Non-cash compensation		—			10.4			—
Net income	$	9,900.0
Loss (gain) on sale of assets		—			(3.2	)		—
Basic and diluted net income per share	$	35.79
Provision for losses on accounts receivable		1.4			3.3			—
Deferred income taxes		(1.5	)		(23.8	)		—
Non cash gain on debt discharge		—			—			(4,133.3	)
Fresh start adjustments		—			—			(896.3	)
Accretion on debt		1,345.0			—			—
Other		2.5			(173.4	)		—
Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions:
Accounts receivable		174.6			128.6			—
Other current assets		(21.1	)		(16.5	)		—
Other assets		11.1			(1.6	)		—
Accounts payable		(18.0	)		(13.4	)		—
Accrued expenses and other		(34.9	)		5.9			—
Deferred revenue		(95.3	)		(65.4	)		—
Net cash provided by (used in) continuing operations		36.4			(201.0	)		(170.9	)
Net cash provided by (used in) discontinued operations		—			240.1			—
Net cash provided by (used in) operating activities		36.4			39.1			(170.9	)
Investing activities
Acquisitions, net of cash acquired		—			(12.0	)		—
Purchase of fixed assets		(49.4	)		(45.0	)		—
Investments in and loans to affiliates		(1.5	)		(19.1	)		—
Increase in other assets		—			(0.3	)		—
Proceeds from sale of Australia		—			444.8			—
Proceeds from sales of assets		1.1			8.9			—
Purchase of marketable securities		—			(48.1	)		—
Proceeds from sales of marketable securities		—			12.1			—
Net cash (used in) continuing operations		(49.8	)		341.3			—
Net cash (used in) discontinued operations		—			(444.7	)		—
Net cash (used in) investing activities		(49.8	)		(103.4	)		—

6See accompanying notes.

~~Back to Index~~4

NTLTable Europe, Inc. and Subsidiaries Consolidated Statements of Cash Flows – continued (unaudited) (dollars in millions)Contents

	Six months ended June 30,						January 1,
	2003			2002			2003
	Reorganized Company			Predecessor Company			Predecessor Company
Financing activities
Proceeds from discontinued operations, upon emergence from bankruptcy		—			—			53.2
Proceeds from borrowings, net of financing costs		—			100.3			—
Principal payments		(0.7	)		(0.8	)		—
Repayment of NTL Australia bank loan		—			(121.7	)		—
Net cash (used in) provided by financing activities of continuing operations		(0.7	)		(22.2	)		53.2
Net cash (used in) provided by financing activities of discontinued activities		—			451.6			—
Net cash (used in) provided by financing activities		(0.7	)		429.4			53.2
Effect of exchange rate changes on cash		2.4			41.8			—
Increase (decrease) in cash and cash equivalents		(11.7	)		406.9			(117.7	)
Cash and cash equivalents at beginning of year – continuing operations		159.8			228.3			277.5
Cash and cash equivalents at beginning of year – discontinued operations		—			276.3			—
Cash and cash equivalents at end of period – discontinued operations		—			(553.0	)		—
Cash and cash equivalents at end of period – continuing operations	$	148.1		$	358.5		$	159.8
Supplemental disclosure of cash flow information
Cash paid during the period for interest exclusive of amounts capitalized	$	67.9		$	277.6		$	—
Income taxes paid		—			1.3			—

NTL Europe, Inc. and Subsidiaries
Condensed Consolidated Statement of Shareholders’ (Deficiency)
(unaudited)
(dollars in millions)

See accompanying notes.


																		Accumulated Other
																		Comprehensive
																		(Loss)
	Series Preferred Stock					Common Stock
	$.01 Par Value					$.01 Par Value						Additional						Foreign			Unrealized Net			Pension
												Paid-in			Comprehensive			Currency			Losses on			Liability
	Shares			Par		Shares			Par			Capital			(Loss)			Translation			Derivatives			Adjustments			(Deficit)

Predecessor Company
Balance, December 31, 2002		3,000,000		$	–		276,626,475		$	2.8		$	13,574.9					$	(770.1	)	$	(30.1	)	$	(30.0	)	$	(22,647.3	)
Net Income January 1, 2003															$	9,900.0												9,900.0
Issuance of Common Stock							19,657,433			0.2
Fresh-start adoptions – other		(3,000,000	)				(276,626,475	)		(2.8	)		(13,574.9	)					770.1		$	(30.1	)	$	(30.0	)		12,747.3

Reorganized Company
Balance, January 1, 2003		–			–		19,657,433			0.2			–						–			–			–			–
Shares issued upon conversion of old securities		–			–		336			–			–						–			–			–			–
Accretion on mandatorily redeemable preferred stock																												(8.6	)
Comprehensive loss:
Net loss for the nine months ended September 30, 2003															$	(1,444.9	)											(1,444.9	)
Currency translation adjustments																(37.0	)		(37.0	)
Unrealized losses on derivatives																(8.4	)					(8.4	)

Total															$	(1,490.3	)

Balance, September 30, 2003		–		$	–		19,657,769		$	0.2		$	–					$	(37.0	)	$	(8.4	)	$	–		$	(1,453.5	)

7See accompanying notes.

~~Back to Index~~5

1.Table Organizationof and BusinessContents

NTL’s ~~Completed~~Europe, ~~Restructuring~~Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) (dollars in millions)

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.


		Nine months ended
		September 30,						January 1,

		2003			2002			2003

					Predecessor
		Reorganized			Company			Predecessor
		Company			(see note)			Company

Operating activities
Net (loss) income		$	(1,444.9	)	$	(1,610.8	)	$	9,900.0
(Loss) from discontinued operations			–			(1,174.8	)		–
Gain on disposal of discontinued operations			–			–			5,041.3

(Loss) income from continuing operations			(1,444.9	)		(436.0	)		4,858.7
Adjustments to reconcile net (loss) to net cash provided by (used in) continuing operations:
	Depreciation and amortization		146.1			218.4			–
	Asset impairments		–			69.2			–
	Write-off of other assets included in other income and expense		0.8			–			–
	Equity in losses of unconsolidated subsidiaries		1.7			116.5			–
	Non-cash compensation		–			–			–
	Loss (gain) on sale of assets		–			(2.6	)		–
	Provision for losses on accounts receivable		1.3			4.0			–
	Deferred income taxes		(2.3	)		(40.4	)		–
	Non cash gain on debt discharge		–			–			(4,133.3	)
	Amortization of original issue discount		–			11.4			–
	Fresh start adjustments		–			–			(896.3	)
	Accretion on debt		1,338.0			–			–
	Accretion on madatorily redeemable preferred stock		4.6			–			–
	Other		4.0			7.7			–
Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions:
	Accounts receivable		197.9			157.2			–
	Other current assets		(23.2	)		(7.9	)		–
	Other assets		15.6			(61.4	)		–
	Accounts payable		(2.5	)		(1.0	)		–
	Accrued expenses and other		(43.2	)		(22.0	)		–
	Deferred revenue		(154.0	)		(122.4	)		–

Net cash provided by (used in) continuing operations			39.9			(109.3	)		(170.9	)
Net cash provided by (used in) discontinued operations			–			85.9			–

Net cash provided by (used in) operating activities			39.9			(23.4	)		(170.9	)
Investing activities
Acquisitions, net of cash acquired			–			–			–
Purchase of fixed assets			(75.7	)		(74.0	)		–
Investments in and loans to affiliates			(1.4	)		(15.3	)		–
Increase in other assets			–			(8.9	)		–
Proceeds from sale of Australia			–			428.8			–
Proceeds from sales of assets			1.1			8.9			–
Purchase of marketable securities			–			(52.8	)		–
Proceeds from sales of marketable securities			–			41.9			–

Net cash (used in) continuing operations			(76.0	)		328.6			–
Net cash (used in) discontinued operations			–			(847.1	)		–

Net cash (used in) investing activities			(76.0	)		(518.5	)		–

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 certain European and other assets of Old NTL (the “Company”). The6 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 cancelled, 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.~~

NewTable 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; New NTL has been completely removed from the Company’s consolidated financial statements, as part of the emergence from bankruptcy and application of Fresh Start Accounting, effective January 1, 2003.Contents

~~With the separation of Old~~ NTL ~~into two entities~~Europe, ~~the~~Inc. ~~majority of the significant assets~~ and ~~holdings~~Subsidiaries Consolidated ~~formerly~~Statements ~~owned and consolidated by Old NTL were retained by New NTL. Generally, other than Cablecom GmbH, an indirect, wholly-owned subsidiary~~ of ~~the~~Cash ~~Company~~Flows – continued (~~“Cablecom”~~unaudited) (~~which~~dollars is itself being restructured as described below), the Company’s assets are not material compared to those of New NTL. 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~~millions) ~~to be acquired or eliminated.~~

The Company’s board of directors and management are exploring the strategic and financial alternatives available to the Company, including the Company’s possible liquidation, a going-private transaction and the sale of its remaining assets. In that regard, the board established a special committee charged with reviewing, considering, investigating, evaluating, negotiating and recommending action to the entire board with respect to one or more possible going private transactions. By July 1, 2003, the special committee had retained its own legal counsel and financial advisor to advise it in connection with its duties.


	Nine months ended
	September 30,						January 1,

	2003			2002			2003

	Reorganized Company			Predecessor Company			Predecessor Company

Financing activities
Proceeds from discontinued operations, upon emergence from bankruptcy		–			–			53.2
Proceeds from borrowings, net of financing costs		–			102.5			–
Principal payments		(0.7	)		(1.4	)		–
Repayment of NTL Australia bank loan		–			(121.7	)		–

Net cash (used in) provided by financing activities of continuing operations		(0.7	)		(20.6	)		53.2
Net cash (used in) provided by financing activities of discontinued activities		–			809.2			–

Net cash (used in) provided by financing activities		(0.7	)		788.6			53.2
Effect of exchange rate changes on cash		3.7			41.8			–

Increase (decrease) in cash and cash equivalents		(33.1	)		288.5			(117.7	)
Cash and cash equivalents at beginning of year – continuing operations		159.8			228.3			277.5
Cash and cash equivalents at beginning of year – discontinued operations		–			276.3			–
Cash and cash equivalents at end of period – discontinued operations		–			(485.1	)		–

Cash and cash equivalents at end of period – continuing operations	$	126.7		$	308.0		$	159.8

Supplemental disclosure of cash flow information
Cash paid during the period for interest
Exclusive of amounts capitalized	$	81.5		$	485.3		$	–
Income taxes paid		–			1.3			–

~~The~~See ~~Company’s~~accompanying historic financial statements presented herein are not particularly reflective of the Company’s current and anticipated future business and should not be relied upon as indicative of the Company’s future performance.notes

BackTable toof IndexContents

~~Historical~~1. ~~Structure~~Organization ofand ~~the Company~~Business

OnRecent May 18, 2000, the entity then known as NTL Incorporated (currently named Parc Holdings, Inc. (but until August 4, 2003 known as NTL (Delaware), Inc.) (“Parc Holdings”)) completed a corporate restructuring to create a holding company structure. The formation of the holdingDevelopments company was part of Parc Holdings’ acquisition of certain assets of Cable & Wireless Communications plc. The holding company restructuring was accomplished through a merger so that all the stockholders of Parc Holdings at the effective time of the merger became stockholders of the new holding company, and Parc Holdings 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. but on August 4, 2003 changed its name to Parc Holdings, Inc.~~

~~The~~On ~~Company~~November 12, ~~conducts~~2003, ~~its~~Cablecom ~~operations~~(as ~~through~~defined ~~direct~~below) completed a restructuring of its debt and ~~indirect~~equity. ~~wholly-owned~~As ~~subsidiaries~~a result, effective as of the close of business on November 19, 2003, the Company (as defined below) expects to have no further ownership interest in Cablecom. Also, in connection with the restructuring, the Company expects to receive a payment of $15 million. (See Note 19 – “Cablecom Restructuring.”)

~~Business~~The Company’s board of directors and management have been exploring the strategic and financial alternatives available to the Company. In that regard, on September 30, 2003, the board approved a 1-for-50,000 reverse stock split of the Common Stock (as defined below) and payment of $.01 per share, on a pre-split basis, for fractional shares. If approved by a majority of the Company’s stockholders, the consummation of the reverse stock split is expected to reduce the number of holders of Common Stock to below 300 thereby permitting the Company to terminate its registration under the Securities Act of 1933, as amended. The number of holders of Preferred Stock (as defined below) is already below 300. Accordingly, after the effective date of the reverse stock split, the Company intends to terminate the registration of the Common Stock and Preferred Stock and cease being a public company. (See Note 18 – “Reverse Stock Split.”)

~~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”) exploits sports-related Internet and media rights in the United Kingdom. Cablecom is the largest cable 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 Spain. NTL Broadcast (Thailand) Ltd. and NTL Broadcast Sdn, Ltd., together with New NTL’s ~~branch~~Completed ~~office in Singapore, offer operations and maintenance services, design and build, consultancy and system~~Restructuring ~~integration services to broadcasters in Malaysia and Thailand.~~

~~Cablecom~~On ~~has approximately CHF 3~~May 8,~~792~~ ~~million in bank debt (which includes recently accrued interest payments) that initially matured on April 30~~2002, ~~2003 but~~ the ~~lenders~~entity ~~have~~then ~~extended~~known ~~such~~as ~~due~~NTL ~~date~~Incorporated ~~until~~(“Old ~~October~~NTL”) ~~31, 2003. Cablecom has insufficient resources to satisfy such obligation. In addition, Cablecom~~ and certain of its subsidiaries ~~are~~as ~~“overindebted”~~of ~~under~~that ~~Swiss~~time ~~law~~each ~~and,~~filed ~~accordingly,~~a ~~may~~pre-arranged joint bereorganization ~~required~~plan to(the ~~file~~“Plan”) ~~for~~under ~~insolvency~~Chapter 11 ~~proceedings~~of inthe ~~Switzerland~~U.S. Bankruptcy ~~Cablecom~~Code. ~~and~~Old ~~its~~NTL’s ~~lenders~~operating ~~have~~subsidiaries ~~been~~were ~~involved~~not included in the ~~ongoing~~Chapter 11 ~~discussions~~filing. ~~regarding~~The aPlan ~~complete~~became ~~financial~~effective ~~restructuring of Cablecom and,~~ on ~~June 19~~January 10, 2003, ~~Cablecom’s board of directors had been advised that 100% of its lenders and other holders of economic interests in Cablecom’s bank debt have agreed upon~~ (the “Effective ~~principal~~Date”) ~~terms~~at ~~and~~which ~~parameters~~time ~~for~~Old ~~the~~NTL ~~restructuring~~emerged offrom ~~that debt~~Chapter 11 reorganization.

Pursuant to the Plan, Old NTL and its subsidiaries were split into two separate companies. The ~~principal~~entity ~~terms~~formerly ~~for~~known as “NTL Incorporated” was renamed “NTL Europe, Inc.” and became the ~~financial~~holding ~~restructuring~~company ~~are:~~for •certain European and other assets of Old NTL (the “Company”). The ~~outstanding~~entity formerly known as NTL Communications Corp. was renamed “NTL Incorporated” and became the holding company for Old NTL’s principal ~~amount~~UK and Ireland assets (“New NTL”). Pursuant to the Plan, all of the outstanding ~~debt~~securities ~~would~~of beOld ~~reduced~~NTL ~~from~~and ~~approximately~~certain ~~CHF~~of 3its subsidiaries were cancelled, and the Company issued shares of its common stock, par value $0.801 ~~billion~~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 ~~approximately~~various former ~~CHF~~creditors 1and stockholders of Old NTL and its subsidiaries.7 ~~billion~~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 ~~The~~NTL ~~facility~~has ~~would~~been beaccounted ~~split~~for ~~into~~as ~~two~~a ~~tranches,~~discontinued ~~one~~operation beginning with athe ~~final~~quarter ~~maturity~~ended ~~date~~September 30, 2002 and, accordingly, it is excluded from assets and liabilities of ~~December~~continuing operations as of December 31, ~~2009~~2002. ~~and~~New ~~one~~NTL ~~with~~has abeen ~~final~~completely ~~maturity~~removed ~~date~~from the Company’s consolidated financial statements, as part of ~~June~~the 30emergence from bankruptcy and application of Fresh Start Accounting, ~~2010~~effective January 1, 2003.

•With ~~Cablecom’s~~the ~~lenders~~separation ~~would~~of ~~acquire~~Old ~~control~~NTL ofinto ~~substantially~~two ~~all~~entities, the majority of ~~Cablecom’s~~the significant ~~share~~assets ~~capital,~~and ~~with~~holdings ~~the~~formerly ~~Company’s~~owned ~~remaining~~and ~~interest~~consolidated ~~being~~by ~~acquired~~Old NTL were retained by ~~certain~~New ~~members~~NTL. Generally, other than Cablecom GmbH, an indirect, wholly-owned subsidiary of the ~~new~~Company ~~shareholder group.~~(“Cablecom”)

~~• At the time of the consummation of the restructuring, the additional equity capital would be raised through a rights offering to the new shareholder group.~~8

TheTable proposed restructuring is subject to various closing conditions, including the negotiation, completion and execution of definitive documentation. Cablecom’s lenders have also agreed to a moratorium on the payment of interest and commitment commission accruing between May 30, 2003 and the date on which Cablecom’s credit agreement is restated as part of the financial restructuringContents

9(which itself has recently been restructured as described below), the Company’s assets are not material compared to those of New NTL.

~~Back~~The toCompany’s ~~Index~~historic financial statements presented herein are not particularly reflective of the Company’s current and anticipated future business and should not be relied upon as indicative of the Company’s future performance.

~~(when~~Historical aStructure ~~portion~~ of the accrued amounts will be added to the principal amount of the facility). If Cablecom is subject to an insolvency proceeding before its credit agreement is restated, Cablecom’s lenders have agreed to waive such interest and commitment commission.Company

InOn ~~the~~May 18, ~~event that the proposed restructuring is completed~~2000, the ~~Company~~entity ~~expects~~then ~~that~~known ~~its~~as ~~remaining~~NTL ~~interest~~Incorporated in(currently named ~~Cablecom~~Parc ~~will~~Holdings, beInc. ~~acquired~~(but ~~for~~until anAugust 4, ~~amount~~2003 ~~not~~known inas ~~excess~~NTL (Delaware), ~~of $15 million~~Inc.) If(“Parc ~~such~~Holdings”)) ~~proposed~~completed ~~restructuring~~a iscorporate ~~unsuccessful, the Company expects~~ restructuring to becreate ~~deprived~~a ofholding ~~all~~company ~~its ownership interest in Cablecom~~structure. ~~Accordingly,~~The ~~the~~formation ~~Company~~of ~~anticipates that, in~~ the ~~near~~holding company ~~future,~~was ~~the~~part ~~results~~ of ~~Cablecom~~Parc ~~will~~Holdings’ noacquisition ~~longer~~of becertain ~~reported~~assets ~~as part~~ of Cable ~~the~~& ~~Company’s~~Wireless ~~consolidated~~Communications ~~results of operations~~plc. InThe ~~that~~holding ~~regard,~~company itrestructuring was ~~should~~accomplished ~~also~~through bea ~~noted~~merger so that, inall ~~accordance with~~ the ~~terms~~stockholders of ~~the~~Parc Holdings ~~existing~~at ~~Cablecom~~the ~~credit~~effective ~~agreement,~~time noof ~~dividends~~the ormerger ~~distributions~~became ~~have~~stockholders ~~ever~~of ~~been~~the new orholding ~~will~~company, beand ~~made~~Parc byHoldings ~~Cablecom~~became toa ~~the~~subsidiary ~~Company.~~of ~~Further,~~ the ~~lenders~~new holding ~~under~~company. ~~Cablecom’s~~The ~~credit~~new ~~facility~~holding ~~have~~company nowas ~~legal~~called ~~recourse~~NTL toIncorporated (which ~~any~~is ~~assets~~now ofknown ~~the~~as NTL Europe ~~group~~, ~~other~~Inc.) ~~than~~and to the ~~shares~~holding ofcompany’s subsidiary ~~Cablecom,~~simultaneously ~~certain~~changed ~~assets~~its ofname ~~the~~to ~~Cablecom~~NTL ~~group~~(Delaware), ~~and~~Inc., ~~certain~~but on ~~assets~~August 4, of2003 ~~the~~changed ~~Company’s~~its ~~subsidiaries~~name ~~which~~to ~~hold,~~Parc ~~directly or indirectly~~Holdings, ~~the shares of the Cablecom group~~Inc.

The Company ~~also~~conducts ~~has~~its ~~various~~operations ~~equity~~through direct and ~~cost~~indirect wholly-owned ~~method investments detailed in Note 9~~subsidiaries.

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-upBusiness 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 16 “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 approximately $360.2 million in liquidation preference including accrued and unpaid dividends, as of June 30, 2003) have been redeemed. (See Note 13.)

2The Company, through its direct and indirect wholly-owned subsidiaries, owns and operates Premium TV Limited, NTL Lanbase, SL, NTL Broadcast (Thailand) Ltd., ~~Reorganization~~NTL Broadcast Sdn, Ltd and, ~~Emergence~~as ~~from~~of ~~Chapter~~September 30, 112003, Cablecom. Premium TV Limited (“Premium TV”) exploits sports-related Internet and media rights in the United Kingdom. Cablecom is the largest cable television operator in Switzerland, but, as discussed below, it was “overindebted” under Swiss law. In order to address that issue, on November 12, 2003, Cablecom completed a restructuring of its debt and equity. As a result of that restructuring, effective as of the close of business on November 19, 2003, the Company expects to have no further ownership interest in Cablecom. Also, in connection with the restructuring, on November 19, 2003, the Company expects to receive a payment of $15 million. (See Note 19 – “Cablecom Restructuring.”) Accordingly, Cablecom will be treated as a discontinued operation beginning in the fourth quarter of 2003.

~~Background~~NTL Lanbase, SL is based in Spain and is a value-added reseller of ~~Restructuring~~equipment for corporate data networks in Spain. NTL Broadcast (Thailand) Ltd. and NTL Broadcast Sdn, Ltd., together with New NTL’s branch office in Singapore, offer operations and maintenance services, design and build, consultancy and system integration services to broadcasters in Malaysia and Thailand.

OnUntil ~~January~~its 31restructuring on November 12, ~~2002~~2003, ~~Old~~Cablecom ~~NTL~~had ~~announced~~approximately CHF 3,792 million in bank debt (which included recently accrued interest payments) that itinitially matured on April 30, 2003 and had ~~appointed~~been ~~professional~~extended ~~advisors~~to November 18, 2003. Prior to ~~advise~~the onNovember 12, ~~strategic~~2003 restructuring, Cablecom had insufficient resources to satisfy such obligation. In addition, prior to the November 12, 2003 restructuring, Cablecom and ~~recapitalization~~certain ~~alternatives~~of its subsidiaries were “overindebted” under Swiss law and, accordingly, but for the recent restructuring, could have been required to ~~strengthen~~file for insolvency proceedings in Switzerland. Accordingly, during the past year, Cablecom and its ~~balance~~lenders ~~sheet~~were involved in ongoing discussions regarding a complete financial restructuring of Cablecom. On June 19, ~~reduce~~2003, ~~debt~~Cablecom’s board of directors had been advised that 100% of its lenders and ~~put~~other anholders ~~appropriate~~of ~~capital~~economic ~~structure~~interests in ~~place~~Cablecom’s bank debt had agreed upon the principal terms and parameters for ~~its~~the restructuring ~~business~~of that debt.

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 financial9 ~~advisors.~~

OldTable 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.Contents

OnThe ~~April~~principal ~~16,~~terms ~~2002,~~for ~~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~~financial ~~recapitalization~~restructuring ~~plan, on May 8, 2002, Old NTL and~~were: certain of the other subsidiaries of Old NTL, namely Parc Holdings, 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

10• The outstanding principal amount of the debt would be reduced from approximately CHF 3.8 billion to approximately CHF 1.7 billion.

~~Back~~• toThe ~~Index~~facility would be split into two tranches, one with a final maturity date of December 31, 2009 and one with a final maturity date of June 30, 2010.

~~Cable~~• ~~Funding~~Cablecom’s ~~Corp.~~lenders ~~with~~would upacquire tocontrol ~~$500.0~~of ~~million~~substantially inall ~~new~~of ~~debt~~Cablecom’s ~~financing~~share ~~(Parc~~capital, ~~Holdings~~with ~~committed~~the toCompany’s ~~provide~~remaining upinterest tobeing anacquired ~~additional~~by ~~$130.0~~certain ~~million~~members ~~under~~of the ~~DIP~~new ~~facility~~shareholder group.)

As• aAt ~~result of~~ the ~~payment~~time ~~defaults,~~of ~~as well as~~ the ~~voluntary~~consummation ~~filing under Chapter 11 by Old NTL and certain~~ of ~~its~~the ~~subsidiaries~~restructuring, onthe ~~May~~additional 8,equity ~~2002,~~capital ~~there~~would ~~was~~be anraised ~~event~~through ofa ~~default~~rights ~~under~~offering ~~all~~to ~~of Old NTL and its subsidiaries’ credit facilities and~~ the ~~indentures~~new ~~governing~~shareholder ~~all of their publicly traded debt, other than debt of NTL (Triangle) LLC~~group.

~~The~~A ~~Plan~~restructuring ~~was~~of ~~confirmed~~Cablecom’s bydebt ~~the~~and ~~Bankruptcy~~equity ~~Court~~ on ~~September~~those 5,basic ~~2002.~~terms ~~During~~was completed ~~the~~on ~~fall of 2002~~November 12, ~~Old~~2003. ~~NTL~~As ~~negotiated with~~ a ~~group~~result, ofeffective ~~lenders~~November 19, to2003, the ~~enter~~Company ~~into~~will ano ~~new~~longer ~~financing~~have ~~arrangement~~any toremaining ~~repay~~interest ~~the~~in ~~DIP~~Cablecom ~~facility, to repay certain obligations~~ and tothe Company ~~provide~~expects ~~liquidity~~ to ~~Old~~receive ~~NTL~~a ~~and~~payment ~~its~~ of ~~subsidiaries~~$15 million. ~~The~~Accordingly, ~~Plan~~from ~~became~~and after ~~effective on January 10~~November 12, 2003, atthe ~~which~~results ~~time~~of ~~Old~~Cablecom ~~NTL~~will ~~emerged~~no ~~from~~longer ~~Chapter~~be 11reported as ~~reorganization.~~part Inof ~~connection~~the ~~with Old NTL~~Company’s ~~emergence~~consolidated ~~from~~results ~~Chapter 11 reorganization, NTL Communications Corp. issued $558.2 million aggregate principal face amount~~ of ~~19%~~operations ~~Senior Secured Notes due 2010~~ and ~~500,000~~Cablecom will ~~shares~~be oftreated ~~its~~as ~~common~~a ~~stock~~discontinued onoperation ~~January~~beginning ~~10, 2003. The proceeds were used~~ in ~~part to repay amounts outstanding under~~ the ~~DIP~~fourth ~~facility and to purchase from Parc Holdings a £90.0 million note~~ quarter of ~~NTL (UK) Group Inc~~2003. ~~and to repay~~ ~~certain other obligations.~~

~~Liquidity~~The Company also has various equity and ~~Capital~~cost ~~Resources~~method investments detailed in Note 9.

~~The~~Following ~~Company~~the ~~emerged~~closing ~~from~~of ~~bankruptcy~~the onCablecom ~~January 10~~restructuring, ~~2003,~~the atCompany ~~which~~is ~~time,~~continuing to asreview ~~part~~all of its other holdings to determine the ~~reorganization~~most ~~plan~~appropriate course of action, ~~all~~which may result in one or more of ~~its~~these ~~secured~~holdings ~~debt~~being sold, transferred, ~~common~~foreclosed ~~stock~~on, ~~and~~liquidated, ~~preferred~~wound-up ~~stock~~or ~~were~~otherwise ~~cancelled~~disposed ~~and~~of ~~new~~in the ~~Common~~near ~~Stock~~future ~~and~~or ~~Preferred~~at ~~Stock~~a ~~were~~later ~~issued~~date. ~~Further,~~The ~~upon~~Company ~~the~~may ~~consummation~~not receive any proceeds from any of these transactions after the payment of outstanding debt that some of ~~reorganization~~these ~~plan~~companies ~~(after~~may ~~taking~~owe ~~into~~and ~~account~~any fees and expenses incurred in connection with these transactions. To the ~~redemption~~extent ~~for~~the Company receives net cash ofproceeds from ~~$25~~any ~~million~~asset ofsale it or its subsidiaries complete, the Preferred Stock) ~~the~~will be ~~Company~~entitled ~~had~~to ~~approximately~~mandatory ~~$63~~redemption ~~million~~in a like amount, subject to some limited exceptions set forth in ~~cash~~the ~~and~~Company’s ~~its~~charter, ~~subsidiaries~~until ~~(other~~all ~~than~~shares ~~Cablecom)~~of ~~had~~the Preferred anStock ~~additional~~(having ~~amount~~an aggregate of approximately $11 351.8 million in liquidation ~~cash.~~preference Asas of ~~June~~ September 30, 2003, ~~the~~exclusive ~~Company~~of ~~had~~dividends ~~approximately~~payable of $5717.3 2 million inat ~~cash~~September 30, ~~and~~2003, ~~its~~which ~~subsidiaries~~was paid on October 15, 2003) have been redeemed. (~~other~~See ~~than~~Note ~~Cablecom~~13.) ~~had~~Subject to the board of directors’ determination to retain an ~~additional~~appropriate ~~amount~~reserve, the net proceeds of ~~approximately~~the Company’s ~~$10~~expected $15 million payment in ~~cash~~connection with the Cablecom restructuring is expected to be subject to this mandatory redemption provision.

~~The Company is primarily a holding company for the stock of its subsidiaries, with no material independent source of cash proceeds~~2. ~~During~~Reorganization ~~2003,~~and ~~the~~Emergence ~~Company does not anticipate receiving any material cash proceeds~~ from ~~its subsidiaries’ operating activities. Accordingly, the~~Chapter 11 Company expects to fund its operations primarily out of its $57.3 million in cash ($17.2 million of which will be paid as a dividend on the Preferred Stock on October 15, 2003) 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.

~~The~~Background ~~Company expects to either complete a restructuring~~ of the debt and equity of Cablecom, in the near future, which is expected to result in the acquisition of the Company’s interest in Cablecom or a complete dilution of the Company’s ownership interest or, if such restructuring is notRestructuring successful, to file for the insolvency of Cablecom in Switzerland, which would result in the Company’s having no remaining ownership in Cablecom. The proposed restructuring is subject to various closing conditions, including the negotiation, completion and execution of definitive documentation. Cablecom’s lenders have also agreed to a moratorium on the payment of interest and commitment commission accruing between May 30, 2003 and the date on which Cablecom’s credit agreement is restated as part of the financial restructuring (when a portion of the accrued amounts will be added to the principal amount of the facility). If Cablecom is subject to an insolvency proceeding before its credit agreement is restated, Cablecom’s lenders have agreed to waive such interest and commitment commission.

InOn ~~the~~January 31, ~~event that the proposed restructuring is completed~~2002, ~~the~~Old ~~Company~~NTL ~~expects~~announced that ~~its~~it ~~remaining~~had ~~interest~~appointed inprofessional advisors ~~Cablecom~~to ~~will~~advise beon ~~acquired~~strategic ~~for~~and anrecapitalization ~~amount~~alternatives ~~not~~to instrengthen its ~~excess~~balance ~~of $15 million. If such proposed restructuring is unsuccessful~~sheet, ~~the~~reduce ~~Company~~debt ~~expects~~and toput bean ~~deprived~~appropriate ofcapital ~~all~~structure ~~its ownership~~in place ~~interest~~for inits ~~Cablecom~~business.

11Promptly 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.

~~Back~~Old NTL and its subsidiaries failed to ~~Index~~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.

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 credit10 agreement, no dividends or distributions 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.~~

TheTable Company’s management and board are exploring strategic and financial alternatives available to the Company, including the Company’s possible liquidation, a going private transaction and the sale of its remaining assets. In that regard, the board established a special committee charged with reviewing, considering, investigating, evaluating, negotiating and recommending action to the entire board with respect to one or more possible going private transactions. By July 1, 2003, the special committee had retained its own legal counsel and financial advisor to advise it in connection with its duties.Contents

~~During~~On ~~2003~~April 16, ~~the Company’s primary expenses are expected to consist of operating expenses of approximately $13.5 million~~2002, ~~including~~Old ~~salaries,~~NTL ~~professional~~announced ~~fees,~~that ~~insurance~~it and ~~severance~~an ~~costs,~~unofficial ascommittee ~~well as certain funding obligations to certain~~ of its ~~subsidiaries (but not including certain~~ bondholders ~~guarantees~~had toreached ~~the~~an ~~Company’s~~agreement ~~subsidiaries~~ in ~~the~~principle ~~aggregate~~on ~~amount~~a comprehensive recapitalization of ~~approximately~~Old ~~£4.2~~NTL ~~million).~~and ~~Further,~~its ~~after~~subsidiaries. ~~reserving~~To ~~for~~implement ~~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~~proposed recapitalization ~~Preferred Stock. In this regard~~plan, on ~~September 11~~May 8, ~~2003~~2002, ~~the~~Old ~~Company’s~~NTL ~~Board~~and certain of ~~Directors~~the ~~approved~~other subsidiaries ~~a semi-annual dividend~~ of ~~$2.50~~Old ~~per~~NTL, ~~share~~namely onParc ~~the~~Holdings, ~~Preferred~~NTL ~~Stock.~~Communications ~~However~~Corp., Diamond ~~there~~Cable isCommunications noLimited, ~~requirement~~Diamond ~~under~~Holdings ~~our~~Limited ~~charter to pay any future dividends on our Preferred Stock~~ and ~~there is no~~ Communications ~~assurance~~Cable ~~that~~Funding ~~we will pay any such future dividends~~Corp., ~~(See~~filed ~~Note~~cases 17and –a ~~“Subsequent~~pre-arranged ~~Events.”)~~joint reorganization Atplan ~~June~~under ~~30,~~Chapter 11 ~~2003,~~of the ~~liquidation preference of Preferred Stock aggregates approximately $360~~U.2S. ~~million~~Bankruptcy ~~including accrued and unpaid dividends~~Code. In connection ~~addition,~~with the ~~Preferred~~filing, ~~Stock~~some ismembers ~~also entitled to mandatory redemption out~~ of the ~~net~~unofficial ~~proceeds~~creditors’ committee of ~~any~~bondholders ~~asset~~entered ~~sale~~into ~~for~~a ~~cash~~credit ~~that~~facility ~~the~~agreement ~~Company~~(referred orto ~~its~~as ~~subsidiaries~~the “DIP ~~complete,~~facility”) ~~subject~~committing to ~~some~~provide ~~limited~~Communications ~~exceptions~~Cable ~~set~~Funding ~~forth~~Corp. inwith up ~~the~~to ~~Company’s charter~~$500.0 million ~~Accordingly,~~in itnew isdebt ~~highly~~financing ~~unlikely~~(Parc ~~that~~Holdings ~~common~~committed ~~shareholders~~to ~~will~~provide up ~~ever~~to ~~receive~~an ~~any~~additional ~~distribution~~ $130.0 million ~~related~~under tothe ~~their~~DIP ~~shares~~facility.)

~~The~~As ~~Company~~a ~~believes~~result ~~that~~of ~~its~~the ~~existing~~payment ~~cash~~defaults, ~~and~~as ~~cash~~well ~~equivalents~~as ~~will~~the bevoluntary ~~sufficient~~filing tounder Chapter 11 ~~support~~by Old NTL and certain of its ~~expected~~subsidiaries, ~~operations~~on ~~and~~May 8, ~~fund~~2002, there was an event of default under all of Old NTL and its ~~capital~~subsidiaries’ ~~commitments~~credit facilities ~~through~~and atthe ~~least~~indentures ~~July~~governing 1,all ~~2004,~~of ~~which,~~their aspublicly ~~previously~~traded ~~noted~~debt, other ~~will~~than ~~exclude~~debt ~~Cablecom~~of NTL (Triangle) LLC.

~~Basis~~The Plan was confirmed by the Bankruptcy Court on September 5, 2002. During the fall of ~~Presentation~~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 Parc Holdings a £90.0 million note of NTL (UK) Group Inc. and to repay certain other obligations.

~~The~~Liquidity ~~accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information~~ and ~~with~~Capital ~~the rules and regulations of the Securities and Exchange~~Resources Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated ~~financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.~~

The Company ~~operated~~emerged ~~its~~from ~~business~~bankruptcy ason aJanuary 10, ~~debtor-in-possession~~2003, ~~subject~~at towhich ~~the~~time, ~~jurisdiction~~as part of the ~~Bankruptcy~~reorganization ~~Court~~plan, ~~during~~all ~~the~~of ~~period~~its ~~from~~secured ~~May 8~~debt, ~~2002~~common ~~until~~stock ~~January~~and ~~10,~~preferred stock ~~2003.~~were ~~Accordingly~~cancelled and new Common Stock and Preferred Stock were issued. Further, upon the ~~Company’s~~consummation ~~consolidated~~of ~~financial~~the ~~statements~~reorganization plan (after taking into account the redemption for ~~periods~~cash ~~prior~~of to$25 million ~~its~~of ~~emergence~~the ~~from~~Preferred ~~Chapter~~Stock) 11the Company ~~reorganization~~had ~~were~~approximately ~~prepared~~$63 million in ~~accordance~~cash ~~with~~and ~~the~~its ~~American~~subsidiaries ~~Institute~~(other ofthan Cablecom) ~~Certified~~had ~~Public~~an ~~Accountants~~additional ~~Statement~~amount of ~~Position~~approximately ~~90-7~~$11 million in cash. As of September 30, ~~“Financial~~2003, ~~Reporting~~the byCompany ~~Entities~~had inapproximately ~~Reorganization~~$55.0 million ~~Under~~in ~~the~~cash ~~Bankruptcy~~and ~~Code”~~its subsidiaries (~~“SOP~~other ~~90-7”~~than Cablecom) had an additional amount of approximately $9.7 million Inin cash.

The Company is primarily a holding company for the stock of its subsidiaries, with no material independent source of cash proceeds. During the next 12 months, the Company does not anticipate receiving any material cash proceeds from its subsidiaries’ operating activities. Accordingly, the Company expects to fund its operations primarily out of its $55.0 million in cash as of September 30, 2003 ($17.2 million of which was paid as a dividend on the Preferred Stock on October 15, 2003) and its subsidiaries’ (other than Cablecom) cash of approximately $9.7 million. During the next 12 months, 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 the next 12 months, the Company does not anticipate any material capital expenses.

~~Back~~A restructuring of Cablecom’s debt and equity was completed on November 12, 2003. As a result, effective November 19, 2003, the Company will no longer have any remaining interest in Cablecom and the Company expects to ~~Index~~receive a payment of $15 million. (See Note 19 – “Cablecom Restructuring.”) Accordingly, from and after November 12, 2003, the results of Cablecom will no longer be reported as part of the Company’s consolidated results of operations and Cablecom will be treated as a discontinued operation beginning in the fourth quarter of 2003.

~~addition, the Company adopted fresh-start reporting upon its emergence from Chapter~~ 11 ~~reorganization in accordance with SOP 90-7. For financial reporting purposes, the effects of the consummation of the Plan as well as adjustments for fresh-start reporting have been recorded in the~~ ~~accompanying unaudited condensed consolidated financial statements as of January 1, 2003.~~

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

~~The~~On ~~term~~September 30, ~~“Predecessor~~2003, the Company”’s ~~refers~~board toof ~~the~~directors ~~Company~~approved ~~and~~a ~~its~~1-for-50,000 reverse ~~subsidiaries~~stock ~~for~~split ~~periods~~of ~~prior~~the toCommon Stock and ~~including~~payment ~~December~~of 31$.01 per share, ~~2002~~on a pre-split basis, for fractional shares. ~~The~~If ~~term~~approved ~~“Reorganized~~by ~~Company”~~a ~~refers~~majority toof the Company’s ~~and~~stockholders, ~~its~~the ~~subsidiaries~~consummation ~~for~~of ~~periods~~the ~~subsequent~~reverse stock split is expected to ~~January~~reduce 1,the ~~2003.~~number ~~The~~of ~~effects~~holders of ~~the~~Common ~~consummation~~ Stock ofto below 300 thereby permitting the ~~Plan~~Company asto ~~well~~terminate asits ~~adjustments~~registration ~~for~~under ~~fresh-start~~the ~~reporting~~Securities ~~recorded~~Act of 1933, as amended. ofThe ~~January~~number 1,of ~~2003~~holders ~~are~~of ~~Predecessor~~Preferred ~~Company~~Stock ~~transactions~~is ~~and~~already ~~are~~below ~~presented~~300. Accordingly, inafter the ~~accompanying~~effective ~~condensed~~date ~~consolidated~~of ~~statements~~the ofreverse ~~operations~~stock ~~and~~split, ~~cash~~the ~~flows~~Company intends ~~dated~~to ~~January~~terminate 1,the ~~2003.~~registration ~~All~~of ~~other~~the ~~results~~Common ofStock ~~operations~~ and Preferred Stock and ~~cash~~will ~~flows~~cease onbeing ~~January~~a 1,public ~~2003~~company. ~~are~~(See ~~Reorganized~~Note ~~Company~~18 ~~transactions~~– “Reverse Stock Split.”)

~~The~~Through September 30, 2004, the Company’s ~~adopted~~primary ~~fresh-start~~expenses ~~reporting~~are ~~upon~~expected ~~its~~to consist ~~emergence~~of ~~from~~operating ~~Chapter~~expenses of approximately $11.0 million, ~~reorganization~~including salaries, professional fees, insurance and severance costs, as well as certain funding obligations to certain of its subsidiaries (but not including certain guarantees to the Company’s subsidiaries in ~~accordance~~the ~~with~~aggregate ~~SOP~~amount ~~90-7~~of approximately £4.2 million). ~~The~~Further, ~~Company~~after ~~obtained~~reserving afor ~~valuation~~certain contingent liabilities, to ~~assist~~the inextent the ~~determination~~Company has remaining funds legally available, the Company intends to pay dividends on or redeem shares of its ~~reorganization~~Preferred Stock. ~~value~~In asthis ~~defined~~regard, inon ~~SOP~~October 15, ~~90-7.~~2003, ~~The~~the Company’s ~~determined~~board ~~the~~of directors paid ~~reorganization~~a ~~value~~semi-annual ~~was~~dividend of $2~~,198~~.650 ~~million~~per share on the Preferred Stock. However, ~~This~~there ~~determination~~is ~~was~~no ~~based~~requirement ~~upon~~under ~~various~~our ~~valuation~~charter ~~methods~~to pay any future dividends on our Preferred Stock and there is no assurance that we will pay any such future dividends. (See Note 17 – “Dividend on Preferred Stock.”) At September 30, ~~including~~2003, ~~discounted~~the ~~projected~~liquidation ~~cash~~preference ~~flow~~of ~~analysis~~Preferred Stock aggregates approximately $351.8 million, ~~selected~~exclusive ~~comparable~~of ~~market~~dividends ~~multiples~~payable of ~~publicly~~$17.2 million at ~~traded~~September 30, ~~companies~~2003, ~~and~~which ~~other~~was ~~applicable~~paid ~~ratios~~on ~~and~~October 15, ~~economic~~2003. ~~information~~In addition, the Preferred ~~relevant~~Stock is also entitled to mandatory redemption out of the ~~operations~~net proceeds of any asset sale for cash that the Company. ~~Certain~~or ~~factors~~its ~~that~~subsidiaries complete, ~~were~~subject ~~incorporated~~to ~~into~~some limited exceptions set forth in the Company’s charter. Subject to the board of directors’ determination to retain an appropriate reserve, the net proceeds of the Company’s ~~reorganization~~expected ~~value~~$15 million payment ~~included~~in connection with the ~~following:~~Cablecom restructuring is expected to be subject to this mandatory redemption provision. Accordingly, it is highly unlikely that common shareholders will ever receive any distribution related to their shares.

•The ~~Reporting~~Company ~~unit~~believes 10that ~~year~~its existing cash ~~flow~~and ~~projections;~~cash equivalents will be sufficient to support its expected operations and fund its capital commitments through at least October 1, 2004, which, as previously noted, will exclude Cablecom.

•Basis ~~Corporate income tax rates~~ of ~~30% in the UK and 25% in Switzerland;~~Presentation

•The ~~Present~~accompanying ~~value~~unaudited ~~discount~~condensed ~~factors~~consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations of 14the Securities and Exchange Commission.5% Accordingly, they do not include all of the information and ~~25%~~footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, ~~depending~~all ~~upon~~adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ~~reporting~~three ~~unit;~~and nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

•The ~~Residual~~Company ~~value~~operated ~~representing~~its ~~the~~business ~~sum~~as a debtor-in-possession subject to the jurisdiction of the ~~value~~Bankruptcy ~~beyond~~Court during the period from May 8, 2002 until January 10, ~~years~~2003. ~~into~~Accordingly, ~~perpetuity~~the ~~was~~Company’s ~~calculated~~consolidated ~~using~~financial statements for periods prior to its emergence from Chapter 11 reorganization were prepared in accordance with the ~~Gordon~~American ~~Growth~~Institute ~~Model~~of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (“SOP 90-7”). In addition, the Company adopted fresh-start reporting upon its emergence from Chapter 11 reorganization in accordance with SOP 90-7. For financial reporting purposes, the effects of the consummation of the

The cash flow projections are based on economic, competitive and general business conditions prevailing when the projections were prepared. They are also based on a variety of estimates and assumptions which, though considered reasonable by management, may not be realized, and12 are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. A change in the estimates and assumptions about revenue, operating cash flow, tax rates and capital expenditures may have had a ~~significant effect on the determination of the Company’s reorganization value.~~

TheTable Company determined that its reorganization value computed as of the Effective Date of January 10, 2003 consisted of the following (in millions):Contents

Present value of discounted cash flows of the emerging entity	$	1,615.0
Current assets		455.6
Other assets		128.0
Reorganization value	$	2,198.6

Plan as well as adjustments for fresh-start reporting have been recorded in the accompanying unaudited condensed consolidated financial statements as of January 1, 2003.

13Pursuant to fresh-start reporting, a new entity was deemed created for financial reporting purposes and the carrying value of assets and liabilities was adjusted. The carrying value of assets was adjusted to their reorganization value that is equivalent to their estimated fair value. The carrying value of liabilities was adjusted to their present value. Since fresh-start reporting materially changed the carrying values recorded in the Company’s consolidated balance sheet, a black line separates the financial statements for periods after the adoption of fresh-start reporting from the financial statements for periods prior to the adoption.

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

The Company adopted fresh-start reporting ~~because~~upon its emergence from Chapter 11 reorganization in accordance with SOP 90-7. The Company obtained a valuation to assist in the ~~holders~~determination of its ~~voting~~reorganization ~~common~~value ~~shares~~as ~~immediately~~defined ~~before~~in ~~filing~~SOP 90-7. ~~and~~The ~~confirmation~~Company ofdetermined the ~~Plan~~reorganization ~~received~~value ~~less~~was ~~than~~$2,198.6 million. This ~~50%~~determination ofwas ~~the~~based ~~voting~~upon ~~shares~~various ofvaluation ~~the~~methods, ~~emerging~~including discounted ~~company~~projected cash flow analysis, selected comparable market multiples of publicly traded companies and ~~because~~other applicable ratios and economic information relevant to the ~~Company’s~~operations ~~reorganization~~of ~~value~~the isCompany. ~~less~~Certain ~~than~~factors ~~its~~that were ~~post-petition~~incorporated ~~liabilities~~into ~~and~~the ~~allowed~~determination ~~claims,~~of asthe ~~shown~~Company’s ~~below~~reorganization ~~(in~~value included ~~millions)~~the following:

Allowed claims:
Liabilities subject to compromise	$	4,294.1
Post petition liabilities:
Current liabilities (excluding discontinued operations)		3,140.2
Deferred income taxes		226.0
Other non current liabilities		132.7
		7,793.0
Reorganization value		2,198.6
	$	5,594.4

•

Reporting unit 10 year cash flow projections;

~~The~~• ~~Company~~Corporate ~~realized~~income atax ~~gain~~rates of ~~$3,962~~30% ~~million~~ in ~~connection with~~ the ~~recapitalization~~UK ofand ~~its~~25% ~~debt~~ in ~~accordance with the Plan. This gain has been reflected in the results of operations of the Predecessor Company on January 1, 2003. A summary of the gain on debt discharge follows (in millions):~~Switzerland;

Liabilities subject to compromise
Pre-petition long-term debt subject to compromise	$	1,300.0
Redeemable preferred stock		2,853.3
Accounts payable and accrued expenses		0.5
Interest and dividends payable		140.3
		4,294.1
Unamortized deferred financing costs		(37.4	)
		4,256.7
Cash distributed upon emergence from bankruptcy		(188.2	)
Value of Reorganized Company’s preferred stock		(106.1	)
Value of Reorganized Company’s common stock		(0.2	)
	$	3,962.2

•

Present value discount factors of 14.5% and 25%, depending upon the reporting unit; and

~~Fresh-Start~~• ~~Reporting~~Residual value representing the sum of the value beyond 10 years into perpetuity was calculated using the Gordon Growth Model.

InThe ~~accordance~~cash ~~with~~flow ~~SOP~~projections ~~90-7,~~are ~~the~~based ~~Company~~on ~~adopted~~economic, ~~the~~competitive ~~provisions~~and ofgeneral business ~~fresh-start~~conditions ~~reporting~~prevailing aswhen ofthe ~~January~~projections 1,were ~~2003~~prepared. ~~The~~They ~~following~~are also ~~reconciliation~~based on a variety of ~~the~~estimates ~~Predecessor~~and ~~Company’s~~assumptions ~~consolidated~~which, ~~balance~~though ~~sheet~~considered reasonable asby ofmanagement, ~~December~~may 31not be realized, ~~2002~~and are inherently subject to significant ~~that~~business, ofeconomic ~~the~~and ~~Reorganized~~competitive ~~Company~~uncertainties asand contingencies, many of ~~January~~which 1,are ~~2003~~ beyond ~~gives~~the ~~effect~~Company’s tocontrol. A change in the ~~emergence~~estimates ~~from~~and assumptions ~~Chapter~~about 11revenue, ~~reorganization~~operating cash flow, tax rates and capital expenditures may have had a significant effect on the ~~adoption~~determination of ~~fresh-start~~the Company’s ~~reporting~~reorganization value.

The Company ~~engaged~~determined anthat ~~independent~~its ~~financial advisor to assist in the determination of the~~ reorganization value ~~(or~~computed ~~fair~~as ~~value)~~ of ~~substantially all of its assets and~~ the Effective ~~present~~Date ~~value~~ of ~~its liabilities. This determination resulted in the fresh-start reporting adjustments to write-down fixed assets and write-up intangible assets to their fair values. In addition~~January 10, ~~the~~2003 ~~Company’s~~consisted ~~total~~of ~~reorganization value exceeded~~ the ~~amounts~~following ~~allocable to identifiable assets that resulted~~ (in ~~a new indefinite-lived intangible asset.~~millions):

The adjustments entitled “Emergence from Chapter 11” reflect the consummation of the Plan, including the cancellation of a substantial portion of the Company’s outstanding debt and the issuance of shares of Common Stock and Preferred Stock to various former creditors and stockholders of Old NTL and certain of its subsidiaries. The adjustments entitled “Fresh-Start” reflect the adoption of fresh-start reporting.


Present value of discounted cash flows of the emerging entity	$	1,615.0
Current assets		455.6
Other assets		128.0

Reorganization value	$	2,198.6

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	December 31, 2002												January 1, 2003
	Predecessor Company			Emergence from Chapter 11			Discontinued Operations			Fresh-Start			Reorganized Company
	(dollars in millions)
Assets
Current assets:
Cash and cash equivalents	$	277.5		$	(170.9	)	$	53.2		$	—		$	159.8
Marketable securities		17.3			(17.3	)		—			—			—
Accounts receivable-trade, less Allowance for doubtful accounts of $9.4		243.4			—			—			—			243.4
Other		50.3			—			—			2.1			52.4
Discontinued operations		12,968.1			—			(12,968.1	)		—			—
Total current assets		13,556.6			(188.2	)		(12,914.9	)		2.1			455.6
Fixed assets, net		1,682.1			—			—			(507.2	)		1,174.9
Goodwill		218.7			—			—			(218.7	)		—
Reorganization value in excess of amounts allocable to identifiable assets		—			—			—			217.2			217.2
Customer lists, net of accumulated amortization of $171.4		62.8			—			—			146.8			209.6
Investments and loans to affiliates, net		13.0			—			—			7.2			20.2
Deferred financing		37.4			(37.4	)		—			—			—
Other assets, net of accumulated amortization of $62.4		83.5			—			—			(54.0	)		29.5
Deferred tax asset		195.3			—			—			(103.7	)		91.6
Total assets	$	15,849.4		$	(225.6	)	$	(12,914.9	)	$	(510.3	)	$	2,198.6
Liabilities and shareholders’ (deficiency) equity
Liabilities not subject to compromise
Current liabilities:
Accounts payable	$	49.3		$	—		$	—		$	0.3		$	49.6
Accrued expenses and other		92.5			—			—			1.2			93.7
Interest payable		43.5			—			—			—			43.5
Deferred revenue		235.6			—			—			—			235.6
Current portion of long-term debt		2,719.3			—			—			(1,313.2	)		1,406.1
Discontinued operations (including liabilities subject to compromise of $10,157.8)		17,956.2			—			(17,956.2	)		—			—
Total current liabilities		21,096.4			—			(17,956.2	)		(1,311.7	)		1,828.5
Other		132.7			—			—			(4.7	)		128.0
Deferred income taxes		226.0			—			—			(90.2	)		135.8
Liabilities subject to compromise, including redeemable preferred stock		4,294.1			(4,294.1	)		—			—			—
Mandatorily redeemable preferred stock		—			106.1			—			—			106.1
Common stock-old		2.8			—			—			(2.8	)		—
Common stock-new		—			0.2			—			—			0.2
Additional paid-in capital		13,574.9			—			—			(13,574.9	)		—
Translation adjustment		(830.2	)		—			—			830.2			—
Retained earnings		(22,647.3	)		3,962.2			5,041.3			13,643.8			—
Shareholders’ equity (deficiency)		(9,899.9	)		3,962.4			5,041.3			896.3			0.2
Total liabilities and shareholders’ equity (deficiency)	$	15,849.4		$	(225.6	)	$	(12,914.9	)	$	(510.3	)	$	2,198.6

The Company adopted fresh-start reporting because the holders of its voting common shares immediately before filing and confirmation of the Plan received less than 50% of the voting shares of the emerging company, and because the Company’s reorganization value is less than its post-petition liabilities and allowed claims, as shown below (in millions):

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 and which are subject to limitations as described below. Old NTL has net operating loss carryforwards for Swiss tax purposes of approximately $2.5 billion that expire in varying amounts commencing in 2008.


Allowed claims:
	Liabilities subject to compromise	$	4,294.1
Post petition liabilities:
	Current liabilities (excluding discontinued operations)		3,140.2
	Deferred income taxes		226.0
	Other non current liabilities		132.7

			7,793.0
	Reorganization value		2,198.6

		$	5,594.4

15The Company realized a gain of $3,962 million in connection with the recapitalization of its debt in accordance with the Plan. This gain has been reflected in the results of operations of the Predecessor Company on January 1, 2003. A summary of the gain on debt discharge follows (in millions):

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Liabilities subject to compromise
	Pre-petition long-term debt subject to compromise	$	1,300.0
	Redeemable preferred stock		2,853.3
	Accounts payable and accrued expenses		0.5
	Interest and dividends payable		140.3

			4,294.1
	Unamortized deferred financing costs		(37.4	)

			4,256.7
	Cash distributed upon emergence from bankruptcy		(188.2	)
	Value of Reorganized Company’s preferred stock		(106.1	)
	Value of Reorganized Company’s common stock		(0.2	)

		$	3,962.2

~~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~~Fresh-~~taxable~~Start ~~since the debt cancellation is in connection with a bankruptcy~~Reporting 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 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.

3In accordance with SOP 90-7, the Company adopted the provisions of fresh-start reporting as of January 1, 2003. ~~Pro~~The ~~Forma~~following ~~Financial~~reconciliation ~~Information~~of the Predecessor Company’s consolidated balance sheet as of December 31, 2002 to that of the Reorganized Company as of January 1, 2003 gives effect to the emergence from Chapter 11 reorganization and the adoption of fresh-start reporting.

The ~~following pro forma consolidated balance sheet at June 30, 2003 and the pro forma consolidated income statement for the six months ended June 30, 2003 reflect the likelihood that the~~ Company ~~will~~engaged ~~not~~an ~~retain~~independent afinancial ~~significant~~advisor ~~interest~~to assist in ~~Cablecom and that Cablecom will no longer be~~the determination ~~reported as part~~ of the ~~Company’s~~reorganization ~~consolidated~~value ~~results of operations. As described in more detail in Note 16~~ (~~Commitments~~or ~~and~~fair ~~Contingent Liabilities – Cablecom~~value), ~~Cablecom~~of ~~has~~substantially ~~approximately~~all of ~~CHF~~its ~~3,792~~assets ~~million~~and inthe ~~bank~~present ~~debt~~value ~~(which~~of ~~includes~~its ~~recently~~liabilities. ~~accrued~~This ~~interest payments) that~~determination resulted ~~initially~~in ~~matured on April 30, 2003 but~~ the ~~lenders~~fresh-start ~~have~~reporting ~~extended~~adjustments ~~such~~to ~~due~~write-down ~~date~~fixed ~~until~~assets and ~~October~~write-up ~~31,~~intangible ~~2003.~~assets ~~Cablecom has insufficient resources~~ to ~~satisfy~~their ~~such~~fair ~~obligation~~values. In addition, ~~Cablecom~~the Company’s ~~and~~total ~~certain~~reorganization ofvalue ~~its~~exceeded ~~subsidiaries~~the ~~are~~amounts ~~“overindebted”~~allocable ~~under Swiss law and, accordingly, may be~~to identifiable ~~required~~assets tothat ~~file~~resulted ~~for~~in ~~insolvency~~a ~~proceedings~~new inindefinite-lived ~~Switzerland~~intangible asset.

~~Cablecom~~The ~~and~~adjustments ~~its~~entitled ~~lenders~~“Emergence ~~have~~from ~~been~~Chapter 11” inreflect ~~discussions regarding a complete financial restructuring of Cablecom which will, among other things, reduce~~ the ~~amount~~ consummation of ~~bank debt outstanding, extend~~ the ~~maturity date thereof and resolve the Swiss overindebtedness issue. The proposed restructuring is subject to various closing conditions~~Plan, including the ~~negotiation,~~cancellation ~~completion and execution~~ of ~~definitive documentation. Cablecom’s lenders have also agreed to~~ a ~~moratorium~~substantial onportion ~~the payment~~ of ~~interest and commitment commission accruing between May 30, 2003 and~~ the ~~date on which Cablecom~~Company’s ~~credit~~outstanding ~~agreement~~debt isand ~~restated as part of~~ the ~~financial~~issuance ~~restructuring (when a portion~~ of ~~the~~shares ~~accrued amounts will be added to the principal amount~~ of ~~the~~Common ~~facility).~~Stock Ifand Preferred ~~Cablecom~~Stock ~~is subject~~ to anvarious ~~insolvency~~former ~~proceeding~~creditors ~~before~~and ~~its~~stockholders ~~credit~~of ~~agreement~~Old isNTL ~~restated,~~and certain ~~Cablecom’s~~of ~~lenders~~its ~~have~~subsidiaries. ~~agreed~~The toadjustments ~~waive~~entitled ~~such~~“Fresh-Start” ~~interest~~reflect the ~~and~~adoption ~~commitment~~of ~~commission~~fresh-start reporting.

In the event that the proposed restructuring is completed, the Company expects that its remaining interest in Cablecom will be acquired for an amount not in excess of $15 million. If such proposed restructuring is unsuccessful, the Company expects to be deprived of all its ownership14 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 or distributions 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.~~

16Table of Contents

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		December 31,												January 1,
		2002												2003

					Emergence
		Predecessor			from Chapter			Discontinued						Reorganized
		Company			11			Operations			Fresh-Start			Company

		(dollars in millions)
Assets
Current assets:
	Cash and cash equivalents	$	277.5		$	(170.9	)	$	53.2		$	–		$	159.8
	Marketable securities		17.3			(17.3	)		–			–			–
	Accounts receivable-trade, less Allowance for doubtful accounts of $9.4		243.4			–			–			–			243.4
	Other		50.3			–			–			2.1			52.4
	Discontinued operations		12,968.1			–			(12,968.1	)		–			–

	Total current assets		13,556.6			(188.2	)		(12,914.9	)		2.1			455.6
	Fixed assets, net		1,682.1			–			–			(507.2	)		1,174.9
	Goodwill		218.7			–			–			(218.7	)		–
	Reorganization value in excess of amounts allocable to identifiable assets		–			–			–			217.2			217.2
	Customer lists, net of accumulated amortization of $171.4		62.8			–			–			146.8			209.6
	Investments and loans to affiliates, net		13.0			–			–			7.2			20.2
	Deferred financing		37.4			(37.4	)		–			–			–
	Other assets, net of accumulated amortization of $62.4		83.5			–			–			(54.0	)		29.5
	Deferred tax asset		195.3			–			–			(103.7	)		91.6

	Total assets	$	15,849.4		$	(225.6	)	$	(12,914.9	)	$	(510.3	)	$	2,198.6

Liabilities and shareholders’ (deficiency) equity
Liabilities not subject to compromise Current liabilities:
Accounts payable		$	49.3		$	–		$	–		$	0.3		$	49.6
Accrued expenses and other			92.5			–			–			1.2			93.7
Interest payable			43.5			–			–			–			43.5
Deferred revenue			235.6			–			–			–			235.6
Current portion of long-term debt			2,719.3			–			–			(1,313.2	)		1,406.1
Discontinued operations (including liabilities subject to compromise of $10,157.8)			17,956.2			–			(17,956.2	)		–			–

Total current liabilities			21,096.4			–			(17,956.2	)		(1,311.7	)		1,828.5
Other			132.7			–			–			(4.7	)		128.0
Deferred income taxes			226.0			–			–			(90.2	)		135.8
Liabilities subject to compromise, including redeemable preferred stock			4,294.1			(4,294.1	)		–			–			–
Mandatorily redeemable preferred stock			–			106.1			–			–			106.1
	Common stock-old		2.8			–			–			(2.8	)		–
	Common stock-new		–			0.2			–			–			0.2
	Additional paid-in capital		13,574.9			–			–			(13,574.9	)		–
	Translation adjustment		(830.2	)		–			–			830.2			–
	Retained earnings		(22,647.3	)		3,962.2			5,041.3			13,643.8			–

Shareholders’ equity (deficiency)			(9,899.9	)		3,962.4			5,041.3			896.3			0.2

Total liabilities and shareholders’ equity (deficiency)		$	15,849.4		$	(225.6	)	$	(12,914.9	)	$	(510.3	)	$	2,198.6

	June 30, 2003 (Consolidated)			Discontinued Operations (Cablecom)			Pro Forma as of June 30, 2003
	(amounts in millions)
Assets
Current assets:
Cash and cash equivalents	$	148.1		$	(80.9	)	$	67.2
Accounts receivable-trade, net		73.6			(55.5	)		18.1
Other		74.5			(61.2	)		13.3
Discontinued operations		—			1,920.3			1,920.3
Total current assets		296.2			1,722.7			2,018.9
Fixed assets, net		1,157.3			(1,154.1	)		3.2
Goodwill		—			—			—
Reorganization value in excess of amounts allocable to identifiable assets		221.5			(220.3	)		1.2
Customer lists, net of accumulated amortization of $5.6		208.9			(208.9	)		—
Investments in and loans to affiliates, net		21.0			(7.9	)		13.1
Deferred tax asset		91.8			(132.0	)		(40.2	)
Other assets		19.3			0.5			19.8
Total assets	$	2,016.0		$	—		$	2,016.0
Liabilities and shareholders’ (deficiency)
Liabilities not subject to compromise
Current liabilities:
Accounts payable	$	32.7		$	(23.5	)	$	9.2
Accrued expenses and other		68.5			(36.2	)		32.3
Interest payable		9.6			(9.6	)		—
Deferred revenue		145.9			(143.4	)		2.5
Current portion of long-term debt		2,809.6			(2,809.3	)		0.3
Discontinued operations		—			1,920.3			1,920.3
Total current liabilities		3,066.3			(1,101.7	)		1,964.6
Long-term debt		—			—			—
Other		132.3			(132.3	)		—
Deferred income taxes		135.3			(175.6	)		(40.3	)
Commitments and contingent liabilities
Mandatorily redeemable preferred stock		114.7			—			114.7
Shareholders’ (deficiency)
Common stock – $.01 par value; authorized 20.0 shares; issued and outstanding shares		0.2			—			0.2
Additional paid-in capital		—			—			—
Accumulated other comprehensive (loss)		3.7			(3.5	)		0.2
(Deficit)		(1,436.5	)		1,413.1			(23.4	)
		(1,432.6	)		1,409.6			(23.0	)
Total liabilities and shareholders’ equity (deficiency)	$	2,016.0		$	—		$	2,016.0

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 and which are subject to limitations as described below. Old NTL has net operating loss carryforwards for Swiss tax purposes of approximately $2.6 billion that expire in varying amounts commencing in 2008.

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~~NTL~~The ~~Europe~~Company emerged from Chapter 11 bankruptcy on January 10, ~~Inc~~2003. ~~and~~A restructuring ~~subsidiaries~~of the Company’s debt will give rise to cancellation of indebtedness income (“COD”) in 2003, ~~pro~~which ~~forma~~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 carryforwards. The reduction of tax attributes should have no material impact on the Company’s financial statement ~~reflecting~~position since ~~Cablecom~~the asdeferred tax assets related to these tax attributes are offset by a corresponding ~~discontinued~~valuation ~~operation:~~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.

	Six months ended June 30, 2003			Discontinued Operations			Pro Forma as of June 30, 2003
				(unaudited)
	(dollars in millions, except per share amounts)
Revenues	$	242.3		$	(229.2	)	$	13.1
Costs and expenses
Operating expenses (exclusive of depreciation shown separately below)		90.9			(81.8	)		9.1
Selling, general and administrative expenses		69.8			(64.3	)		5.5
Other Charges		3.6			(3.6	)		—
Corporate expenses		9.2			—			9.2
Depreciation		92.4			(89.4	)		3.0
Amortization		5.5			(5.5	)		—
		271.4			(244.6	)		26.8
Operating (loss)		(29.1	)		15.4			(13.7	)
Other income (expense)
Interest income and other, net		2.0			(1.9	)		0.1
Interest expense		(1,398.4	)		1,398.4			—
Share of (losses) from equity investments		(1.7	)		—			(1.7	)
Foreign currency transaction gains (losses)		0.6			—			0.6
(Loss) before recapitalization items, income taxes and discontinued operations		(1,426.6	)		1,411.9			(14.7	)
Recapitalization items, net		—			—			—
(Loss) before income taxes and discontinued operations		(1426.6	)		1,411.9			(14.7	)
Income tax benefit (expense)		(1.3	)		1.2			(0.1	)
(Loss) from continuing operations		(1,427.9	)		1,413.1			(14.8	)
Discontinued operations:
(Loss) from discontinued operations, net of income tax benefit of $0.7		—			(1,413.1	)		(1,413.1	)
Net (loss)		(1,427.9	)		—			(1,427.9	)
Preferred stock dividends and accretion		(8.6	)		—			(8.6	)
Net (loss) available to common shareholders	$	(1,436.5	)	$	—		$	(1,436.5	)
Basic and diluted net (loss) per share:
(Loss) from continuing operations	$	(73.08	)	$	71.89		$	(1.19	)
(Loss) from discontinued operations		—			(71.89	)	$	(71.89	)
Net (loss) per common share	$	(73.08	)	$	—		$	(73.08	)
Weighted average shares		19,657,433			19,657,433			19,657,433

3. Pro Forma Financial Information

4The following pro forma consolidated balance sheet at September 30, 2003 and the pro forma consolidated income statement for the nine months ended September 30, 2003 reflect the likelihood as of that date that the Company would not retain a significant interest in Cablecom and that Cablecom would no longer be reported as part of the Company’s consolidated results of operations. ~~Recent~~As described ~~Accounting~~in ~~Pronouncements~~more detail in Note 16 (Commitments and Contingent Liabilities – Cablecom), until its restructuring on November 12, 2003, Cablecom had approximately CHF 3,792 million in bank debt (which included recently accrued interest payments) that initially matured on April 30, 2003 and had been extended to November 18, 2003. Prior to its restructuring on November 12, 2003, Cablecom had insufficient resources to satisfy such obligation. In addition, prior to its restructuring on November 12, 2003, Cablecom and certain of its subsidiaries were “overindebted” under Swiss law and, accordingly, but for the recent restructuring, could have been required to file for insolvency proceedings in Switzerland.

InA ~~May~~restructuring ~~2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics~~ of ~~both~~Cablecom’s ~~Liabilities~~debt and ~~Equity”.~~equity ~~SFAS~~was ~~No.~~completed ~~150~~on ~~establishes standards for classifying and measuring as liabilities certain financial~~November 12, ~~instruments that embody obligations of the issuer and have characteristics of both liabilities and equity~~2003. ~~SFAS~~As ~~No. 150 represents~~ a ~~significant~~result, ~~change~~effective inNovember 19, ~~practice~~2003, in the ~~accounting~~Company ~~for~~will ano ~~number of financial instruments, including mandatorily redeemable equity instruments. The Company~~longer have ~~has~~any ~~evaluated~~remaining ~~its~~interest ~~10%~~in ~~mandatorily~~Cablecom ~~redeemable preferred stock~~ and ~~determined~~the ~~that~~Company itexpects ~~meets~~to ~~the~~receive ~~definition~~a payment of ~~a liability as set forth in SFAS No~~$15 million. ~~150~~(See ~~because~~Note it19 is– ~~mandatorily~~“Cablecom ~~redeemable on a fixed date~~Restructuring. ”) Accordingly, asfrom ofand ~~July~~after 1November 12, 2003, the ~~Company~~results ~~will~~of ~~record~~Cablecom ~~the~~will ~~mandatorily~~no longer ~~redeemable~~be ~~preferred~~reported ~~stock~~ as ~~debt,~~part ~~and~~of ~~accrete as interest expense~~ the ~~difference~~Company’s ~~between~~consolidated ~~such~~results ~~amount~~of operations and ~~the~~Cablecom ~~amount that~~ will be ~~payable~~treated onas ~~the~~a ~~redemption~~discontinued ~~date,~~operation ~~January~~beginning ~~10,~~in ~~2023~~the fourth quarter of 2003.

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


		September 30,			Discontinued			Pro Forma
		2003			Operations			as of
		(Consolidated)			(Cablecom)			September 30, 2003

		(unaudited)
		(amounts in millions)
Assets
Current assets:
	Cash and cash equivalents	$	126.7		$	(62.0	)	$	64.7
	Accounts receivable-trade, net		50.1			(41.8	)		8.3
	Other		78.4			(67.7	)		10.7
	Discontinued operations		–			1,908.9			1,908.9

Total current assets			255.2			1,737.4			1,992.6
Fixed assets, net			1,164.3			(1,162.6	)		1.7
Goodwill			–			–			–
Reorganization value in excess of amounts allocable to identifiable assets			226.5			(225.3	)		1.2
Customer lists, net of accumulated amortization of $8.2			211.3			(211.3	)		–
Investments in and loans to affiliates, net			21.2			(8.1	)		13.1
Deferred tax asset			91.5			(131.8	)		(40.3	)
Other assets			15.0			1.7			16.7

Total assets		$	1,985.0		$	–		$	1,985.0

Liabilities and shareholders’ (deficiency)
Liabilities not subject to compromise Current liabilities:
	Accounts payable	$	49.1		$	(38.6	)	$	10.5
	Accrued expenses and other		58.6			(44.0	)		14.6
	Interest payable		12.1			(12.1	)		–
	Dividends payable		17.2			–			17.2
	Deferred revenue		88.4			(86.2	)		2.2
	Current portion of long-term debt		2,875.5			(2,875.4	)		0.1
	Discontinued operations		–			1,908.9			1,908.9

Total current liabilities			3,100.9			(1,147.4	)		1,953.5
Long-term debt			–			–			–
Mandatorily redeemable preferred stock			102.1			–			102.l
Other			145.0			(145.0	)		–
Deferred income taxes			135.7			(175.9	)		(40.2	)
Commitments and contingent liabilities
Shareholders’ (deficiency) Common stock — $.01 par value; authorized 20.0 shares; issued and outstanding 19.7 shares			0.2			–			0.2
	Additional paid-in capital		–			–			–
	Accumulated other comprehensive (loss)		(45.4	)		45.7			0.3
	(Deficit)		(1,453.5	)		1,422.6			(30.9	)

			(1,498.7	)		1,468.3			(30.4	)

Total liabilities and shareholders’ equity (deficiency)		$	1,985.0		$	–		$	1,985.0

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”), which requires variable interest entities to be consolidated by the primary beneficiary of the entity if certain criteria are met. FIN 46 is effective immediately for all17 new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 will become effective for the Company during the third quarter of 2003. The Company is presently evaluating ~~whether it will be required to consolidate, beginning July 1, 2003, any of its unconsolidated affiliates presently accounted for using the equity method as a result of the effectiveness of FIN 46.~~

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

In NTL ~~July 2002~~Europe, ~~FASB issued SFAS No~~Inc. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 replaced Emerging Issues Task Force Issue No. 94-3 “Liability Recognition for Certain Employee Termination Benefits and ~~Other~~subsidiaries, ~~Costs~~pro toforma ~~Exit~~income anstatement ~~Activity~~reflecting Cablecom (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~~discontinued 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 did not have a significant effect on the results of operations, financial condition or cash flows of the Company.operation:

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


									Pro Forma
									for the nine
			Nine months ended			Discontinued			months ended
			September 30, 2003			Operations			September 30,
			(Consolidated)			(Cablecom)			2003

			(unaudited)
			(dollars in millions, except per share amounts)
Revenues			$	366.0		$	(347.8	)	$	18.2
Costs and expenses
Operating expenses (exclusive of depreciation shown separately below)				137.4			(127.4	)		10.0
Selling, general and administrative expenses				97.1			(88.3	)		8.8
Other Charges				6.4			(6.4	)		–
Corporate expenses				13.3			–			13.3
Depreciation				138.0			(133.4	)		4.6
Amortization				8.1			(8.1	)		–

				400.3			(363.6	)		36.7

Operating (loss)				(34.3	)		15.8			(18.5	)
Other income (expense)
Interest income and other, net				3.4			(1.7	)		1.7
Interest expense				(1,412.0	)		1,407.4			(4.6	)
Share of (losses) from equity investments				(1.8	)		–			(1.8	)
Foreign currency transaction gains (losses)				1.2			–			1.2

(Loss) before recapitalization items, income taxes and discontinued operations				(1,443.5	)		1,421.5			(22.0	)
Recapitalization items, net				–			–			–

(Loss) before income taxes and discontinued operations				(1443.5	)		1,421.5			(22.0	)
Income tax benefit (expense)				(1.4	)		1.1			(0.3	)

(Loss) from continuing operations				(1,444.9	)		1,422.6			(22.3	)
Discontinued operations:
	(Loss) from discontinued operations, including income tax expense of $1.1			–			(1,422.6	)		(1,422.6	)

Net (loss)				(1,444.9	)		–			(1,444.9	)
Preferred stock dividends and accretion				(8.6	)		–			(8.6	)

Net (loss) available to common shareholders			$	(1,453.5	)	$	–		$	(1,453.5	)

Basic and diluted net (loss) per share:
		(Loss) from continuing operations	$	(73.94	)	$	72.37		$	(1.57	)
		(Loss) from discontinued operations		–			(72.37	)		(72.37	)

		Net (loss) per common share	$	(73.94	)	$	–		$	(73.94	)

		Weighted average shares		19,657,524			19,657,524			19,657,524

54. ~~Stock-Based~~Recent ~~Compensation~~Accounting Pronouncements

In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 represents a significant change in practice in the accounting for a number of financial instruments, including mandatorily redeemable equity instruments. The Company has ~~not~~evaluated ~~issued~~its ~~any~~10% mandatorily redeemable preferred stock ~~options~~and ordetermined ~~made~~that ~~any~~it ~~stock~~meets ~~grants~~the ~~since~~definition ~~its~~of ~~reorganization~~a liability as set forth in SFAS No. 150 because it is mandatorily redeemable on a fixed date. Accordingly, as of July 1, 2003, the

The Predecessor Company followed the disclosure-only provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation.” The Company applies APB Opinion No. 25, “Accounting for Stock Issued to Employees” and related18 ~~interpretations in accounting for its stock option plans.~~

19Table of Contents

~~Back~~Company tohas ~~Index~~recorded the mandatorily redeemable preferred stock as debt, and is accreting as interest expense the difference between such amount and the amount that will be payable on the redemption date, January 10, 2023.

~~The~~In ~~Predecessor~~April 2003, ~~Company’s~~the ~~employees~~FASB ~~participated~~issued inStatement ~~the~~of ~~various~~Financial ~~stock~~Accounting ~~option~~Standards (“SFAS”) ~~plans~~No. 149, “Amendment of ~~Old~~Statement ~~NTL~~133 on Derivative Instruments and Hedging Activities.” ~~All~~SFAS ~~options~~No. 149 toamends ~~purchase~~and ~~shares~~clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This statement is effective for contracts entered into or modified after June 30, 2003. The adoption of ~~the~~this ~~Predecessor~~statement ~~Company’s~~is ~~common~~not ~~stock~~expected ~~were~~to ~~cancelled~~have a significant effect on the ~~Effective~~results ~~Date~~of ~~pursuant~~operations, tofinancial ~~the~~condition ~~Plan~~or cash flows of the Company.

~~Pro~~In ~~forma~~January 2003, ~~information~~the ~~regarding~~FASB ~~net~~issued ~~loss~~FASB ~~has~~Interpretation ~~been~~No. 46, ~~determined~~“Consolidation asof Variable ifInterest ~~the~~Entities” ~~Predecessor~~(“FIN ~~Company~~46”), ~~had~~which ~~accounted~~requires ~~for~~variable ~~its~~interest entities ~~employee~~to ~~stock~~be ~~options~~consolidated ~~under~~by the ~~fair~~primary ~~value~~beneficiary ~~method~~ of ~~SFAS~~the ~~No.~~entity ~~123.~~if ~~The~~certain criteria ~~fair~~are ~~value~~met. ~~for~~FIN ~~these~~46 ~~options~~is ~~was~~effective ~~estimated~~immediately atfor ~~the~~all ~~date~~new ofvariable interest ~~grant~~entities ~~using~~created ~~the~~or ~~Black-Scholes~~acquired ~~option~~ after ~~pricing~~January 31, ~~model~~2003. ~~with~~For ~~the~~variable interest ~~following~~entities ~~weighted-average~~created ~~assumptions~~or ~~for~~acquired ~~2003~~prior ~~and~~to ~~2002;~~February 1, ~~risk-free~~2003, ~~interest~~the ~~rates~~ provisions of ~~3.90%~~FIN ~~and~~46 ~~4.47%,~~will ~~respectively,~~become ~~dividend~~effective ~~yield~~for ofthe ~~0%,~~Company ~~volatility~~during ~~factor~~the offourth ~~the~~quarter ~~expected~~of 2003. ~~market~~The ~~price~~Company ofis ~~the~~presently ~~Predecessor~~evaluating ~~Company’s~~whether ~~common~~it ~~stock~~will ofbe ~~.638~~required ~~and~~to consolidate, ~~.702~~beginning October 1, ~~respectively~~2003, ~~and~~any aof ~~weighted-average~~its ~~expected~~unconsolidated ~~life~~affiliates presently ofaccounted for using the ~~option~~equity ofmethod 10as ~~years~~a ~~and~~result 10of ~~years,~~the effectiveness ~~respectively~~of FIN 46.

~~The~~In ~~Black-Scholes~~November 2002, ~~option~~the ~~valuation~~Emerging ~~model~~Issues ~~was~~Task ~~developed~~Force ~~for~~reached ~~use~~a inconsensus ~~estimating~~on ~~the~~EITF No. 00-21, ~~fair~~“Revenue ~~value~~Arrangements ofwith ~~traded~~Multiple ~~options,~~Deliverables” ~~which~~(“EITF ~~have~~00-21”). EITF no00-21 ~~vesting~~provides ~~restrictions~~guidance ~~and~~on ~~are~~how ~~fully~~to ~~transferable.~~account Infor ~~addition,~~arrangements ~~option~~that ~~valuation~~involve the ~~models~~delivery ~~require~~or ~~the~~performance ~~input~~ of ~~highly~~multiple ~~subjective~~products, ~~assumptions~~services ~~including~~and/or ~~the~~rights ~~expected~~ to ~~stock price volatility~~use assets. ~~Because~~The ~~these~~provisions ~~stock~~of ~~options~~EITF ~~have~~00-21 ~~characteristics~~will ~~significantly~~apply ~~different~~to ~~from~~revenue ~~those~~arrangements entered ofinto ~~traded~~in ~~options~~fiscal ~~and~~periods ~~because~~beginning ~~changes~~after inJune 15, ~~the~~2003. ~~subjective~~The ~~input~~adoption ~~assumptions~~of EITF ~~can~~00-21 ~~materially~~did ~~affect~~not ~~the~~have ~~fair~~a ~~value~~significant ~~estimate,~~effect inon ~~management’s opinion,~~ the ~~existing~~results ~~models~~of ~~do not~~operations, financial ~~necessarily~~condition ~~provide~~or acash ~~reliable~~flows ~~single measure~~ of the ~~fair value of its stock options~~Company.

~~For~~In ~~purposes~~July 2002, ofFASB ~~pro~~issued ~~forma~~SFAS ~~disclosures~~No. 146, ~~the~~“Accounting ~~estimated~~for ~~fair~~Costs ~~value~~Associated ofwith Exit ~~the~~or ~~options~~Disposal isActivities.” ~~amortized~~SFAS toNo. 146 ~~expense~~replaced ~~over~~Emerging ~~the~~Issues ~~options’~~Task ~~vesting~~Force Issue ~~period~~No. 94-3 ~~The~~“Liability ~~effects~~Recognition offor ~~applying~~Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS No. 146 ~~123~~requires onthat ~~pro~~a ~~forma~~liability ~~disclosures~~for ofcosts ~~net~~associated with ~~loss~~an ~~for~~exit ~~the~~or ~~three~~disposal ~~and~~activity ~~six~~is ~~months~~recognized ~~ended~~when ~~June~~the 30liability is incurred. Under Issue No. 94-3, ~~2003~~a ~~were~~liability ~~not~~for ~~likely~~an exit cost as defined is recognized at the date of a commitment to bean exit or disposal plan. SFAS No. 146 is effective ~~representative~~for exit or disposal activities that are initiated after December 31, 2002. The adoption of ~~the~~this ~~pro~~standard ~~forma~~did ~~effects~~not have a significant effect on ~~net~~the results ~~loss~~of inoperations, ~~future~~financial ~~years~~condition or cash flows of the Company.

~~Had~~In ~~compensation~~June 2001, the FASB issued SFAS No. 143, “Accounting for ~~stock~~Asset ~~options~~Retirement Obligations,” ~~granted~~effective byfor the ~~Predecessor~~ Company ~~been~~on ~~determined~~January 1, ~~consistent~~2003. ~~with~~This Statement addresses financial accounting and reporting for obligations associated with the ~~provisions~~retirement of ~~SFAS~~tangible ~~No.~~fixed ~~123,~~assets and the ~~effect~~associated onasset ~~the~~retirement costs. ~~Predecessor~~The ~~Company’s~~adoption ~~net~~of ~~loss~~this ~~would~~standard did not have ~~been~~a ~~changed~~significant toeffect on the results ~~following~~of ~~pro~~operations, ~~forma~~financial ~~amounts~~condition or cash flows of the Company.

	Three Months Ended June 30,							Six Months Ended June 30,
	2003			2002				2003			2002
	Reorganized Company			Predecessor Company				Reorganized Company			Predecessor Company
	(in millions, except per share data)
Net loss for common shares, as reported	$	(394.7	)		$	(599.6	)	$	(1,436.5	)		$	(1,303.9	)
Non cash compensation expense		—				(64.0	)		—				(128.0	)
Net loss, pro forma		(394.7	)			(663.6	)		(1,436.5	)			(1,431.9	)
Basic and diluted net (loss) per common share	$	(20.08	)		$	(2.40	)	$	(73.08	)		$	(5.18	)
Weighted average shares		19,657,433				276,626,475			19,657,433				276,626,475

5. Stock-Based Compensation

20The Company has not issued any stock options or made any stock grants since its reorganization.

~~Back~~The Predecessor Company followed the disclosure-only provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation.” The Company applies APB Opinion No. 25, “Accounting for Stock Issued to ~~Index~~Employees” and related interpretations in accounting for its stock option plans.

~~6. Fixed Assets~~19

FixedTable assets consist of: Contents

	June 30, 2003			December 31, 2002
	Reorganized Company			Predecessor Company
	(unaudited)
	(in millions)
Operating equipment	$	1,140.4		$	2,109.25
Other equipment		74.9			109.5
Construction-in-progress		33.5			25.1
		1,248.8			2,243.8
Accumulated depreciation		(91.5	)		(561.7	)
	$	1,157.3		$	1,682.1

The Predecessor Company’s employees participated in the various stock option plans of Old NTL. All options to purchase shares of the Predecessor Company’s common stock were cancelled on the Effective Date pursuant to the Plan.

~~The~~Pro ~~change~~forma ininformation ~~fixed~~regarding ~~assets~~net isloss ~~primarily~~has ~~the~~been ~~result~~determined ofas if the Predecessor ~~$507.2~~Company ~~million~~had ~~reduction~~accounted infor ~~the~~its ~~carrying~~employee ~~value~~stock ~~upon~~options under the ~~adoption~~fair value method of ~~fresh-start~~SFAS ~~reporting~~No. 123. asThe fair value for these options was estimated at the date of ~~January~~grant 1,using ~~2003.~~the ~~Substantially~~Black-Scholes ~~all~~option ~~fixed~~pricing ~~assets~~model ~~relate~~with tothe following ~~Cablecom~~weighted-average ~~and,~~assumptions asfor ~~discussed~~2003 inand ~~more~~2002; ~~detail~~risk-free ininterest rates ~~Note~~of 3.90% and 4.47%, ~~Cablecom~~respectively, ~~will~~dividend ~~not~~yield beof ~~owned~~ 0%, byvolatility factor of the ~~Company,~~expected ~~nor~~market ~~included~~price inof the Predecessor Company’s ~~balance~~common ~~sheet~~stock of .638 and .702, inrespectively, and a weighted-average expected life of the ~~near~~option ~~future~~of 10 years and 10 years, respectively.

7The 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. ~~Reorganization~~In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because these stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in ~~excess~~management’s opinion, the existing models do not necessarily provide a reliable single measure of ~~amounts~~the ~~allocable~~fair tovalue ~~identifiable~~of ~~assets~~its stock options.

~~The~~For ~~reorganization~~purposes ~~value~~of inpro ~~excess~~forma disclosures, the estimated fair value of ~~amounts~~the ~~allocable~~options is amortized to ~~identifiable~~expense ~~assets,~~over isthe ~~comprised~~options’ vesting period. The effects of applying SFAS No. 123 on pro forma disclosures of net loss for the ~~following:~~three and nine months ended September 30, 2003 were not likely to be representative of the pro forma effects on net loss in future years.

	Reorganized Company
Balance at January 1, 2003	$	217.2
Effects of foreign currency		4.3
Balance at June 30, 2003	$	221.5

Had compensation for stock options granted by the Predecessor Company been determined consistent with the provisions of SFAS No. 123, the effect on the Predecessor Company’s net loss would have been changed to the following pro forma amounts.

The reorganization value in excess of amounts allocable to identifiable assets relate substantially to Cablecom and, as discussed in more detail in Note 3, Cablecom will not be owned by the Company, nor included in the Company’s balance sheet, in the near future.


	Three Months Ended September 30,						Nine Months Ended September 30,

	2003			2002			2003			2002

	Reorganized			Predecessor			Reorganized			Predecessor
	Company			Company			Company			Company

	(in millions, except per share data)
Net loss for common shares, as reported	$	(17.0	)	$	(450.4	)	$	(1,453.5	)	$	(1,754.3	)
Non cash compensation expense		–			(66.1	)		–			(198.2	)
Net loss for common shares, pro forma		(17.0	)		(516.5	)		(1,453.5	)		(1,952.5	)
Basic and diluted net (loss) per common share	$	(0.86	)	$	(1.87	)	$	(73.94	)	$	(7.06	)
Weighted average shares		19,657,660			276,626,475			19,657,524			276,626,475

~~8. Customer Lists~~20

TheTable valuation of the Company’s customer lists were:Contents

	June 30, 2003			December 31, 2002
	Reorganized Company			Predecessor Company
	(unaudited)
	(in millions)
Customer lists	$	214.5		$	234.2
Accumulated depreciation		(5.6	)		(171.4	)
	$	208.9		$	62.8

6. Fixed Assets

~~The~~Fixed ~~change~~assets inconsist ~~customer lists is primarily the result~~ of ~~the $146.8 million increase in the carrying value upon the adoption of fresh-start reporting as of January 1, 2003. The customer lists relate solely to~~:


	September 30,			December 31,
	2003			2002

	Reorganized			Predecessor
	Company			Company

	(unaudited)
	(in millions)
Operating equipment	$	1,182.7		$	2,109.25
Other equipment		78.6			109.5
Construction-in-progress		43.8			25.1

		1,305.1			2,243.8
Accumulated depreciation		(140.8	)		(561.7	)

	$	1,164.3		$	1,682.1

~~Back~~The change in fixed assets is primarily the result of the $507.2 million reduction in the carrying value upon the adoption of fresh-start reporting as of January 1, 2003. Substantially all fixed assets relate to ~~Index~~Cablecom and, as discussed in more detail in Note 3, Cablecom will not be owned by the Company, nor included in the Company’s balance sheet.

~~Cablecom~~7. ~~and,~~Reorganization asvalue ~~discussed~~ in ~~more~~excess ~~detail~~of inamounts ~~Note~~allocable 3,to ~~Cablecom~~identifiable ~~will not be owned by the Company, nor included in the Company’s balance sheet, in the near future.~~assets

The ~~estimated~~reorganization ~~amortization~~value ~~expense~~in ~~for~~excess ~~customer~~of ~~lists~~amounts isallocable ~~approximately~~to ~~$9.7~~identifiable ~~million per year~~assets, is ~~for~~comprised ~~each~~ of the ~~next five years.~~following:

9. Investments in and Loans to Affiliates – Reorganized Company


	Reorganized
	Company

Balance at January 1, 2003	$	217.2
Effects of foreign currency		9.3

Balance at September 30, 2003	$	226.5

~~All~~The ~~investments~~reorganization value in ~~which~~excess ~~the~~of ~~Company~~amounts ~~has~~allocable ~~the ability~~ to ~~exercise~~identifiable ~~significant~~assets relate ~~influence~~substantially ~~over~~to ~~the~~Cablecom ~~investee~~and, ~~but~~as ~~less~~discussed ~~than~~in amore ~~controlling~~detail ~~voting~~in ~~interest,~~Note ~~are accounted for using the equity method. Equity method investments are recorded at original cost and adjusted periodically to recognize~~3, Cablecom ~~the~~will ~~Company’s~~not ~~proportionate~~be ~~share~~owned ofby the ~~investees’ net income or losses after the date of investment~~Company, ~~additional~~nor ~~contributions~~included ~~made~~in ~~and dividends received. Prior to~~ the ~~adoption of SFAS No. 142, the difference between the~~ Company’s ~~recorded investment and its proportionate interest~~ balance ~~in the book value of the investees’ net assets were being amortized on a straight-line basis over 10 years~~sheet. ~~The Company evaluates the carrying value of its equity method investments and tests for impairment in accordance with APB Opinion No. 18.~~

~~Investments~~8. inCustomer ~~which the Company does not have the ability to exercise significant influence (less than 20% ownership) are accounted for on the cost method.~~Lists

The valuation of the Company’s ~~investments~~customer inlists ~~and loans to affiliates are as follows~~were:

	June 30, 2003
	September 30,			December 31,
	(in millions)
	2003			2002
Total equity investments	$	13.1
	Reorganized			Predecessor
Total cost investments		7.9
	Company			Company
Total	$	$21.0
	(unaudited)
	(in millions)
Customer lists	$	219.5		$	234.2
Accumulated depreciation		(8.2	)		(171.4	)
	$	211.3		$	62.8

The ~~following~~change in customer lists is aprimarily ~~description~~the result of the ~~Company’s~~$146.8 million increase ~~major~~in ~~investments~~the carrying value upon the adoption of fresh-start reporting as of January 1, ~~listed~~2003. byThe ~~subsidiary:~~customer lists relate solely to

~~Premium TV Limited~~21

PremiumTable TV, a wholly-owned subsidiary of Parc Holdings, is obliged to provide funding of up to approximately £29 million ($48.6 million), at June 30, 2003, to fund various of its joint venture and other contractual interests. Of this amount, the payment of approximately £17 million ($27.5 million) has been guaranteed by Parc Holdings. 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, Parc Holdings, 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.Contents

OnCablecom ~~September 24~~and, ~~2002, Premium TV, Parc Holdings and Old NTL agreed to vary the terms of the long-term joint venture (referred to~~ as ~~the~~discussed ~~Football~~in ~~League~~more ~~Joint~~detail ~~Venture)~~in ~~between~~Note ~~Premium TV and the Football League Limited. Under the terms of the variation~~3, ~~upon~~Cablecom ~~the~~will ~~payment~~not of be ~~arrears of rights fees~~ owned by ~~Premium~~the TVCompany, ~~the~~nor ~~Football~~included ~~League~~in ~~Limited agreed to release Premium TV from its obligation to fund~~ the ~~payment of any further rights fees to the Football League Limited~~Company’s ~~member~~balance ~~teams and its obligation to~~sheet.

22The estimated amortization expense for customer lists is approximately $9.7 million per year, for each of the next five years.

~~Back~~9. Investments in and Loans to ~~Index~~Affiliates — Reorganized Company

~~provide~~All ~~working~~investments ~~capital~~in ~~funding to~~which the ~~Football~~Company ~~League~~has ~~Joint~~the ~~Venture.~~ability ~~The~~to ~~Football~~exercise ~~League Limited also agreed~~significant toinfluence ~~release~~over ~~Parc~~the ~~Holdings~~investee, ~~from~~but ~~its~~less ~~guarantee~~than ofa ~~Premium~~controlling ~~TV’s~~voting ~~obligations~~interest, ~~and~~are accounted tofor ~~release~~using ~~Old NTL from~~ the ~~related~~equity ~~undertaking~~method. InEquity ~~return,~~method ~~Premium~~investments TVare ~~agreed~~recorded at tooriginal ~~waive~~ cost ~~repayment~~and ofadjusted ~~loan~~periodically ~~capital~~to byrecognize the ~~Football~~Company’s proportionate ~~League~~share ~~Joint~~of ~~Venture~~the ~~and~~investees’ tonet ~~provide~~income ~~certain~~or ~~ongoing~~losses ~~services~~after to the ~~Football~~date ~~League Joint Venture free~~ of investment, ~~charge~~additional ~~for~~contributions anmade ~~initial~~and ~~period.~~dividends ~~Parc Holdings deposited £10~~received.33 ~~million~~Prior ~~into a designated single purpose account for use by Premium TV~~ to ~~finance~~ the adoption ~~provision~~ of ~~such~~SFAS ~~services~~No. 142, ~~Premium~~the TVdifference ~~and~~between the ~~Football~~Company’s ~~League~~recorded investment ~~Limited~~and ~~also~~its ~~agreed~~proportionate tointerest ~~new~~in ~~terms~~the ~~relating~~book tovalue of the ~~distribution~~investees’ net ofassets ~~revenues~~were ~~generated~~being byamortized ~~the~~on ~~Football~~a ~~League~~straight-line ~~Joint~~basis ~~Venture~~over 10 years. The Company ~~remaining~~evaluates ~~balance in~~ the ~~account~~carrying atvalue ~~June~~of ~~30,~~its ~~2003~~equity ~~was~~method ~~£5.75~~investments ~~million (~~and ~~£8.88~~tests for ~~million~~impairment ~~at December 31, 2002) and is included~~ in ~~“Other~~accordance ~~Assets”~~with inAPB ~~the~~Opinion ~~accompanying consolidated balance sheet~~No. 18.

~~The~~Investments ~~Company~~in ~~has~~which ~~also guaranteed~~ the ~~obligations~~Company ofdoes ~~one~~not 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~~ability to ~~compulsorily acquire the Company’s indirect interest~~exercise significant ininfluence ~~the~~(less ~~relevant~~than ~~joint venture at 70~~20% ofownership) ~~fair~~are ~~market~~accounted ~~value,~~for ~~resulting~~on in the Company selling its indirect interest at a potential loss. 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 becost ~~able to retain its current interest in this joint venture company~~method. ~~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~~investments ~~holdings.~~in ~~The~~and ~~Company~~loans ~~does~~to ~~not~~affiliates ~~believe~~are ~~that~~as ~~these holdings, alone or in the aggregate, represent material assets.~~follows:

Two Way TV Limited


	September 30, 2003

	(in millions)
Total equity investments	$	13.1
Total cost investments		8.1

Total	$	$21.2

The ~~Company~~following ~~has an equity interest of approximately 38.5% in Two Way TV Limited. Two Way TV~~ is a UKdescription ~~market~~of ~~leader~~the inCompany’s ~~interactive~~major ~~and enhanced television. Enhanced television allows viewers to participate in popular games~~investments, ~~sporting~~listed ~~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.~~ subsidiary:

~~Two~~Premium ~~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.~~Limited

10Premium TV, a wholly-owned subsidiary of Parc Holdings, is obliged to provide funding of up to approximately £14.6 million ~~Investments~~($24.3 million), inat September 30, 2003, to fund various of its joint venture and ~~Loans~~other contractual interests. Of this amount, approximately £3.3 million has been guaranteed by Parc Holdings. In addition, Parc Holdings has also guaranteed approximately £13.4 million ($22.3 million) of other Premium TV commitments. If Premium TV fails to provide ~~Affiliates~~its –committed ~~Predecessor~~funding ~~Company~~under the relevant shareholder arrangements relating to these joint ventures, Premium TV and, in respect of the guaranteed amounts, Parc Holdings, may be sued for non-payment. 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.

~~During~~On September 24, 2002, inPremium ~~addition~~TV, toParc ~~the~~Holdings ~~Company’s equity~~ and ~~cost~~Old ~~investments~~NTL atagreed ~~Premium~~to TVvary ~~and~~the terms ~~its~~of ~~investment~~the inlong-term ~~Two~~joint ~~Way~~venture ~~TV Limited~~ (~~which~~referred ~~are~~to ~~more~~as ~~fully~~the ~~described~~Football inLeague ~~Note 9~~Joint Venture), ~~the~~between ~~Predecessor~~Premium ~~Company~~TV ~~had investments in various companies~~ and ~~joint~~the ~~ventures~~Football ~~which~~League ~~were~~Limited. ~~also~~Under ~~accounted~~the terms of ~~for under either~~ the ~~equity~~variation, ~~method~~upon or the ~~cost~~payment ~~method.~~of ~~The~~arrears ~~Company’s~~of ~~additional~~rights ~~equity~~fees ~~investments~~by ~~(in~~Premium ~~2002) included its 27% interest in Noos S.A.~~TV, athe Football ~~French~~League ~~broadband~~Limited ~~company,~~agreed ~~which~~to ~~offers~~release ~~analog~~Premium ~~and~~TV ~~digital~~from ~~cable television, high speed Internet and telephone services,~~ its ~~50%~~obligation to fund ~~interest~~the inpayment ~~eKabel InvestCo, which owns 65%~~ of ~~iesy~~any ~~Hessen~~further ~~GmbH~~rights ~~(“iesy”),~~fees ~~the~~to ~~largest cable television network in~~ the ~~German~~Football ~~province~~League ofLimited’s member ~~Hessen,~~teams and its ~~34.01%~~obligation ~~interest in B2 Bredband AB (publ) (“B2”), a company based in Sweden, which provides access~~ to aprovide ~~broadband~~working ~~network~~ capital ~~that~~funding ~~provides transmission, both~~ to ~~and from~~ the Football ~~customer,~~League atJoint ~~the~~Venture. ~~same~~The ~~speed~~Football ~~and~~League atLimited ~~the same time.~~also

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 Lyonnaise Télécom (“Noos”) to France Telecom as part of a compromise and settlement under the terms22 ~~of the Plan. Pursuant to the~~

23Table of Contents

~~Back~~agreed to ~~Index~~release Parc Holdings 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. In September 2002, Parc Holdings 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 September 30, 2003 was £3.81 million (and £8.88 million at December 31, 2002) and is included in “Other Assets” in the accompanying consolidated balance sheet.

~~terms~~The ofCompany ~~the~~has ~~Plan,~~also guaranteed the ~~Noos~~obligations ~~Interest~~of ~~was~~one ~~released~~of its subsidiaries to provide ~~France~~funding ~~Telecom~~of inup ~~exchange~~to ~~for~~approximately £4.2 million (i$7.0 million) ~~the~~to ~~cancellation~~a ofjoint venture whose business is the ~~shares~~provision of ~~Variable~~programming ~~Coupon~~content. ~~Redeemable~~If ~~Preferred~~the relevant ~~Stock,~~subsidiary ~~Series~~fails Ato ofprovide ~~Old~~such ~~NTL~~funding, ~~and~~under ~~shares~~the ofshareholder arrangements ~~Fixed~~relating ~~Coupon~~to ~~Redeemable~~this ~~Preferred~~joint ~~Stock~~venture, ~~Series~~such Asubsidiary ofmay ~~Old~~be ~~NTL~~sued for damages. In addition, ~~(ii)~~under the ~~waiver~~shareholder by arrangements ~~France~~relating ~~Telecom~~to ofthis joint ~~its~~venture, ~~rights~~the torelevant ~~any~~joint ~~distribution~~venture onpartner ~~account~~may ofhave ~~its~~the ~~claims~~option asto compulsorily aacquire ~~holder~~the ofCompany’s ~~Old~~indirect ~~NTL~~interest ~~and~~in ~~Parc~~the ~~Holdings~~relevant 5joint venture at 70% ~~convertible~~of ~~subordinated~~fair ~~notes~~market value, ~~(iii)~~resulting in the ~~release~~Company byselling ~~France~~its indirect ~~Telecom~~interest ofat ~~any~~a ~~contingent~~potential ~~payments~~loss. ~~due~~The Company intends to ~~France~~negotiate ~~Telecom~~with its ~~pursuant~~joint toventure ~~the~~partner 1Gto ~~Protocol~~address ~~and~~these ~~Convention~~ issues. ~~Agreement,~~These ~~dated~~negotiations ~~May~~may 6,not be ~~1999~~successful (and the ~~“1G~~Company ~~Franchises”)~~may ~~and~~not ~~the~~be ~~transfer~~able ofto ~~the~~retain 1Gits ~~Franchises~~current byinterest ~~Old~~in this ~~NTL~~joint toventure ~~Noos,~~company. ~~and~~The ~~(iv)~~relevant asubsidiary ~~$25~~has ~~million~~ceased ~~payment~~doing bybusiness and ~~France~~currently ~~Telecom~~is toin the ~~Company~~process onof ~~the~~being ~~Effective~~wound ~~Date~~up.

On ~~November 3~~July 10, ~~2002~~2003, ~~Old~~Premium ~~NTL,~~TV ~~Parc~~altered ~~Holdings,~~its ~~and~~arrangements ~~Brigadoon~~with ~~Ventures,~~Eurosport ~~Inc.,~~SA (“Eurosport”) arelating ~~wholly-owned~~to ~~subsidiary~~the ofBritish ~~Parc~~Eurosport ~~Holdings,~~television ~~entered~~channel. ~~into~~The an 1998 agreement, ~~whereby~~between ~~(1)~~the ~~Old~~parties ~~NTL~~ was ~~entitled~~terminated toby ~~receive~~mutual aconsent ~~cash~~along ~~facilitation~~with ~~fee for its cooperation in~~ the ~~restructuring of iesy and its subsidiaries~~ related ~~(but~~Parc ~~not~~Holdings inparent ~~consideration~~company ofguarantee. ~~certain~~This ofreduced ~~Old~~Parc ~~NTL~~Holdings’s total ~~subsidiaries’~~guarantee ~~indirect~~commitments ~~equity~~to ~~stake~~subsidiaries inby ~~iesy) of approximately $1~~£8 million.3 ~~million,~~Each ~~less such subsidiaries’ pro rata share~~ of ~~expenses~~the ~~and~~parties waived ~~(2)~~any ~~such~~entitlement ~~subsidiaries~~it ~~were~~might ~~entitled~~have had to ~~receive~~further apayment ~~release~~under ofthe ~~possible liabilities and claims arising out of their~~1998 agreement. ~~indirect~~In ~~equity~~its ~~stake in iesy~~place, ~~including~~Premium ~~claims~~TV ~~alleged~~and byEurosport ~~certain~~entered ~~holders~~into ofa ~~notes~~new ofagreement under ~~iesy~~which inPremium ~~the~~TV ~~bankruptcy.~~provides ~~The~~consultancy ~~transactions~~services ~~contemplated~~to byEurosport ~~the iesy agreement closed~~ in ~~January 2003. In addition~~ relation to the ~~Company’s~~distribution ~~share~~ of ~~iesy’s~~British ~~losses,~~Eurosport ~~share~~and ofstrategic ~~losses~~development ~~from~~in ~~equity investments includes a~~areas such ~~non-cash~~as ~~write-down of~~ the ~~investment~~Internet inand ~~iesy~~mobile ~~of $40~~telephony.~~6 million in 2002.~~

B2On ~~Bredband~~October 15, AB2003, Premium TV revised its arrangements with Aston Villa plc. The Convertible Loan Agreement between the parties, dated January 24, 2000, which entitled Premium TV to repayment on or after February 21, 2005, by conversion into ordinary shares representing 9.999% of the enlarged share capital of Aston Villa, was terminated with the payment from Aston Villa of £2.3m to Premium TV. The terms of the Rights Agreement, dated January 24, 2000, were amended such that the grant by Aston Villa of Internet and certain mobile and delayed broadcast rights to Premium TV was extended to June 30, 2007. The appointment of Premium TV (~~publ~~Ventures) (a wholly owned subsidiary of Premium TV) as exclusive agent for certain other rights was terminated by mutual consent. The parties also settled various outstanding payments between them, resulting in a further cash net receipt by Premium TV.

OnThe ~~April~~following ~~15,~~is ~~2002,~~ a ~~funding~~brief ~~request~~description ~~for approximately $20 million was received by Old NTL under the terms~~ of the ~~investment agreement relating to Old NTL~~Company’s ~~investment~~minority ~~in B2~~holdings. ~~Old~~The Company ~~NTL~~does ~~informed B2 and the other principal investors that it was~~ not inbelieve ~~a position to comply with the request for funding. The B2 investment agreement provides~~ that ifthese ~~Old NTL fails to provide such funding~~holdings, italone ~~may~~or bein ~~sued for non-payment and arguably could lose certain rights under~~ the B2aggregate, represent ~~shareholders’~~material ~~agreement including its interest in B2~~assets.

OnTwo ~~October~~Way 4,TV 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 NovemberLimited 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.

OnTwo ~~April~~Way ~~30,~~TV ~~2003,~~Limited ~~Parc~~is ~~Holdings,~~a ~~together~~UK ~~with~~market ~~its~~leader ~~subsidiaries~~in ~~NTL~~interactive ~~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~~enhanced ~~in B2~~television. ~~Under~~Enhanced ~~the~~television ~~agreement,~~allows ~~the~~viewers ~~NTL Europe parties have agreed~~ to ~~transfer~~participate ~~their interest~~ in ~~B2 to certain other shareholders of B2 in exchange for approximately $375~~popular games,~~000~~ insporting ~~cash~~events ~~or certain securities of a B2 affiliate~~ and ~~mutual~~reality ~~releases~~television ~~among the parties relating to a dispute stemming from an April 15, 2002 funding request for approximately $20 million~~programs. InViewers ~~connection~~can ~~with the mutual releases~~vote, guess ~~the~~answers ~~agreement provides that B2~~ and ~~the~~compete ~~other~~with ~~principal~~studio ~~shareholders~~contestants ~~will~~by ~~withdraw,~~using ora ~~otherwise~~remote ~~assist Parc Holdings in obtaining bankruptcy court denial of, the proofs of~~control device ~~claim~~for ~~filed by B2 and~~ the ~~other~~set ~~principal~~top ~~shareholders~~box in ~~the~~all ~~bankruptcy~~digital ~~court.~~delivery ~~The closing of this transaction took place in May 2003~~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.

~~Back to Index~~23

TheTable Predecessorof Company’s investments in and loans to affiliates are as follows:Contents

	December 31, 2002					June 30, 2002
	Ownership			Balance		Ownership			Balance
	(in millions)
Noos		27.00	%	$	—		27.00	%	$	18.1
B2		34.01	%		—		34.01	%		76.0
Iesy		32.50	%		—		32.50	%		49.6
Others					4.7					56.0
Total equity investments					4.7					199.7
Total cost investments					8.3					7.6
Total				$	13.0				$	207.3

Prior to October 22, 2003, the Company owned approximately 36.3% of Two Way TV. On October 22, 2003, in order to address various issues Two Way TV had with certain of its creditors, Two Way TV filed for administration under UK law. At an auction held by the administrator on November 14, 2003, Two Way Media Limited, a newly-formed company, approximately 44.6% of which is owned by the Company, acquired substantially all of the assets of Two Way TV.

~~The Predecessor Company had reclassified $18~~10.3 ~~million~~Investments ofin ~~credit balances to “Other Long-Term Liabilities,” (at December 31, 2002) which related to investments where the Company has funding commitments~~ and ~~losses~~Loans to ~~date,~~Affiliates ~~which~~– ~~have~~Predecessor ~~exceeded the~~ Company~~’s investment.~~

11During 2002, in addition to the Company’s equity and cost investments at Premium TV and its investment in Two Way TV Limited (which are more fully described in Note 9), the Predecessor Company had investments in various companies and joint ventures which were also accounted for under either the equity method or the cost method. ~~Liabilities~~The ~~Subject~~Company’s additional equity investments (in 2002) included 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 AB (publ) (“B2”), a company based in Sweden, which provides access to ~~Compromise~~a broadband network that provides transmission, both to and from the customer, at the same speed and at the same time.

~~Liabilities~~During ~~subject~~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 Lyonnaise Télécom (“Noos”) to France Telecom as part of a compromise ~~consist~~and settlement under the terms of the ~~following:~~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 Parc Holdings 53/4% 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.

	June 30, 2003		December 31, 2002
	Reorganized Company		Predecessor Company
	(unaudited)
	(in millions)
Account 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.:
5¾% Convertible Subordinated Notes		—		100.0
NTL Delaware, Inc.:
5¾% Convertible Subordinated Notes		—		1,200.0
Total	$	—	$	4,294.1

On November 3, 2002, Old NTL, Parc Holdings, and Brigadoon Ventures, Inc., a wholly-owned subsidiary of Parc Holdings, 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.

~~Upon~~B2 ~~emergence~~Bredband ~~from~~AB ~~Chapter 11 reorganization and in accordance with the Plan, all of the outstanding preferred stock of the Company and long-term debt of the Company and Parc Holdings was cancelled.~~(publ)

12On 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. ~~Long~~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-~~Term~~payment ~~Debt~~and arguably could lose certain rights under the B2 shareholders’ agreement including its interest in B2.

~~Long-term~~On ~~debt~~October 4, ~~exclusive~~2002, ofOld ~~amounts~~NTL ~~subject~~filed a motion with the bankruptcy court to ~~compromise,~~reject the ~~consisted~~B2 investment agreement and shareholders’ agreement under section 365 of: the bankruptcy code, and the bankruptcy

	June 30, 2003			December 31, 2002
	Reorganized Company			Predecessor Company
	(in millions)
Cablecom:
Term Loan Facility	$	2,014.3		$	1,951.8
Revolving Facility		787.1			762.7
Other		5.0			4.8
		2,806.4			2,719.3
Less: Fair value adjustment		(1,341.8	)		—
Plus: Debt Accretion to June 30, 2003		1,345.0			—
		2,809.6			—
Less current portion		(2,809.6	)		(2,719.3	)
	$	—		$	—

25Table of Contents

~~Back~~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 ~~Index~~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.

~~Under~~On ~~the~~April 30, ~~provisions~~2003, ofParc ~~Fresh Start Accounting~~Holdings, ~~the~~together ~~Reorganized~~with ~~Company~~its ~~recorded~~subsidiaries ~~the~~NTL ~~Cablecom~~Sweden ~~debt~~SPV Inc. atand ~~its~~Nogenta ~~estimated~~Swedish ~~fair~~Acquisition ~~value~~Holding B.V., ~~resulting~~entered ininto aan ~~gain~~agreement with onB2 ~~January~~and 1,the ~~2003~~other principal shareholders of $1B2 relating to,~~341.8~~ ~~million.~~among ~~Substantially~~other things, ~~all~~the transfer of ~~Cablecom~~the Company’s ~~debt~~securities ~~was~~in ~~due~~B2. onUnder ~~April~~the 30agreement, the ~~2003~~NTL ~~(although~~Europe ~~subsequent~~parties ~~extensions~~ have ~~granted~~agreed byto ~~Cablecom’s~~transfer ~~lenders~~their ~~have~~interest ~~delayed~~in ~~the~~B2 ~~maturity~~to ~~date~~certain other toshareholders ~~October~~of ~~31,~~B2 ~~2003).~~in ~~During~~exchange ~~2003~~for approximately $375,000 ~~the~~in ~~Reorganized~~cash ~~Company~~or certain ~~was~~securities ~~required~~of toa ~~accrete~~B2 ~~Cablecom’s~~affiliate ~~outstanding~~and ~~debt~~mutual ~~back~~releases toamong ~~its~~the ~~full~~parties relating ~~face~~to ~~value~~a atdispute ~~its~~stemming ~~maturity~~from ~~date~~an (April 30 15, ~~2003)~~2002 funding request for approximately $20 million. ~~Therefore~~In connection with the mutual releases, ~~during~~the agreement provides that B2 and the ~~first~~other ~~six~~principal ~~months~~shareholders of will ~~2003~~withdraw, or ~~the~~otherwise ~~Reorganized~~assist ~~Company~~Parc ~~charged~~Holdings ~~Interest~~in ~~Expense~~obtaining ~~for~~bankruptcy ~~approximately~~court $1denial of,~~345.0~~ ~~million~~the proofs toof ~~reflect~~claim filed by B2 and the ~~accreted~~other ~~value~~principal ofshareholders in the bankruptcy ~~Cablecom~~court. ~~debt~~The atclosing ~~June~~of ~~30,~~this transaction took place in May 2003.

InThe ~~March~~Predecessor ~~2000,~~Company’s ~~Cablecom~~investments ~~borrowed CHF 2,700.0 million ($1,951.8 million) at December 31, 2002 under its term loan facility~~ in ~~connection~~and ~~with~~loans ~~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.~~affiliates ~~The~~are effective interest rate was 3.51% at December 31, 2002. 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 October 31, 2003.as follows:

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, Cablecom had borrowed CHF 1,055.0 million ($762.7 million) 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% at December 31, 2002. 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 October 31, 2003.


	December 31, 2002

	Ownership			Balance

				(in millions)
Noos		27.00	%	$	–
B2		34.01	%		–
Iesy		32.50	%		–
Others					4.7

Total equity investments					4.7
Total cost investments					8.3

Total				$	13.0

AsThe ~~described~~Predecessor inCompany ~~more~~had ~~detail~~reclassified in$18.3 million ~~Note~~of ~~16,~~credit ~~Cablecom~~balances ~~does not have sufficient resources~~ to “Other ~~satisfy~~Long-Term ~~these bank obligations. In addition~~Liabilities, ~~Cablecom and certain of its subsidiaries are “overindebted~~” ~~under~~(at ~~Swiss law and~~December 31, ~~accordingly,~~2002) ~~may~~which berelated ~~required~~ to ~~file for insolvency proceedings in~~ investments ~~Switzerland.~~where ~~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~~Company ofhas ~~bank~~funding ~~debt~~commitments ~~outstanding, extend the maturity date thereof~~ and ~~resolve~~losses ~~the Swiss overindebtedness issue. The proposed restructuring is subject~~ to ~~various closing conditions~~date, ~~including the negotiation, completion and execution of definitive documentation. Cablecom’s lenders~~ which have ~~also~~exceeded ~~agreed to a moratorium on~~ the ~~payment of interest and commitment commission accruing between May 30, 2003 and the date on which Cablecom~~Company’s ~~credit agreement is restated as part of the financial restructuring (when a portion of the accrued amounts will be added to the principal amount of the facility)~~investment. ~~If Cablecom is subject to an insolvency proceeding before its~~ ~~credit agreement is restated, Cablecom’s lenders have agreed to waive such interest and commitment commission.~~

In the event that the proposed restructuring is completed, the Company expects that its remaining interest in Cablecom will be acquired for an amount not in excess of $15 million. If such proposed restructuring is unsuccessful, the Company expects to be deprived of all its ownership25 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 or distributions 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.~~

26Table of Contents

~~Back~~11. Liabilities Subject to ~~Index~~Compromise

~~13.~~Liabilities ~~Mandatorily~~subject ~~Redeemable~~to ~~Preferred~~compromise ~~Stock~~consist of the following:

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 (plus an additional approximate $17.2 million of accrued and unpaid dividends as of June 30, 2003), which is equal to 6,864,000 shares of Preferred Stock. The redemption date of such mandatorily redeemable preferred stock is January 10, 2023.


			September 30, 2003		December 31, 2002

			Reorganized Company		Predecessor Company

			(unaudited)
			(in millions)
Account 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.:
		53/4% Convertible Subordinated Notes		–		100.0
	NTL Delaware, Inc.:
		53/4% Convertible Subordinated Notes		–		1,200.0

Total			$	–	$	4,294.1

~~Each~~Upon ~~share~~emergence offrom ~~the~~Chapter 11 ~~Fixed~~reorganization ~~Coupon Redeemable Preferred Stock entitles its holder to receive cumulative dividends, when, as~~ and ifin ~~declared~~accordance bywith the ~~board of directors~~Plan, all ~~out~~ of ~~funds~~the ~~legally~~outstanding ~~available~~preferred ~~for~~stock ~~the payment~~ of ~~dividends.~~the ~~With~~Company ~~respect~~and tolong-term ~~those~~debt ~~dividends,~~of the ~~Preferred Stock will rank~~ Company ~~senior~~and toParc ~~all~~Holdings ~~classes~~was ~~of the Company’s Common Stock~~cancelled.

~~Dividends are payable at the semi-annual rate of $2~~12.50 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 at a 10% annual rate and are compounded on a semiLong-~~annual~~Term ~~basis until paid or satisfied in full from the date of issue whether or not they have~~Debt ~~been declared and whether or not there are profits, surplus or other funds legally available for the payment of such dividends.~~

NoLong-term ~~dividends or distributions may be declared~~debt, ~~made,~~exclusive ~~paid or set apart for payment upon any~~ of ~~the~~amounts ~~Company’s~~subject ~~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) unlesscompromise, inconsisted ~~each case~~of: ~~(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.

14. Comprehensive Loss


		September 30, 2003			December 31, 2002
		Reorganized			Predecessor
		Company			Company

		(in millions)
Cablecom:
	Term Loan Facility	$	2,063.8		$	1,951.8
	Revolving Facility		806.5			762.7
	Other		5.1			4.8

			2,875.4			2,719.3
Less: Fair value adjustment			(1,341.8	)		—
Plus: Debt Accretion to September 30, 2003			1,341.8			—

			2,875.4			—
Less current portion			(2,875.4	)		(2,719.3	)

		$	—		$	—

~~The~~Under the provisions of Fresh Start Accounting, the Reorganized Company recorded the Cablecom debt at its estimated fair value, resulting in a gain on January 1, 2003 of $1,341.8 million. Substantially all of Cablecom’s ~~comprehensive~~debt ~~loss~~was initially due on April 30, 2003 and had been extended to November 18, 2003. During 2003, the Reorganized Company was asrequired ~~follows:~~to accrete Cablecom’s outstanding debt back to its full face value at its maturity date (April 30, 2003). Therefore, during the first nine months of 2003, the Reorganized Company charged Interest Expense for approximately $1,341.8 million to reflect the accreted value of the Cablecom debt at September 30, 2003.

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
	Reorganized Company			Predecessor Company			Reorganized Company			Predecessor Company
	(in millions of dollars)
Net loss for the period	$	(390.5	)	$	(556.1	)	$	(1,427.9	)	$	(1,162.0	)
Currency translation adjustments		13.6			362.8			3.5			(754.6	)
Unrealized gain (loss) on investments		—			(2.1	)		—			(17.1	)
Unrealized gain (loss) on derivatives		2.6			(7.3	)		0.2			(23.4	)
	$	(374.3	)	$	(202.7	)	$	(1,424.0	)	$	(1,957.1	)

In March 2000, Cablecom borrowed CHF 2,700.0 million ($1,951.8 million) at December 31, 2002 under its term loan facility in connection with the acquisition of the Cablecom business. Interest was payable at least every six months at Swiss LIBOR plus a margin rate of 2.5% per annum, which is subject to

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15adjustment. ~~Related~~The ~~Party~~effective ~~Transactions~~interest rate was 3.51% at December 31, 2002. The term loan facility was originally scheduled to mature on April 30, 2003 and had been extended to November 18, 2003

OnCablecom ~~June~~had ~~23, 2003,~~ the ~~Company’s~~option ~~board~~to ~~held~~draw aon ~~meeting in which they discussed the exploration of~~ a ~~going~~revolving ~~private~~facility ~~transaction and the formation~~ of aup ~~special committee~~ to ~~consider~~an ~~alternatives~~additional CHF ~~in a going private transaction~~1,400 million. ByThe ~~action~~amount ~~taken~~available byhad ~~unanimous~~been ~~written~~capped ~~consent~~at onCHF ~~June 23~~1, ~~2003,~~055 million although the ~~board~~availability ~~established~~may abe ~~special~~increased ~~committee~~ with ~~Michael~~the ~~Cochran,~~consent ~~a member~~ of the ~~board,~~requisite majority asof ~~its~~the ~~sole, independent member~~lenders. ~~The~~At ~~board~~December 31, ~~charged~~2002, ~~the~~Cablecom ~~special~~had ~~committee~~borrowed ~~with reviewing~~CHF 1,055.0 million ~~considering,~~($762.7 million) ~~investigating, evaluating, negotiating~~ and ~~recommending~~Cablecom ~~action~~has tosubsequently ~~the~~borrowed ~~entire~~an additional ~~board~~CHF ~~with~~ 37 million ~~respect~~for toaccrued ~~one~~interest orpayments. ~~more~~Interest ~~possible~~was ~~going~~payable at ~~private~~least ~~transactions.~~every Bysix ~~July~~months 1,at ~~2003,~~Swiss ~~the~~LIBOR ~~special~~plus ~~committee~~a ~~had~~margin ~~retained~~rate ~~its~~of ~~own~~2.5% ~~legal~~per ~~counsel~~annum, which ~~McKenna~~was ~~Long~~subject &to ~~Aldridge~~adjustment. ~~LLP,~~The ~~and~~effective ~~financial~~rate ~~advisor,~~of ~~Morgan~~interest ~~Joseph~~was ~~& Co~~3.71% ~~Inc.~~at December 31, to2002. ~~advise~~The itunused inportion ~~connection~~of ~~with~~the ~~its~~commitment ~~duties.~~was ~~Since~~subject ~~March~~to ~~2003, Sean~~a commitment ~~Mathis,~~fee ~~a director~~ of ~~the~~0.75% ~~Company~~payable quarterly, ~~has~~which ~~been~~was ~~affiliated~~reduced ~~with~~to ~~Morgan~~0.50% ~~Joseph~~when &over 50% ~~Co.~~of ~~Inc.~~the Mrcommitment was utilized. ~~Cochran~~The ~~has~~revolving ~~advised~~facility ~~the~~was ~~Company~~originally scheduled ~~that,~~to ~~effective~~mature ~~September~~on 15April 30, 2003, heand ~~will~~had ~~become~~been Ofextended ~~Counsel~~ to ~~McKenna Long & Aldridge LLP~~November 18, 2003.

OnAs ~~the~~described ~~Effective~~in ~~Date,~~more ~~the~~detail ~~Company~~in ~~entered~~Note ~~into a Transitional Services Agreement with New NTL. Under the Transitional Services Agreement~~16, ~~New~~prior ~~NTL has agreed~~ to ~~provide~~ the ~~Company~~November 12, ~~with~~2003 restructuring, ~~certain~~Cablecom ~~administrative~~did ~~and~~not ~~technical~~have ~~support~~sufficient ~~for~~resources ato ~~limited~~satisfy ~~period~~these ~~of time where its~~bank obligations. ~~personnel~~In ~~had~~addition, ~~previously~~prior ~~been providing support~~ to the ~~companies~~November 12, ~~now~~2003 ~~comprised~~restructuring, Cablecom ~~within~~and ~~the~~certain ~~Company’s group~~ of ~~companies.~~its ~~New~~subsidiaries ~~NTL~~were ~~has~~“overindebted” ~~agreed~~under toSwiss ~~provide the Company with support if~~ law and, ~~when~~accordingly, ~~requested~~but infor the ~~following~~recent ~~areas: accounting~~restructuring, ~~payroll~~could ~~and~~have ~~financial~~been ~~reporting~~required ~~support,~~to file ~~technical~~for ~~and~~insolvency ~~purchasing~~proceedings ~~assistance~~in toSwitzerland. ~~the~~Accordingly, ~~Company’s~~during ~~Spanish~~the ~~business~~past year, ~~access~~Cablecom ~~to New NTL’s internal legal~~ and ~~tax~~its ~~advisors~~lenders ~~with~~had ~~respect~~been toinvolved ~~historic matters and continued support~~ in ~~the~~ongoing ~~management~~discussions regarding ~~and~~a ~~monitoring~~complete offinancial ~~certain~~restructuring of ~~the~~Cablecom ~~joint ventures in~~ which ~~the~~would ~~Company has investments.~~have, among ~~This~~other ~~agreement~~things, ~~provides~~reduced ~~that~~the ~~New~~amount ~~NTL’s~~of ~~employees~~bank ~~shall,~~debt ~~as appropriate~~outstanding, ~~prioritize~~extended ~~work~~the maturity ~~performed~~date ~~for~~thereof ~~New~~and ~~NTL~~resolved ~~ahead~~the ofSwiss ~~work~~overindebtedness ~~performed on behalf of the Company~~issue.

InA ~~addition,~~restructuring ~~under~~of ~~the~~Cablecom’s ~~Transitional~~debt ~~Services~~and ~~Agreement,~~equity ~~New~~was ~~NTL~~completed ~~provided~~on ~~the~~November 12, 2003. ~~services~~As ofa ~~five~~result, ofeffective ~~its~~November 19, ~~employees~~2003, ~~(two~~the ofCompany ~~which~~will ~~provided~~no ~~services~~longer have asany ofremaining ~~June~~interest ~~30,~~in ~~2003)~~Cablecom toand the Company ~~seconded~~expects onto areceive ~~full-time basis for~~ a payment ~~period~~ of up$15 million. ~~to two years~~ (atSee ~~the~~Note ~~Company’s~~19 ~~option)~~– ~~and~~“Cablecom ~~permits the~~Restructuring.”) Accordingly, ~~Company~~from and ~~its~~after ~~group~~November 12, of2003, ~~companies~~the toresults ~~continue~~of toCablecom ~~use~~will ~~the~~no longer ~~“NTL”~~be ~~name~~reported ~~for~~as apart ~~period~~ of upthe toCompany’s ~~one~~consolidated ~~year,~~results inof ~~the~~operations and ~~case~~Cablecom ofwill ~~NTL~~be ~~Europe,~~treated ~~and~~as ~~three~~a ~~years,~~discontinued operation beginning in the fourth ~~case~~quarter of ~~certain other of its subsidiaries~~2003.

~~The~~13. ~~Company~~Mandatorily ~~pays~~Redeemable ~~New~~Preferred 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.Stock

OnThe ~~September~~Company’s 28charter authorizes the issuance of 8,000,000 ~~2001~~shares of 10% Fixed Coupon Redeemable Preferred Stock, ~~NTL~~par ~~Communications~~value ~~Corp~~$0.01 ~~loaned~~per ~~Old~~share. ~~NTL~~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 $~~150~~25 million of liquidation preference of the Preferred Stock pursuant to the Plan.0 Immediately after such redemption, approximately $343 million inof ~~cash~~liquidation preference ~~and~~of ~~received~~the ~~15.0%~~Preferred ~~Promissory~~Stock ~~Notes~~remained ~~due~~outstanding. ~~September~~At September 30, ~~2004.~~2003, the ~~Interest~~liquidation preference was ~~payable~~$351.8 million ~~monthly~~for inthe ~~cash~~6,864,000 atshares aof Preferred ~~rate~~Stock (exclusive of 15the $17.0%2 million ~~per~~of ~~annum~~dividends ~~beginning~~payable, which was paid on October 31 15, ~~2001~~2003). ~~Upon~~The ~~emergence~~redemption ~~from~~date of such mandatorily redeemable preferred ~~Chapter~~stock 11is ~~reorganization~~January 10, ~~and~~2023. inIn accordance with Financial Accounting Standards No. 150 “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which became effective on July 1, 2003, the ~~Plan~~Company’s mandatorily redeemable preferred stock has been treated as debt in the Company’s financial statements since that date. Therefore, ~~these~~from July 1, ~~notes~~2003 ~~were~~forward, ~~cancelled~~dividends and accretion have been (and will continue to be) included in interest expense.

OnEach ~~April~~share ~~5, 2002, following receipt~~ of the ~~proceeds~~Fixed ~~from~~Coupon ~~the~~Redeemable ~~sale~~Preferred ofStock ~~NTL~~entitles ~~Australia,~~its ~~Parc Holdings loaned £90.0 million~~ holder to ~~NTL~~receive ~~(UK)~~cumulative ~~Group~~dividends, ~~Inc. Such loan was actually made (with the approval of the lenders under the UK credit facilities) to NTL (UK) Group~~when, ~~Inc.~~as and ~~then~~if ~~on-lent~~declared to by ~~certain~~the ~~subsidiaries~~board of ~~NTL (UK) Group~~ directors, ~~Inc.~~out ~~Interest on the note was at 23% per annum, compounded semiannually, and was payable, in cash, on the earlier~~ of ~~April~~funds 1,legally ~~2006~~available orfor the ~~redemption~~payment ~~date~~ of ~~the notes~~dividends. InWith respect ~~connection~~to ~~with~~those ~~the DIP facility~~dividends, the ~~current~~Preferred ~~interest~~Stock ~~rate~~will onrank ~~this~~senior ~~loan had been reduced from 23% per annum~~ to ~~11%~~all ~~per~~classes of ~~annum. Upon emergence from Chapter 11 reorganization and in accordance with~~ the ~~Plan,~~Company’s ~~such~~Common ~~debt was repaid~~Stock.

~~Pursuant~~Dividends toare ~~the~~payable ~~DIP~~at ~~facility,~~the ~~all~~semi-annual ~~funding~~rate ~~needs~~ of ~~the~~$2.50 ~~debtors~~per ~~were~~share ~~funded~~(subject ~~through~~to adjustment ~~the~~for ~~proceeds~~stock ofsplits, ~~the~~stock ~~DIP~~dividends, ~~facility~~combinations, inrecapitalizations or ~~accordance~~other ~~with~~similar atransactions) ~~budget~~payable ~~and~~by the ~~terms~~Company ~~of the DIP facility agreement. Communications Cable~~in

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~~Funding Corp~~cash. ~~had~~Dividends ~~entered~~on the ~~into~~Preferred ~~intercompany~~Stock ~~note~~are ~~agreements~~payable ~~with~~on ~~Old~~a ~~NTL~~pro ~~and~~rata ~~Parc~~basis ~~Holdings~~with respect to ~~evidence~~shares ~~such~~of the ~~transactions.~~Preferred ~~The~~Stock ~~notes~~in ~~earned~~arrears ~~interest~~ on ~~the~~June 30 ~~unpaid~~and ~~principal~~December 31 ~~amount~~of ~~for~~each ~~three~~year (commencing ~~months~~on ~~from July 15~~June 30, ~~2002~~2003) atand ~~the~~are ~~rate~~cumulative ofat 11a 10% ~~per~~annual ~~annum.~~rate ~~With~~and ~~respect to each successive~~are compounded ~~three~~on ~~month~~a ~~period~~semi-annual ~~following~~basis ~~that~~until ~~date,~~paid ~~the~~or ~~rate~~satisfied ~~per~~in ~~annum~~full ~~increased~~from ~~incrementally by 1% over~~ the ~~immediately~~date of ~~preceding~~issue ~~three~~whether ~~month~~or ~~period but will~~ not ~~exceed~~they ~~18%~~have ~~per~~been ~~annum~~declared ~~for~~and ~~any~~whether ~~three~~or ~~month~~not ~~period.~~there ~~Upon~~are profits, ~~emergence~~surplus ~~from~~or ~~Chapter~~other 11funds ~~reorganization~~legally ~~and~~available infor ~~accordance with~~ the ~~Plan,~~payment ~~such debt in the amount~~ of ~~$69~~such dividends.~~3 million was repaid.~~

~~Certain~~No ~~former~~dividends ~~officers~~or ~~and~~distributions ~~directors~~may ofbe ~~Old~~declared, ~~NTL~~made, ~~were~~paid ~~also~~or ~~officers~~set ~~and~~apart ~~directors~~for payment ofupon ~~ATX~~any ~~Communications,~~of ~~Inc.~~the ~~(“ATX”)~~Company’s ~~(formerly~~stock ~~known~~ranking ason ~~CoreComm~~parity ~~Holdco,~~with ~~Inc.).~~the ~~On April 12~~Preferred Stock, ~~2001,~~nor ~~Old~~may ~~NTL~~any ~~purchased~~stock ~~$15.0~~ranking ~~million~~on ofparity anwith ~~unsecured~~the ~~convertible~~Preferred ~~note~~Stock ~~from ATX and received~~be redeemed, ~~warrants~~purchased toor ~~purchase~~otherwise ~~770,000~~acquired ~~shares~~for ofany ~~ATX~~consideration ~~common~~(or ~~stock~~any atmonies paid anto ~~exercise~~or ~~price~~made ofavailable ~~$0.01~~for ~~per~~a ~~share~~sinking ~~that~~fund ~~expire~~for inthe ~~April~~redemption ~~2011.~~of Inany ~~addition,~~parity securities) ~~concurrently~~by ~~with~~ the ~~note~~Company ~~purchase~~(except ~~and~~by ~~without~~conversion ~~additional~~into ~~compensation,~~or ~~Old~~exchange ~~NTL~~for ~~entered~~the Company’s ~~into~~stock aranking ~~network~~on ~~and~~parity ~~software agreement~~ with ~~ATX.~~the ~~Under~~ Preferred ~~the~~Stock) ~~agreement~~unless, ~~ATX~~in ~~will~~each case: ~~provide~~(i) full ~~U.S.~~cumulative ~~network~~dividends ~~for~~on ~~Internet~~all ~~traffic~~outstanding ~~from~~shares ~~Old~~of ~~NTL’s~~the UKPreferred Stock ~~customers~~have ~~for~~been ~~three~~paid ~~years,~~or asset ~~well~~apart asfor apayment ~~royalty~~for ~~free~~all ~~license~~dividend topayment ~~use~~periods terminating ~~certain~~on ~~billing~~or ~~and~~prior ~~provisioning~~to ~~software~~the ~~and~~date ~~know-how.~~of ~~Interest on~~ the ~~notes~~declaration, ~~is at 10.75% per annum~~payment, ~~payable semiannually~~redemption, purchase ~~beginning~~or onother ~~October~~acquisition ~~15,~~and ~~2001.~~(ii) the ~~The~~Company ~~interest~~ is ~~payable~~not in ~~kind~~default bywith respect ~~the~~to ~~issuance~~any ofobligation ~~additional~~to ~~notes~~redeem inthe ~~such~~Preferred ~~principal~~Stock. ~~amount~~Notwithstanding ~~equal~~the foregoing, toif the ~~interest~~Company ~~payment that~~ is ~~then~~not ~~due.~~in ~~The~~default ~~notes~~with ~~are~~respect ~~convertible into ATX common stock prior~~ to ~~maturity~~any atredemption aof shares ~~conversion price~~ of ~~$1.00~~the ~~per~~Preferred ~~share~~Stock, ~~subject~~ dividends tomay ~~adjustment.~~be ~~Additional~~declared ~~notes~~and ~~issued~~paid or set apart for ~~interest~~payment ~~will~~on ~~have~~shares anof ~~initial~~parity ~~conversion~~securities ~~price~~if, ~~equal~~dividends todeclared ~~120%~~upon shares of the ~~weighted~~Preferred ~~average~~Stock ~~closing~~and ~~price~~all ofdividends ~~ATX~~declared ~~common~~upon ~~stock~~any ~~for~~parity asecurities are ~~specified~~declared ~~period.~~ratably ~~Old~~in ~~NTL~~proportion ~~and~~to ~~ATX~~the ~~agreed~~respective toamounts ~~certain~~of ~~modifications~~dividends accumulated toand ~~the~~unpaid ~~conversion~~on ~~feature~~the inPreferred ~~connection~~Stock ~~with~~ and ~~ATX’s~~accumulated ~~recapitalization~~and inunpaid ~~December~~on such ~~2001~~parity securities.

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 benefits14. ~~Premium~~Comprehensive ~~TV has a co-marketing agreement~~Loss ~~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.~~

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~~comprehensive ~~rely~~loss onwas ~~New~~as ~~NTL’s Singapore office for administration and other support services. The Company has entered into~~follows: ~~an agreement to jointly NTL Asia with New NTL.~~

16. Commitments and Contingent Liabilities


	Three Months Ended September 30,						Nine Months Ended September 30,

	2003			2002			2003			2002

	Reorganized			Predecessor			Reorganized			Predecessor
	Company			Company			Company			Company

	(in millions of dollars)
Net loss for the period	$	(17.0	)	$	(448.8	)	$	(1,444.9	)	$	(1,610.8	)
Currency translation adjustments		(40.5	)		102.0			(37.0	)		(652.6	)
Unrealized gain (loss) on investments		–			(0.8	)		–			(17.9	)
Unrealized gain (loss) on derivatives		(8.6	)		(7.6	)		(8.4	)		(31.0	)

	$	(66.1	)	$	(355.2	)	$	(1,490.3	)	$	(2,312.3	)

~~The Company is involved in certain disputes and litigation arising in the ordinary course of its business~~15. ~~With~~Related ~~the~~Party ~~possible exception of the specific items discussed below, none of the matters are expected to have a material adverse effect on the Company’s financial position, results of~~Transactions ~~operations or cash flows.~~

29On June 23, 2003, the Company’s board held a meeting in which they discussed the exploration of a going private transaction and the formation of a special committee to consider alternatives in a going private transaction. By action taken by unanimous written consent on June 23, 2003, the board established a special committee with Michael Cochran, a member of the board, as its sole, independent member. The board charged the special committee with reviewing, considering, investigating, evaluating, negotiating and recommending action to the entire board with respect to one or more possible going private transactions. By July 1, 2003, the special committee had retained its own legal counsel, McKenna Long & Aldridge LLP, and financial advisor, Morgan Joseph & Co. Inc., to advise it in connection with its duties. Since March 2003, Sean Mathis, a director of the Company, has been affiliated with Morgan Joseph & Co. Inc. Mr. Cochran has advised the Company that, effective September 15, 2003, he became Of Counsel to McKenna Long & Aldridge LLP.

~~Back~~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 ~~Index~~provide the Company with certain

~~Morgan Stanley~~28

InTable 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, Parc Holdings 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.Contents

B2administrative ~~Bredband~~and ABtechnical ~~(publ)~~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.

OnIn ~~April 15~~addition, ~~2002,~~under athe ~~funding~~Transitional ~~request~~Services ~~for~~Agreement, ~~approximately~~New ~~$20~~NTL ~~million~~provided ~~was~~the services ~~received~~of byfive ~~Old~~of ~~NTL~~its ~~under~~employees ~~the~~(two ~~terms~~ of ~~the~~which ~~investment~~provided ~~agreement~~services ~~relating~~as toof ~~Old~~June 30, ~~NTL’s~~2003) ~~investment~~to inthe ~~B2.~~Company ~~Old~~seconded ~~NTL~~on ~~informed~~a B2full-time ~~and~~basis ~~the~~for ~~other~~a ~~principal~~period ~~investors~~of ~~that~~up itto two ~~was~~years ~~not~~(at inthe aCompany’s ~~position~~option) toand ~~comply~~permits ~~with~~ the ~~request~~Company ~~for~~and ~~funding.~~its ~~The~~group B2of companies ~~investment~~to ~~agreement~~continue ~~provides~~to ~~that~~use ifthe ~~Old~~ “NTL” ~~fails~~name tofor ~~provide~~a ~~such~~period ~~funding,~~of itup ~~may~~to beone ~~sued~~year, ~~for~~in the ~~non-payment~~case ~~and~~of ~~arguably~~NTL ~~could~~Europe, ~~lose~~and ~~certain~~three ~~rights~~years, ~~under~~in the B2case ~~shareholders’~~of ~~agreement~~certain ~~including~~other ~~its~~of ~~interest in B2~~its subsidiaries.

OnThe ~~October~~Company 4,pays ~~2002,~~New ~~Old~~ NTL ~~filed~~pre-determined acharges ~~motion~~set ~~with~~out ~~the~~in ~~bankruptcy court to reject~~ the B2Transitional Services ~~investment~~Agreement ~~agreement~~in ~~and~~respect ~~shareholders’ agreement under section 365~~ of the ~~bankruptcy~~services ~~code,~~provided ~~and~~by ~~the~~New ~~bankruptcy court subsequently authorized Old~~ NTL’s ~~rejection~~and ~~of the agreements. On November~~its subsidiaries 8,under ~~2002, B2 and~~ the ~~other~~agreement ~~principal~~based ~~shareholders~~on ~~filed proofs of claim with~~ the ~~bankruptcy~~amount ~~court asserting their right to recover: (1) approximately $20 million from Old NTL in respect~~ of ~~the~~time ~~unpaid~~spent ~~funding~~by ~~request; (2) unspecified damages for Old NTL’s failure to perform under~~ the relevant ~~agreements;~~personnel ~~and (3) unspecified costs and expenses incurred~~ in ~~the~~carrying ~~exercise~~out ofsuch ~~their remedies under the agreements, and reserved their other rights to avail themselves of any remedies under the agreements~~work.

On ~~April 30~~September 28, ~~2003~~2001, ~~Parc Holdings, together with its subsidiaries~~ NTL ~~Sweden~~Communications ~~SPV Inc~~Corp. ~~and~~loaned ~~Nogenta~~Old ~~Swedish~~NTL ~~Acquisition Holding B~~$150.~~V.,~~0 million in ~~entered~~cash ~~into an agreement with B2~~ and ~~the~~received ~~other~~15.0% ~~principal~~Promissory ~~shareholders~~Notes ofdue ~~B2 relating to~~September 30, ~~among~~2004. ~~other things, the transfer of the Company’s securities~~Interest was inpayable ~~B2.~~monthly ~~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 orat ~~certain~~a ~~securities~~rate of a15.0% B2per ~~affiliate~~annum ~~and~~beginning ~~mutual~~on ~~releases among the parties relating to a dispute stemming~~October ~~from an April 15~~31, ~~2002 funding request for approximately $20 million~~2001. InUpon ~~connection~~emergence ~~with~~from ~~the~~Chapter 11 ~~mutual~~reorganization ~~releases, the agreement provides that B2~~ and ~~the other principal shareholders will withdraw, or otherwise assist Parc Holdings~~ in ~~obtaining~~accordance ~~bankruptcy court denial of, the proofs of~~with ~~claim filed by B2 and~~ the ~~other~~Plan, ~~principal~~these ~~shareholders~~notes inwere ~~the bankruptcy court~~cancelled. ~~The closing of this transaction took place in May 2003.~~

~~Cablecom~~On April 5, 2002, following receipt of the proceeds from the sale of NTL Australia, Parc Holdings 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.

~~Cablecom~~Pursuant isto the ~~principal~~DIP ~~borrower~~facility, ~~under~~all anfunding ~~amended~~needs ~~and~~of ~~restated~~the ~~credit~~debtors ~~agreement~~were ~~dated~~funded through asthe proceeds of ~~April~~the 30DIP facility, ~~2002~~in ~~and~~accordance ~~effective~~with asa ofbudget ~~May~~and 2,the terms ~~2002.~~of ~~Under~~ the ~~credit~~DIP facility agreement,. ~~Cablecom~~Communications ~~and~~Cable ~~one~~Funding ofCorp. ~~its~~had entered ~~subsidiaries~~into ~~are~~intercompany ~~indebted~~note inagreements anwith ~~amount~~Old ofNTL ~~approximately~~and ~~CHF~~Parc ~~3,792~~Holdings ~~million (which~~to evidence ~~includes~~such ~~recent accrued interest payments)~~transactions. ~~Although~~The ~~the~~notes ~~credit~~earned ~~facility~~interest ~~was~~on ~~originally~~the ~~scheduled~~unpaid toprincipal amount ~~mature~~for onthree ~~April~~months ~~30,~~from ~~2003~~July 15, ~~upon~~2002 at the ~~request~~rate of ~~Cablecom,~~11% ~~the~~per ~~maturity~~annum. ~~date~~With respect ~~has~~to ~~been~~each ~~extended~~successive tothree ~~October~~month ~~31,~~period ~~2003.~~following Inthat ~~addition~~date, ~~Cablecom~~the ~~has~~rate ~~been~~per annum ~~notified~~increased incrementally by ~~the~~1% ~~lenders~~over ~~that~~the itimmediately ispreceding inthree month period ~~default~~but ~~under~~will ~~the~~not ~~credit~~exceed ~~agreement~~18% per annum for any three month period. ~~Accordingly,~~Upon emergence ~~the~~from ~~lenders~~Chapter 11 ~~could~~reorganization ~~seek~~and toin ~~accelerate~~accordance with the ~~maturity~~Plan, ofsuch debt in the ~~credit~~amount ~~facility~~of at$69.3 million ~~any~~was ~~time~~repaid.

~~Cablecom~~Certain ~~does~~former ~~not~~officers ~~have~~and ~~the~~directors ~~resources~~of toOld ~~repay~~NTL ~~the~~were ~~bank~~also ~~debt~~officers ~~when~~and directors itof ~~comes~~ATX ~~due~~Communications, ~~whether~~Inc. on(“ATX”) ~~the~~(formerly ~~extended~~known ~~maturity~~as ~~date~~CoreComm Holdco, orInc.). ~~upon~~On ~~the~~April 12, ~~acceleration~~2001, ~~thereof~~Old NTL purchased $15.0 million ~~Further~~of an unsecured convertible note from ATX and received warrants to purchase 770,000 shares asof ~~security~~ATX ~~for~~common ~~its~~stock ~~guaranty~~at an exercise price of ~~Cablecom’s~~$0.01 ~~obligations~~per ~~under~~share that expire in April 2011. In addition, concurrently with the ~~credit~~note ~~agreement~~purchase and without additional compensation, Old NTL ~~Cablecom~~entered ~~Holding~~into ~~GmbH,~~a network and software agreement with ATX. Under the ~~parent~~agreement, ATX will provide U.S. network for Internet traffic ~~entity~~from ofOld ~~Cablecom~~NTL’s UK customers for three years, ~~has~~as ~~pledged~~well as a royalty free license to ~~the~~use ~~lenders~~certain ~~all~~billing ofand provisioning software and know-how. Interest on the ~~shares~~notes ofis ~~Cablecom~~at 10.75% per ~~Accordingly~~annum, ~~upon~~payable semiannually beginning on October 15, 2001. The interest is payable in kind by the ~~maturity~~issuance of additional notes in such principal amount equal to the ~~credit~~interest payment that is then due. The

3029

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~~facility,~~notes ~~whether~~are ~~upon~~convertible ~~acceleration~~into ATX orcommon ~~otherwise,~~stock ~~the~~prior ~~lenders~~to ~~could~~maturity ~~seek~~at toa ~~exercise~~conversion ~~their~~price ~~rights~~of ~~under~~$1.00 ~~the~~per ~~pledge~~share, subject to adjustment. InAdditional ~~such~~notes issued for interest will have an initial ~~event,~~conversion ~~although~~price equal to 120% of the ~~Company~~weighted ~~would~~average ~~not~~closing beprice ~~liable~~of ATX common stock for ~~any~~a ofspecified ~~Cablecom’s~~period. ~~obligations,~~Old itNTL ~~would~~and beATX ~~deprived~~agreed ofto ~~all~~certain modifications ofto ~~its~~the ~~ownership~~conversion ~~interest~~feature in ~~Cablecom~~connection with ATX’s recapitalization in December 2001.

InPremium ~~addition,~~TV ~~Cablecom~~has ~~and~~entered ~~certain~~into ofa ~~its~~number ~~subsidiaries~~of ~~are~~agreements ~~“overindebted” under Swiss law. If Cablecom is unsuccessful in consummating a transaction~~ with ~~its~~New ~~lenders to resolve that “overindebtedness” issue in the near future~~NTL, ~~the~~pursuant ~~board of directors of Cablecom may be required~~ to ~~file for~~ which ~~insolvency~~Premium ~~proceedings~~TV ~~under~~receives ~~Swiss~~certain ~~law.~~operational ~~Further,~~services oncovering ~~April 9~~premises, ~~2003~~ connectivity, ~~in accordance with Swiss law~~hosting, ~~the~~technology ~~board of directors of Cablecom received a letter from its auditors, Ernst & Young AG, notifying the board of Cablecom that Cablecom~~ and ~~some~~other ofcorporate ~~its~~volume ~~subsidiaries are “overindebted”~~purchasing benefits. ~~and,~~Premium ifTV ~~there~~has 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~~co-marketing ~~court~~agreement ~~and~~linked ~~deposit~~with ~~the~~New ~~balance sheets for~~NTL’s broadband ~~Cablecom~~product and ~~its~~an ~~subsidiaries~~agreement ~~immediately,~~with ~~thereby~~New ~~commencing~~NTL ~~insolvency~~where ~~proceedings.~~New IfNTL ~~Cablecom files for insolvency proceedings, it~~ is ~~unlikely~~able ~~that~~to exploit ~~the~~Premium ~~Company~~TV’s ~~will~~pay ~~retain~~per ~~any~~view ~~interest in Cablecom~~rights.

In ~~order~~1999, toNTL ~~seek~~Broadcast toestablished ~~address~~two ~~the foregoing issues~~subsidiaries, ~~Cablecom~~located ~~is currently~~ in ~~negotiations~~Thailand ~~with~~and Malaysia. ~~its~~Following ~~lenders~~consummation ~~regarding an overall financial restructuring~~ of ~~Cablecom.~~the ~~If consummated~~Plan, ~~such~~the ~~restructuring~~Company ismaintained ~~expected~~ownership of tothe ~~include~~operations ~~a reduction~~ in ~~the~~Malaysia ~~amount~~and ofThailand ~~debt~~through ~~outstanding~~two companies, anNTL ~~extension of~~Broadcast Sdn ~~maturity date of such debt~~ and ~~control~~NTL ofBroadcast ~~Cablecom~~(Thailand) ~~being~~Ltd. ~~assumed~~(together, by“NTL ~~the lenders~~Asia”). The ~~proposed~~two subsidiaries ~~restructuring~~are ismanaged ~~subject~~as toone ~~various~~business. ~~closing conditions~~Separately, ~~including~~New ~~the~~NTL ~~negotiation,~~maintains ~~completion~~a branch ~~and~~office ~~execution~~in ~~of definitive documentation~~Singapore. ~~Cablecom~~The Company’s ~~lenders~~subsidiaries ~~have~~rely ~~also agreed to a moratorium~~ on ~~the~~New ~~payment of interest and commitment commission accruing between May 30, 2003 and the date on which Cablecom~~NTL’s Singapore ~~credit~~office ~~agreement~~for isadministration ~~restated~~and asother ~~part~~support ofservices. ~~the~~The ~~financial~~Company ~~restructuring (when a portion of the accrued amounts will be added to the principal amount of the facility). If~~has entered ~~Cablecom~~into ~~is subject to~~ an ~~insolvency proceeding before its credit~~ agreement ~~is restated, Cablecom’s lenders have agreed~~ to ~~waive~~jointly ~~such~~NTL ~~interest~~Asia ~~and~~with ~~commitment~~New ~~commission~~NTL.

~~In the event that the proposed restructuring is completed, the Company expects that its remaining interest in Cablecom will be acquired for an amount not in excess of $15 million~~16. IfCommitments ~~such~~and ~~proposed~~Contingent ~~restructuring is unsuccessful, the Company expects to be deprived of all its ownership~~Liabilities 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 or distributions 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.~~

~~Owl~~The ~~Creek~~Company is involved in certain disputes and litigation arising in the ordinary course of its business. With the possible exception of the specific items discussed below, none of the matters are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

OnMorgan May 1, 2003, Owl Creek Asset Management, L.P., one of Old NTL’s creditors, filed an amended complaint against CRT Capital Group LLC, New NTL and the Company in U.S. Bankruptcy Court for the Southern District of New York. The amended complaint concerns certainStanley “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~~

31In 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, Parc Holdings 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. Pursuant to a letter agreement, dated October 27, 2003, Morgan Stanley Senior Funding Inc. agreed not to take any further action or make any further claims with respect to all proofs of claim filed by Morgan Stanley Senior Funding Inc. and its affiliates in the Company’s Chapter 11 proceeding or the subject matter thereof.

~~Back~~B2 toBredband ~~Index~~AB (publ)

~~share~~On ~~purchase~~April 15, ~~price~~2002, ~~for~~a ~~such~~funding ~~shares~~request byfor ~~400%.~~approximately ~~The~~$20 million ~~order~~was ~~provided~~received by ~~that~~Old ~~buyers~~NTL inunder ~~such~~the ~~trades~~terms ~~were~~of ~~required to accept such a settlement, but~~ the ~~order~~investment ~~was~~agreement ~~dissolved~~relating ~~on February 5, 2003. In addition~~ to ~~its~~Old ~~claims~~NTL’s investment ~~against~~in ~~CRT,~~B2. ~~Owl~~Old ~~Creek~~NTL ~~has~~informed ~~asserted~~B2 ~~claims~~and ~~against~~the ~~New~~other ~~NTL~~principal ~~and~~investors ~~the~~that it ~~Company~~was ~~for~~not ~~breach~~in ofa ~~fiduciary~~position ~~duty,~~to ~~gross~~comply ~~negligence,~~with ~~breach~~the ofrequest ~~contract,~~for ~~promissory~~funding. ~~estoppel,~~The ~~contribution~~B2 investment ~~and~~agreement ~~indemnification,~~provides ~~alleging~~ that if Old NTL’s ~~creditors~~fails ~~should~~to ~~have~~provide ~~been~~such ~~better~~funding, ~~informed~~it may ofbe ~~the~~sued ~~changes~~for tonon-payment ~~New~~and ~~NTL’s~~arguably ~~common~~could ~~stock~~lose certain rights under the ~~plan. Owl Creek has~~B2 shareholders’ ~~subsequently~~agreement ~~voluntarily~~including ~~dismissed~~ its ~~complaint~~interest ~~against the Company without prejudice to recommencement~~ in ~~state court where related litigation against other parties is pending~~B2.

~~Newcastle~~On ~~United~~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

Premium TV is engaged in litigation relating to a dispute with one of its joint venture partners, Newcastle United plc. On March 14, 2003, Newcastle United served notice to terminate its joint venture agreement with Premium TV on the grounds of Premium TV’s alleged insolvency.30 Premium TV is vigorously defending its position. On April 28, 2003, Premium TV itself issued court proceedings applying for a declaration that it was solvent. If Premium TV is unsuccessful in its litigation, Newcastle United would have the right to purchase Premium TV’s 50% interest ~~in the joint venture at 50% of the appraised market value of the joint venture.~~

GermanTable Channelof ProvidersContents

Oncosts ~~July~~and ~~29,~~expenses ~~2003,~~incurred ~~Cablecom~~in ~~received~~the aexercise ~~letter~~ of their ~~counsel~~remedies ~~acting~~under ~~for~~the ~~German channel providers SAT 1~~agreements, ~~ProSieben~~ and ~~Kabel~~reserved 1their ~~requesting~~other ~~payment~~rights ~~of a total of CHF 13,324,827. The channel providers have threatened~~ to ~~institute proceedings against Cablecom if Cablecom refused to pay~~avail themselves ~~the~~of ~~amount~~any asremedies ~~requested,~~under ~~which equals~~ the ~~total amount that the respective channel providers have paid to Cablecom for the distribution of a Swiss advertising spilt over Cablecom’s network since 1996~~agreements.

~~The~~On ~~channel~~April 30, ~~providers~~2003, ~~claim~~Parc ~~that~~Holdings, together with its subsidiaries NTL Sweden SPV Inc. and Nogenta Swedish Acquisition Holding B.V., entered into an agreement with B2 and the ~~current~~other ~~contractual~~principal ~~compensation~~shareholders of B2 relating to, inamong ~~form~~other things, the transfer of athe ~~percentage~~Company’s ~~fee~~securities onin B2. Under the ~~advertising~~agreement, the ~~revenues~~NTL Europe parties have agreed to transfer their interest in B2 to certain other shareholders of B2 in exchange for approximately $375,000 ~~would~~in becash ~~abusively~~or certain ~~high~~securities of a B2 affiliate and ~~therefore~~mutual ~~constitute~~releases among the parties relating to a ~~breach~~dispute ofstemming ~~Swiss~~from ~~competition~~an ~~law~~April 15, 2002 funding request for approximately $20 million. ~~They~~In ~~refer~~connection towith the ~~recent~~mutual ~~decision~~releases, bythe agreement provides that B2 and the ~~Swiss~~other ~~Competition~~principal ~~Commission~~shareholders will withdraw, or ~~ordering~~otherwise ~~preliminary~~assist ~~measures~~Parc Holdings in ~~proceedings~~obtaining ~~between~~bankruptcy ~~Teleclub~~court ~~and~~denial ~~Cablecom~~of, ~~and~~the proofs ~~holding~~of ~~that~~claim ~~Cablecom~~filed ~~has~~by aB2 ~~dominant~~and ~~position~~the onother ~~the~~principal ~~market~~shareholders ~~for~~in the bankruptcy ~~distribution~~court. The closing of TVthis ~~signals~~transaction totook ~~Swiss~~place ~~customers~~in May 2003.

~~Following external legal advice and in order to protect long term interests of~~ Cablecom~~, Cablecom has decided to refuse to repay any amounts received. It can therefore be expected that German channel providers will shortly initiate legal proceedings. Same or similar action has been~~ ~~announced by a second group of German channel providers has been obtained yet.~~

17Cablecom was the principal borrower under an amended and restated credit agreement dated as of April 30, 2002 and effective as of May 2, 2002. ~~Subsequent~~Under the ~~Events~~credit agreement, prior to the November 12, 2003 restructuring, Cablecom and one of its subsidiaries were indebted in an amount of approximately CHF 3,792 million (which included recent accrued interest payments). The credit facility was originally scheduled to mature on April 30, 2003 and had been extended to November 18, 2003. In addition, prior to the November 12, 2003 restructuring, Cablecom had been notified by the lenders that it was in default under the credit agreement. Accordingly, but for the recent restructuring, the lenders could have sought to accelerate the maturity of the credit facility at any time.

OnPrior ~~September~~to 11the November 12, 2003 restructuring, Cablecom did not have the resources ~~Company’s~~to ~~Board~~repay ofthe ~~Directors~~bank ~~approved~~debt awhen ~~semi-annual~~it ~~dividend~~would ofhave ~~$2.50~~become ~~per~~due, ~~share~~whether on the extended ~~Preferred~~maturity ~~Stock.~~date ~~The~~or ~~Company~~upon ~~has~~the ~~approximately~~acceleration 6thereof. Further,~~864,000~~ ~~shares~~as ofsecurity for ~~preferred~~its ~~stock~~guaranty ~~outstanding,~~of soCablecom’s ~~the~~obligations ~~aggregate~~under ~~dividend~~the ~~will~~credit beagreement, ~~approximately~~NTL Cablecom ~~$17~~Holding GmbH,~~160,000.~~ ~~The~~ the ~~record~~parent ~~date~~entity of ~~the~~Cablecom, ~~dividend~~had onpledged to the lenders ~~preferred~~all ~~stock~~of ~~will~~the beshares ~~September~~of 30Cablecom. Accordingly, ~~2003~~upon ~~and~~the maturity of the credit ~~payment~~facility, ~~date~~whether ~~will~~upon beacceleration ~~October~~or 15otherwise, ~~2003.~~the ~~However,~~lenders ~~there~~could ishave sought noto ~~requirement~~exercise their rights under ~~our~~the ~~charter~~pledge. toIn ~~pay~~such ~~any~~an ~~future~~event, ~~dividends~~although the onCompany ~~our~~would ~~Preferred~~not ~~Stock~~be ~~and~~liable ~~there~~for isany noof ~~assurance~~Cablecom’s ~~that~~obligations, weit ~~will~~would have ~~pay~~been ~~any~~deprived ~~such~~of ~~future~~ all ~~dividends~~of its ownership interest in Cablecom.

32In addition, prior to the consummation of the November 12, 2003 restructuring, Cablecom and certain of its subsidiaries were “overindebted” under Swiss law. If Cablecom had been unsuccessful in consummating a transaction with its lenders to resolve that “overindebtedness” issue, the board of directors of Cablecom could have been 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 were “overindebted” and, if there had been 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 have been required to notify a Swiss court and deposit the balance sheets for Cablecom and its subsidiaries immediately, thereby commencing insolvency proceedings.

~~Back~~In order to ~~Index~~seek to address the foregoing issues, during the past year, Cablecom and its lenders had been involved in ongoing discussions regarding a complete financial restructuring of Cablecom which would have, among other things, reduced the amount of bank debt outstanding, extended the maturity date thereof and resolved the Swiss overindebtedness issue.

~~Item~~A 2restructuring of Cablecom’s debt and equity was completed on November 12, 2003. As a result, effective November 19, 2003, the Company will no longer have any remaining interest in Cablecom and

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~31

TheTable 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 1. This discussion contains forward-looking statements. Please see “Risk Factors” contained in this Form 10-Q.Contents

~~Overview~~the Company expects to receive a payment of $15 million. (See Note 19 – “Cablecom Restructuring.”) Accordingly, from and after November 12, 2003, the results of Cablecom will no longer be reported as part of the Company’s consolidated results of operations and Cablecom will be treated as a discontinued operation beginning in the fourth quarter of 2003.

WeOwl ~~currently have the following indirect wholly-owned operating subsidiaries:~~Creek

•On May 1, 2003, Owl Creek Asset Management, L.P., one of Old NTL’s ~~Premium~~creditors, filed TVan ~~Holdings~~amended ~~Corp~~complaint against CRT Capital Group LLC, New NTL and the Company in U.S. Bankruptcy Court for the Southern District of New York. The amended complaint concerns certain “when-issued” trades of New NTL’s common stock made by Owl Creek with CRT prior to a subsequent modification of Old NTL’s plan of reorganization. Under the modified plan, ~~our~~Old ~~sports~~NTL’s TVcreditors were ~~content~~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 ~~internet~~increasing ~~business~~the per share purchase price for such shares by 400%. The order provided that buyers in such trades were required to accept such a settlement, but the order was dissolved on February 5, 2003. In addition to its claims against CRT, Owl Creek has asserted claims against New NTL and the Company for breach of fiduciary duty, gross negligence, breach of contract, promissory estoppel, contribution and indemnification, alleging that Old NTL’s creditors should have been better informed of the changes to New NTL’s common stock under the plan. Owl Creek has subsequently voluntarily dismissed its complaint against the Company without prejudice to recommencement in state court where related litigation against other parties is pending and the Company entered into a tolling agreement with the plaintiffs to toll the statute of limitations for recommencement of the action.

•Newcastle ~~Cablecom GmbH, our cable business in Switzerland, ownership of most of which we are unlikely to retain (See “Risk Factors – Risk Factors Relating to Cablecom”)~~United

•Premium ~~NTL~~TV ~~Lanbase~~is engaged in litigation relating to a dispute with one of its joint venture partners, SLNewcastle United plc. On March 14, ~~our~~2003, ~~LAN/WAN~~Newcastle ~~installation~~United served ~~business~~notice ~~located~~to terminate its joint venture agreement with Premium TV on the grounds of Premium TV’s alleged insolvency. Premium TV is vigorously defending its position. On April 28, 2003, Premium TV itself issued court proceedings applying for a declaration that it was solvent. If Premium TV is unsuccessful in ~~Madrid~~its litigation, ~~Spain~~Newcastle United would have the right to purchase Premium TV’s 50% interest in the joint venture at 50% of the appraised market value of the joint venture.

•On ~~NTL~~October 21, ~~Broadcast~~2003, ~~(Thailand)~~Premium ~~Ltd.~~TV signed a settlement agreement with Newcastle United plc and ~~NTL~~their ~~Broadcast~~joint ~~Sdn~~venture ~~Ltd~~company, nufc.co.uk Limited. Under the terms of the settlement agreement, ~~our~~Newcastle ~~Asian~~United ~~broadcast~~withdrew ~~infrastructure~~the notice it had served on Premium TV on March 14, ~~services~~2003 requiring Premium TV to transfer its shares in the joint venture to Newcastle United on grounds that Premium TV was insolvent and ~~consulting~~Newcastle ~~business~~United accepted that Premium TV was solvent as at the date on which the notice was served. For its part, Premium TV agreed to discontinue its application for a court declaration that it was solvent. As a result, the joint venture remains in place.

WeIn ~~currently~~addition, ~~have~~the ~~minority~~parties ~~interests~~agreed to settle various other commercial and legal matters that had been under dispute between them in relation to the ~~following~~joint venture, ~~operating~~and ~~entities:~~Premium TV received a net cash payment by way (inter alia) of settlement for past management services provided to the joint venture. The parties also agreed to vary the terms of their joint venture arrangements such that (inter alia) Newcastle United’s existing option to purchase Premium TV’s shares in the joint venture was amended.

~~• Two Way TV Limited, an interactive television service provider~~32

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

~~Our~~German ~~most~~Channel 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 are exploring the strategic and financial alternatives available to us. SomeProviders 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. In this regard, our board established a special committee with Michael Cochran, a member of the board, as its sole, independent member to review, consider, investigate, evaluate, negotiate and recommend action to the entire board with respect to one or more possible going private ~~transactions.~~

WeOn ~~may~~July 29, ~~not~~2003, ~~receive~~Cablecom ~~any~~received ~~proceeds~~a ~~from~~letter ~~any~~ of ~~these~~counsel ~~transactions~~acting ~~after~~for ~~the~~German channel ~~payment~~providers ofSAT ~~outstanding~~1, ~~debt~~ProSieben ~~that some of these companies may owe~~ and ~~any~~Kabel ~~fees~~1 ~~and~~requesting ~~expenses~~payment ~~incurred~~of ina ~~connection~~total ~~with~~of CHF ~~these transactions. See~~13, ~~in particular~~324,827. ~~“Risk~~The ~~Factors~~channel –providers ~~Risk~~have ~~Factors~~threatened ~~Relating~~ to institute proceedings against Cablecom.” Toif ~~the~~Cablecom ~~extent~~refused weto ~~receive~~pay ~~cash proceeds from any asset sale we or our subsidiaries complete,~~ the ~~10%~~amount ~~Fixed~~as ~~Coupon Redeemable Preferred Stock~~requested, ~~Series~~which equals A,the ~~par~~total ~~value~~amount ~~$0.01~~that ~~per share (with a $50.00 liquidation preference per share) (~~the ~~“Preferred~~respective ~~Stock”)~~channel ~~will~~providers behave ~~entitled~~paid to Cablecom ~~mandatory~~for ~~redemption in a like amount, subject to some limited exceptions set forth in our charter, until all shares of~~ the ~~Preferred~~distribution ~~Stock (having an aggregate~~ of ~~$343~~a ~~million~~Swiss inadvertising ~~liquidation~~spilt ~~preference~~over ~~plus an additional approximate $17.2 million of accrued and unpaid dividends as of~~Cablecom’s network ~~June~~since ~~30, 2003) have been redeemed~~1996. ~~Given the liquidation preference on the Preferred Stock and~~

33The channel providers claim that the current contractual compensation, in form of a percentage fee on the advertising revenues, would be abusively high and therefore constitute a breach of Swiss competition law. They refer to the recent decision by the Swiss Competition Commission ordering preliminary measures in proceedings between Teleclub and Cablecom and holding that Cablecom has a dominant position on the market for the distribution of TV signals to Swiss customers.

~~Back~~Following external legal advice and in order to ~~Index~~protect long term interests of Cablecom, Cablecom has decided to refuse to repay any amounts received. It can therefore be expected that German channel providers will shortly initiate legal proceedings. Same or similar action has been announced by a second group of German channel providers has been obtained yet.

~~the~~17. ~~anticipated~~Dividend ~~value~~on ofPreferred ~~our assets, it is unlikely that any such liquidation will generate any proceeds or distributions to the holders of our common stock.~~Stock

~~Separation~~On ~~from~~October 15, ~~NTL~~2003, ~~Incorporated;~~the ~~Fresh~~Company ~~Start~~paid ~~Accounting~~a semi-annual dividend of $2.50 per share on the Preferred Stock. The Company has approximately 6,864,000 shares of preferred stock outstanding, so the aggregate dividend was approximately $17,160,000. Although the Company intends to pay additional dividends on the Preferred Stock, there is no requirement under our charter to pay any future dividends on our Preferred Stock and there is no assurance that we will pay any such future dividends.

~~On January 10, 2003, the company then known as NTL Incorporated (“Old NTL”) emerged from bankruptcy protection and consummated its reorganization plan~~18. ~~Through~~Reverse ~~this~~Stock ~~reorganization plan, Old NTL was separated into two independent companies, effective January 10,~~Split 2003. One company, which assumed the name “NTL Incorporated,” holds substantially all of Old NTL’s assets in the United Kingdom and Ireland (“New NTL”). 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~~On September 30, 2003, the ~~separation~~Company’s board of ~~Old~~directors ~~NTL~~approved ~~into~~a ~~two entities~~1-for-50,000 reverse ~~the~~stock ~~majority~~split of the ~~significant~~Common ~~assets~~Stock ~~and~~that ~~holdings~~would ofhave ~~Old~~the ~~NTL~~effect ~~were~~of terminating ~~retained~~the byCompany’s ~~New~~obligations ~~NTL.~~to ~~Generally,~~file ~~other~~annual ~~than~~and ~~Cablecom~~periodic ~~(which~~reports ~~itself~~and make isother ~~being~~filings ~~restructured,~~with ~~See~~the ~~“Risk~~SEC. ~~Factors~~In –connection ~~Risk~~with ~~Factors~~the ~~Relating~~reverse tostock ~~Cablecom”)~~split, ~~our~~ stockholders ~~assets~~of ~~are~~record ~~not~~holding ~~material~~less ~~compared~~than toone ~~those~~share of ~~New~~new ~~NTL.~~common Asstock ~~discussed below, in~~ after the ~~near~~reverse ~~future,~~stock wesplit ~~expect~~would ~~our~~receive ~~interest~~a incash ~~Cablecom~~payment equal to be$0.01 ~~reduced~~for ~~to,~~each share atof ~~most,~~Common aStock ~~small~~they ~~minority~~currently ~~position~~hold. ~~Further,~~The ascompletion ~~discussed~~of ~~above,~~the ~~our~~transaction is ~~board~~subject ofto ~~directors~~stockholder ~~and~~approval. ~~management~~The ~~are~~Company ~~exploring~~filed ~~the~~a ~~strategic~~proxy ~~and~~statement with the ~~financial~~SEC ~~alternatives~~on ~~available~~October 8, ~~to us~~2003. ~~Accordingly,~~The ~~the~~Company ~~historical~~incurs ~~financial~~substantial ~~statements~~costs ofassociated with ~~Old~~being ~~NTL~~a ~~for~~public ~~periods prior to January 1~~company, ~~2003,~~such ~~are~~as ~~not~~accounting ~~particularly~~and ~~reflective~~legal offees ~~our current~~ and ~~anticipated~~D&O insurance ~~future~~premiums, ~~business~~which ~~and~~would ~~should~~decrease ~~not~~significantly beafter ~~relied~~the ~~upon~~Company terminates asthe ~~indicative~~registration of ~~our~~the ~~future~~Common ~~performance~~Stock and Preferred Stock.

~~Cablecom has approximately CHF 3,792 million in bank debt (which includes recently accrued interest payments) that matured on April 30, 2003~~19. Cablecom’s ~~lenders have extended such due date until October 31, 2003. However, Cablecom has insufficient resources to~~Restructuring satisfy such obligation. In addition, Cablecom and certain 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 and, on June 19, 2003, Cablecom’s board of directors had been advised that 100% of its lenders and other holders of economic interests in Cablecom’s bank debt have agreed upon the principal terms and parameters for the restructuring of that debt.

~~The~~On ~~principal~~November 12, ~~terms~~2003, ~~for~~Cablecom completed a restructuring of its debt and equity which, among other things, reduced the ~~financial~~amount of bank debt outstanding, extended the maturity date thereof and resolved the Swiss overindebtedness issue. As a result of that restructuring, ~~are:~~effective as of the close of business on November 19, 2003, the Company expects to have no further ownership interest in Cablecom. Also, in connection with the restructuring, on November 19, 2003, the Company expects to receive a payment of $15 million.

~~• The outstanding principal amount of the debt would be reduced from approximately CHF 3.8 billion to approximately CHF 1.7 billion.~~33

•Table The facility would be split into two tranches, one with a final maturity date of December 31, 2009 and one with a final maturity date of June 30, 2010.Contents

~~• Cablecom’s lenders would acquire control of substantially all of Cablecom’s share capital, with our remaining interest being acquired by certain members of the new shareholder group~~Item 2.

•MANAGEMENT’S AtDISCUSSION ~~the~~AND ~~time~~ANALYSIS ofOF ~~the~~FINANCIAL ~~consummation~~CONDITION ofAND RESULTS ~~the~~OF ~~restructuring, the additional equity capital would be raised through a rights offering to the new shareholder group.~~OPERATIONS

The ~~proposed~~following ~~restructuring~~discussion ~~is subject to various closing conditions, including the negotiation, completion and execution~~ of ~~definitive~~our ~~documentation.~~financial ~~Cablecom’s~~condition ~~lenders have also agreed to a moratorium on the payment of interest~~ and ~~commitment~~results ~~commission accruing~~of operations ~~between~~should ~~May~~be ~~30,~~read ~~2003~~in ~~and~~conjunction ~~the~~with ~~date~~our ~~on which Cablecom’s credit agreement is restated as part of the~~ financial ~~restructuring~~statements ~~(when~~and ~~a portion of~~ the related ~~accrued~~notes ~~amounts~~in ~~will be added to the principal amount of the facility)~~Item 1. IfThis ~~Cablecom~~discussion iscontains ~~subject~~forward-looking ~~to an insolvency proceeding before its credit~~statements. Please ~~agreement~~see is“Risk ~~restated,~~Factors” ~~Cablecom’s~~contained ~~lenders have agreed to waive such interest and commitment commission. In the event that the proposed restructuring is completed, we expect that our remaining interest~~ in ~~Cablecom~~this ~~will~~Form ~~be acquired for an amount not in excess of $15 million~~10-Q. ~~If such~~ ~~proposed restructuring is unsuccessful, we expect to be deprived of all our~~

34Overview

~~Back~~ We tocurrently ~~Index~~have the following indirect wholly-owned operating subsidiaries:

~~ownership~~• 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 or distributions 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~~Premium ~~group,~~TV ~~other~~Holdings ~~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~~Corp. ~~As a result~~, our ~~financial~~sports ~~statements~~TV ~~which~~content ~~include the assets~~ and ~~results~~internet ~~of Cablecom may not necessarily reflect our results of operations, financial position and cash flows in the future.~~business

~~Old~~• NTL ~~operated its business as a debtor-in-possession subject to the jurisdiction of the Bankruptcy Court during the period from May 8~~Lanbase, ~~2002 until January 10~~SL, 2003. Accordingly, Old NTL’s consolidated financial statements for periods prior to its emergence from Chapter 11 reorganization were prepared in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (“SOP 90-7”). In addition, we adopted fresh-start reporting upon our ~~emergence~~LAN/WAN ~~from~~installation ~~Chapter~~business 11located ~~reorganization~~ in ~~accordance with SOP 90-7. For financial reporting purposes~~Madrid, the effects of the consummation of the bankruptcy plan as well as adjustments for fresh-start reporting have been recorded in our unaudited condensed consolidated financial statements as of January 1, 2003.Spain

~~Pursuant~~• toNTL ~~fresh-start~~Broadcast ~~reporting,~~(Thailand) aLtd. ~~new entity was deemed created for financial reporting purposes~~ and ~~the~~NTL ~~carrying~~Broadcast ~~value~~Sdn ~~of our assets and liabilities was adjusted~~Ltd., ~~The carrying value of~~ our ~~assets~~Asian ~~was~~broadcast ~~adjusted~~infrastructure, toservices ~~their~~and ~~reorganization~~consulting ~~value~~business ~~that~~We iscurrently ~~equivalent~~have tominority ~~their~~interests ~~estimated~~ in ~~fair~~the ~~value.~~following ~~The~~operating ~~carrying value of our liabilities was adjusted to their present value.~~entities:

~~Application~~• ofTwo ~~Critical~~Way ~~Accounting~~TV ~~Policies~~Limited, ~~and~~an ~~Estimates~~interactive television service provider

~~Our~~• ~~consolidated~~ITV ~~financial~~News ~~statements~~Channel ~~and related financial information are based on the application of generally accepted accounting principles in the United States. GAAP requires the use of estimates~~Limited, 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~~24-hour ~~significant~~news ~~impact~~channel onlocated ~~our~~in ~~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 natureU.K.

• Our Wemost ~~maintain~~significant ~~allowances~~holdings ~~for~~are ~~doubtful~~currently ~~accounts~~being restructured and ~~notes~~we ~~receivable~~will be ~~for~~reviewing ~~estimated~~all ~~losses~~of ~~resulting~~our ~~from~~holdings ~~the~~to ~~potential~~determine ~~inability~~the ofmost ~~our~~appropriate ~~customers~~course orof action. ~~the~~In ~~other~~that ~~parties~~regard, toon ~~make~~November 12, ~~payments.~~2003, ~~These~~Cablecom ~~allowance~~GmbH, ~~are~~our ~~estimated~~former ~~based~~cable business onin ~~the~~Switzerland, ~~current~~completed ~~aging~~a restructuring of ~~receivables,~~its ~~prior~~debt ~~collection experience~~ and ~~future~~equity. ~~expectations~~As a result of ~~conditions~~ that ~~might~~restructuring, ~~impact~~effective ~~the~~as ~~collectibility.~~of If the ~~financial~~close ~~condition~~ of ~~our~~business ~~customers~~on November 19, or2003, ~~the~~we ~~other~~expect ~~parties~~to ~~were~~have tono ~~deteriorate~~further ~~resulting~~ownership interest in anCablecom. Also, ~~impairment~~ in ~~their~~connection ~~ability~~with tothe ~~make~~restructuring, ~~payments~~on November 19, ~~additions~~2003, towe ~~the~~expect ~~allowances~~to receive ~~may~~a bepayment ~~required~~of $15 million.

• Our ~~determination~~board of ~~the~~directors ~~treatment~~and ofmanagement ~~contingent~~have ~~liabilities~~been inexploring the strategic and financial ~~statements~~alternatives isavailable ~~based~~to onus. aIn ~~view~~that ofregard, ~~the~~our ~~expected~~board ~~outcome~~approved a of1-for-50,000 ~~the~~reverse ~~applicable~~stock ~~contingency.~~split Weof ~~consult~~our ~~legal~~common ~~counsel~~stock onand ~~matters~~payment ~~related~~of ~~to litigation~~$.01 Weper share, ~~also~~on ~~consult~~a ~~with~~pre-split ~~experts~~stock ~~both~~basis, ~~within~~for ~~and~~fractional ~~outside~~shares. ~~our~~If ~~company~~approved ~~with~~by ~~respect~~a majority toof ~~other~~our ~~matters~~stockholders, ~~that~~the ~~arise~~consummation inof the ~~ordinary~~reverse ~~course~~stock ofsplit ~~business.~~is expected ~~Examples~~to ofreduce ~~such~~the ~~matters~~number ~~that~~of ~~are~~holders ~~based~~of onour ~~assumptions,~~common ~~judgments~~stock ~~and~~to ~~estimates~~below ~~are~~300 thereby ~~the~~permitting ~~amount~~us to beterminate ~~paid~~our toregistration ~~terminate~~under ~~certain~~the ~~agreements~~Securities ~~and~~Act. The ~~the~~number ~~amounts~~of toholders beof ~~paid~~Preferred toStock ~~settle~~is ~~certain~~already ~~other~~below ~~liabilities~~300. AAccordingly, after ~~liability~~the iseffective ~~accrued~~date ifof the ~~likelihood~~reverse ofstock ansplit, ~~adverse~~we ~~outcome~~intend isto ~~probable~~terminate the registration of ~~occurrence~~our common stock and ~~the~~Preferred ~~amount~~Stock is(as ~~estimable~~defined below).

• We ~~review~~may ~~long-lived~~not ~~assets~~receive any proceeds from any of these transactions after the payment of outstanding debt that some of these companies may owe and ~~goodwill~~any ~~for~~fees and ~~impairment~~expenses asincurred ~~described~~in connection with these transactions. See, in particular, “Risk Factors – Risk Factors Relating to Cablecom.” To the ~~Notes~~extent we receive net cash proceeds from any asset sale we or our subsidiaries complete, the 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”) will be entitled to ~~Consolidated~~mandatory ~~Financial~~redemption ~~Statements~~in a like amount, subject ~~included~~to some limited exceptions set forth in our charter, until all shares of the ~~Company’s~~Preferred ~~Annual~~Stock ~~Report~~(having onan ~~Form~~aggregate ~~10-K~~of ~~for~~approximately ~~the~~$351.8 million ~~year~~in liquidation ~~ended~~preference, exclusive of dividends payable of $17.2 million at September 30, 2003, which was paid on October 15, 2003) have been redeemed.

3534

BackTable toof IndexContents

~~December~~Subject ~~31,~~to ~~2002.~~our Weboard’s ~~obtained~~determination ~~a valuation~~ to ~~assist~~retain ~~with~~an ~~the~~appropriate ~~determination~~reserve, of the net ~~fair~~proceeds ~~value~~ of ~~long-lived~~our ~~assets~~expected ~~and~~$15 million ~~goodwill.~~payment Inin ~~analyzing~~connection ~~potential~~with ~~impairments,~~the Cablecom ~~projections~~restructuring ofis ~~future~~expected ~~cash~~to ~~flows~~be ~~from~~subject ~~the~~to ~~asset~~this ~~are~~mandatory ~~used~~redemption provision. ~~The~~Given ~~projections~~the ~~are~~liquidation ~~based~~preference on ~~assumptions, judgments and estimates of growth rates for~~ the ~~related~~Preferred ~~business,~~Stock ~~anticipated future economic, regulatory~~ and ~~political conditions,~~ the anticipated ~~assignment~~value of ~~discount~~our ~~rates~~assets, ~~relative~~it tois ~~risk~~unlikely ~~and~~that ~~estimates~~any ofsuch ~~terminal~~liquidation ~~values.~~will generate ~~Changes~~any toproceeds ~~these~~or ~~variables~~distributions ~~in the future may necessitate impairment charges~~ to ~~reduce~~ the ~~carrying~~holders ~~value~~of toour ~~fair~~common ~~value~~stock.

• Separation ~~Fixed~~from ~~assets~~NTL ~~and~~Incorporated; ~~intangible~~Fresh ~~assets~~Start 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.Accounting

• On ~~The~~January 10, ~~valuation~~2003, ofthe ~~our~~company ~~pension~~then ~~plans~~known ~~requires~~as ~~the~~NTL ~~use~~Incorporated of(“Old NTL”) ~~assumptions~~emerged ~~and~~from ~~estimates~~bankruptcy ~~that~~protection ~~are~~and ~~used~~consummated toits ~~develop~~reorganization plan. ~~actuarial~~Through ~~valuations~~this ofreorganization ~~expenses~~plan, ~~projected~~Old ~~benefit~~NTL ~~obligations~~was ~~and~~separated ~~funding~~into ~~requirements.~~two independent ~~These~~companies, ~~assumptions~~effective ~~include~~January 10, ~~among~~2003. ~~others~~One company, ~~discount~~which ~~rates~~assumed the name “NTL Incorporated,” ~~investment~~holds ~~returns~~substantially ~~and~~all ~~projected~~of ~~salary~~Old ~~increases.~~NTL’s ~~Changes~~assets in ~~assumptions~~the United Kingdom and ~~future~~Ireland ~~investment~~(“New ~~returns~~NTL”). ~~could~~Our ~~potentially~~company, ~~have~~which aassumed ~~material~~the ~~impact~~name “NTL onEurope, ~~our~~Inc.,” ~~pension~~is ~~expense~~the other entity that was created and ~~funding~~we ~~requirements~~hold various assets in Europe and elsewhere.

~~Results~~ With the separation of ~~Operations~~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 has been restructured), our assets are not material compared to those of New NTL. As discussed below, we expect to have no further interest in Cablecom as of November 19, 2003. Further, as discussed above, our board of directors and management have been exploring the strategic and financial alternatives available to us. Accordingly, the historical financial statements of Old NTL for periods prior to January 1, 2003, are not particularly reflective of our current and anticipated future business and should not be relied upon as indicative of our future performance.

~~The~~ Until ~~following~~its ~~results~~restructuring ofon ~~operations~~November 12, 2003, Cablecom had approximately ~~include~~CHF ~~our~~3,792 million ~~continuing~~in ~~operations~~bank debt (which included recently accrued interest payments) that initially matured on April 30, 2003 and had been extended to November 18, 2003. ~~Although~~Prior weto dothe ~~not~~November 12, ~~expect~~2003 restructuring, Cablecom tohad beinsufficient ~~included~~resources into ~~our~~satisfy ~~consolidated~~such ~~results~~obligation. inIn addition, prior to the November 12, ~~future~~2003 ~~(See~~restructuring, Cablecom and certain of its subsidiaries were “~~Risk~~overindebted” ~~Factors~~under –Swiss ~~Risk~~law and, accordingly, but for the recent ~~Factors~~restructuring, ~~Relating~~could have been required to ~~Cablecom”)~~file for insolvency proceedings in Switzerland. Accordingly, ~~because~~during the past year, Cablecom isand ~~currently~~its ~~one~~lenders have been in discussions regarding a complete financial restructuring of Cablecom. ~~our~~On ~~wholly-owned~~June 19, ~~subsidiaries~~2003, ~~these~~Cablecom’s ~~results~~board of ~~operations~~directors ~~include~~had been advised that 100% of its lenders and other holders of economic interests in Cablecom’s bank debt have agreed upon the principal terms and parameters for the restructuring of that debt.

~~For~~ The ~~the~~principal ~~Three~~terms ~~Months~~for ~~Ended June 30, 2003, as Compared to~~ the ~~Comparable~~financial ~~Second~~restructuring ~~Quarter of 2002.~~were:

~~Revenue,~~• ~~for the three months ended June 30, 2003, increased 22.4 percent to $122.7 million from $100.2 million in 2002.~~ The ~~increase~~outstanding inprincipal ~~revenue~~amount ~~is primarily due to the effect~~ of the ~~strength~~debt ofwould ~~the~~be Swiss Franc against the U.S. dollar for the quarter presented, as well as increases in television subscribers, broadband revenues and business systems customers, at our Cablecom unit, which more than offset the effects of reduced ~~revenues at Premium TV. Revenue~~ from ~~our other businesses also reflected growth in the comparable period but only account for~~ approximately ~~two~~CHF ~~percent of our consolidated revenue for the current quarter~~3.8 ~~Premium~~billion ~~TV’s~~to ~~revenues, in local currency, decreased by~~ approximately 50CHF percent and reflected the loss of ITV Digital’s programming revenue for British Eurosport (when ITV Digital filed for bankruptcy), and reductions in the stream of 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)1.7 ~~During the quarters ended June 30, 2003 and 2002, Cablecom accounted for 95 percent and 85 percent, respectively, of our consolidated revenue~~billion.

~~Operating~~• ~~expenses~~The ~~(excluding~~facility ~~depreciation,~~would ~~which~~be issplit ~~discussed~~into ~~below)~~two ~~totaled $46.7 million for the second quarter of 2003~~tranches, ~~and~~one ~~reflected~~with ana ~~increase~~final ofmaturity ~~$8.7~~date ~~million (or 22.9 percent) over the amount reported for the three months ended June 30, 2002. In local currency, Cablecom reported an 8.4 percent increase in its operating expenses, due to its support~~ of ~~its~~December ~~increased revenue. Cablecom’s operating expenses as a percentage of its revenue~~31, in2009 ~~local currency, decreased to 36.6 percent for the second quarter of 2003 from 37.4 percent for last year’s second quarter. Premium TV’s operating expenses decreased (in both local currency~~ and ~~U.S.~~one ~~dollars)~~with as a ~~result~~final ofmaturity ~~staffing~~date ~~cutbacks~~of ~~and the reduction in media rights charges as rights contracts expired. During the three months ended~~ June 30, ~~2003 and 2002, Cablecom accounted for 91 percent and 85 percent, respectively, of our consolidated operating expenses~~2010.

~~Selling,~~• ~~general~~Cablecom’s ~~and~~lenders ~~administrative~~would ~~expenses~~acquire ~~decreased~~control byof ~~$11.3~~substantially ~~million~~all ~~during~~of ~~the~~Cablecom’s ~~second~~share ~~quarter~~capital, ofwith ~~2003~~our ~~over~~remaining ~~the~~interest ~~amount~~being ~~reported~~acquired ~~for~~by ~~the~~certain ~~three~~members ~~months~~of ~~ended~~the ~~June~~new ~~30,~~shareholder ~~2002~~group. ~~In local currency,~~

36• At the time of the consummation of the restructuring, the additional equity capital would be raised through a rights offering to the new shareholder group.

~~Back~~ A restructuring of Cablecom’s debt and equity on those terms was completed on November 12, 2003. As a result, effective November 19, 2003, the Company will no longer have any remaining interest in Cablecom and the Company expects to ~~Index~~receive a payment of $15 million. Accordingly, from and after November 12, 2003, the results of Cablecom will no longer be reported as part of the Company’s consolidated results of operations and Cablecom will be treated as a discontinued operation beginning in the fourth quarter of 2003. As a result, our financial statements which include the assets and results of

Cablecom’s selling, general and administrative expenses as a percent of sales increased to 30.0 percent in the second quarter of 2003 from 25.4 percent for the prior year’s comparable quarter. This increase was required to support its additional revenue base. Premium TV reported a35 ~~significant decrease in selling, general and administrative expenses reflecting Premium TV’s cost reduction program during 2002.~~

PremiumTable TV recorded an asset impairment charge of approximately $12.9 million during the second quarter of 2002, reflecting the write down of various long-term assets. There was no such charge for the three months ended June 30, 2003.Contents

~~Other~~Cablecom ~~charges~~may ~~totaled~~not ~~$2.4~~necessarily ~~million~~reflect inour ~~the~~results ~~second quarter~~ of ~~2002 and related to the information technology integration program at Cablecom~~operations, ~~which~~financial position ~~was~~and ~~substantially~~cash ~~completed~~flows ~~during~~in the ~~first quarter of 2003~~future.

~~Corporate~~ Old ~~expenses~~NTL ~~totaled~~operated ~~$4.5~~its ~~million~~business ~~for~~as a debtor-in-possession subject to the jurisdiction ~~three~~of ~~months~~the ~~ended~~Bankruptcy ~~June~~Court 30during the period from May 8, 2002 until January 10, 2003. Accordingly, ~~which~~Old ~~reflects~~NTL’s aconsolidated ~~modest~~financial ~~increase~~statements for periods prior to its emergence from Chapter 11 reorganization were prepared in accordance with the $4American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (“SOP 90-7”).3 ~~million~~In ~~reported~~addition, we adopted fresh-start reporting upon our emergence from Chapter 11 reorganization in accordance with SOP 90-7. For financial reporting purposes, the ~~comparable~~effects ~~2002~~of ~~quarter~~the consummation of the bankruptcy plan as well as adjustments for fresh-start reporting have been recorded in our unaudited condensed consolidated financial statements as of January 1, 2003.

~~Depreciation~~ Pursuant ~~expense~~to ~~for~~fresh-start ~~the~~reporting, ~~second~~a ~~quarter~~new ofentity ~~the~~was ~~year~~deemed ~~totaled~~created ~~$46.7~~for financial ~~million,~~reporting ~~which~~purposes isand ~~approximately~~the ~~$2.3~~carrying ~~million~~value ~~lower~~of ~~than~~our ~~last~~assets ~~year’s~~and liabilities ~~second~~was ~~quarter amount of $49~~adjusted.0 ~~million.~~The ~~However,~~carrying invalue ~~local currency, Cablecom’s depreciation for the second quarter~~ of ~~the~~our ~~year~~assets ~~reflected~~was aadjusted to their ~~reduction~~reorganization ofvalue ~~approximately~~that ~~four~~is ~~percent~~equivalent ~~due~~ to ~~the~~their ~~adoption~~estimated offair ~~“Fresh~~value. The ~~Start~~carrying ~~Accounting”~~value ~~and~~of ~~the~~our ~~related~~liabilities ~~reduction~~was inadjusted ~~the~~to ~~carrying~~their ~~value~~present ~~of Cablecom’s depreciable fixed assets~~value.

~~Amortization~~Application ~~expense during the second quarter~~ of ~~2003~~Critical ~~decreased~~Accounting byPolicies ~~84 percent to $3.0 million from $18.9 million for the second quarter of the prior year. The decrease is due to the change in the amount of~~ and ~~amortizable life of the value of the customer lists at Cablecom~~Estimates ~~due to the adoption of “Fresh Start Accounting” at our Cablecom unit.~~

~~Interest~~ Our ~~income~~consolidated ~~and~~financial ~~other~~statements ~~income~~ and ~~expense,~~related ~~net~~financial ~~was~~information are ~~$2.1~~based ~~million~~on the application of ~~net~~generally ~~income~~accepted ~~for~~accounting principles in the United ~~three~~States. ~~months~~GAAP ~~ended~~requires ~~June~~the 30use of estimates, ~~2003~~assumptions, ~~reflecting~~judgments aand subjective ~~change~~interpretations of ~~$5.5~~accounting ~~million~~principles ~~from~~that ~~the~~have ~~$3.4~~an ~~million~~impact ofon ~~net~~the assets, liabilities, revenue and expense amounts reported, ~~for~~as ~~last~~well ~~year’s~~as disclosures ~~second~~about ~~quarter~~contingencies, risk and financial condition. The ~~change~~following critical isaccounting ~~due~~policies have the potential to have a ~~reduction~~more insignificant impact ~~losses recorded~~ on our ~~investments~~financial ~~carried~~statements, oneither ~~the~~because ~~cost~~of ~~basis~~the significance of ~~accounting~~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 ~~reduction~~point in ~~other~~time, ~~expenses~~transactions which are continuous in nature.

~~Interest~~• ~~expense~~We ~~for~~maintain ~~the~~allowances ~~second~~for ~~quarter~~doubtful ofaccounts ~~the year is comprised of two elements. One relates to the normal interest expense incurred during the second quarter of the year on the Company’s face value of its outstanding debt,~~ and ~~amounted~~notes toreceivable ~~$24.9 million. The second element of the interest expense figure,~~ for the three months ended June 30, 2003, relates to the accretion (during the second quarter) on the Cablecom debt. Under the provisions of Fresh Start Accounting, the Company recorded the Cablecom debt at its estimated ~~fair~~losses ~~value,~~ resulting infrom ~~a gain on~~ the ~~write-down~~potential ofinability ~~Cablecom’s outstanding debt on January 1, 2003~~ of ~~$1,341.8~~our ~~million.~~customers ~~Substantially~~or ~~all of Cablecom’s debt was due on April 30, 2003 (although subsequent extensions granted to Cablecom by its lenders have delayed~~ the ~~maturity~~other ~~date~~parties to ~~October~~make ~~31, 2003)~~payments. ~~During~~These ~~the~~ allowance ~~first~~are ~~four~~estimated ~~months~~based ofon ~~2003,~~ the ~~Company~~current ~~was~~aging ~~required to accrete Cablecom’s outstanding debt back to its full face value at its original maturity date (April 30, 2003). Therefore, during the first quarter~~ of ~~2003~~receivables, ~~the~~prior ~~Company~~collection ~~charged~~experience ~~interest~~and ~~expense~~future ~~for~~expectations ~~approximately $1,006.6 million to reflect the accreted value~~ of ~~the~~conditions ~~Cablecom~~that ~~debt~~might atimpact ~~March 31, 2003, with~~ the ~~balance~~collectibility. ofIf the ~~accretion~~financial ~~recorded~~condition ~~during the month~~ of ~~April~~our ~~2003.~~customers ~~Interest~~or ~~expense for~~ the ~~three~~other ~~months~~parties ~~ended~~were ~~June 30, 2002 totaled $39.1 million. This compares~~ to ~~the~~deteriorate ~~current~~resulting ~~year’s~~in ~~interest~~an ~~expense~~impairment ofin ~~$24.9~~ their ~~million~~ability ~~(prior~~ to ~~the~~make ~~accretion~~payments, ofadditions ~~the Cablecom debt~~ to ~~its face value, as discussed above). This reduction primarily reflects~~ the ~~interest~~allowances ~~expense~~may ~~recorded~~be during a portion of the second quarter of 2002 on the Predecessor Company’s outstanding publicly traded notes which were subsequently cancelled (along with the outstanding interest payment obligations) upon the effective date of the bankruptcy planrequired. ~~The decrease also reflected lower interest rates on the Cablecom credit facility during the periods presented.~~

37• 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 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.

~~Back~~• We review long-lived assets and goodwill for impairment as described in the Notes to ~~Index~~Consolidated Financial Statements, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. 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.

Share of losses from equity investments totaled $1.3 million during the second quarter of 2003, as compared to $37.5 million in the comparable 2002 quarter. The losses during the second quarter of 2002 primarily related to the Predecessor Company’s investments in B2 and36 ~~Noos, which were substantially written off by December 31, 2002.~~

ForeignTable currency transaction gains (losses) was a gain of $0.1 million for the three months ended June 30, 2003 as compared to a (net) gain of $2.2 million in 2002. 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.Contents

~~There~~• ~~were~~Fixed noassets ~~charges~~and ~~for~~intangible ~~recapitalization~~assets ~~items,~~are ~~net~~assigned inuseful lives which impact the ~~second~~annual ~~quarter~~depreciation and amortization expense. The assignment of ~~the~~useful ~~year~~lives ~~versus~~involves asignificant ~~charge~~judgments and the use of $8estimates.0 ~~million~~Changes ~~for~~in ~~the~~technology ~~comparable~~or ~~quarter~~changes in intended use of these assets may cause the ~~prior~~estimated ~~year~~useful life to change.

We• ~~reported~~The anvaluation ~~income~~of ~~tax~~our ~~expense~~ pension plans requires the use of ~~$0.6~~assumptions ~~million~~and ~~for~~estimates ~~the~~that ~~second~~are ~~quarter~~used to develop actuarial valuations of ~~2003~~expenses, ~~versus~~projected abenefit ~~tax~~obligations ~~benefit~~and offunding ~~$14~~requirements.~~7 million~~ inThese ~~last~~assumptions ~~year’s second~~include, ~~quarter.~~among ~~This~~others, ~~change~~discount isrates, ~~primarily~~investment ~~attributable~~returns toand aprojected ~~reduction~~salary inincreases. ~~the amount~~Changes ofin ~~tax~~assumptions ~~benefit~~and ~~recognized~~future ~~for~~investment ~~the~~returns ~~current~~could ~~year~~potentially ~~losses,~~have toa ~~the~~material ~~extent such~~impact ~~losses~~on ~~would~~our ~~not~~pension ~~reduce~~expense ~~existing~~and ~~deferred~~funding ~~tax liabilities~~requirements.

~~Loss~~Results ~~from discontinued operations totaled $408.4 million (net~~ of income tax benefits of $6.3 million) in the second quarter of 2002. Losses from discontinued operations included NTL Communications Corp. and subsidiaries, NTL Australia and Rediffusion (a subsidiary ofOperations ~~Cablecom).~~

~~For~~ The ~~the~~following ~~Six~~results ~~Months~~of ~~Ended~~operations ~~June~~include ~~30,~~our ~~2003,~~continuing asoperations. Although ~~Compared~~we do not expect Cablecom to be included in our consolidated results in the ~~Comparable~~future ~~Period~~(See “Risk Factors – Risk Factors Relating to Cablecom”), because Cablecom is currently one of ~~2002~~our wholly-owned subsidiaries, these results of operations include Cablecom.

~~Revenue,~~For ~~for~~ the ~~first~~Three ~~six~~Months ~~months~~Ended ofSeptember 30, 2003, ~~increased~~as ~~28.3~~Compared ~~percent~~ to ~~$242.3 million from $188.8 million in 2002. The increase in revenue is primarily due to~~ the ~~effect~~Comparable ofThird ~~the~~Quarter ~~strength~~ of ~~the Swiss Franc against the U~~2002.~~S. dollar for the period presented, as well as, increases in~~ television subscribers, broadband revenues and business systems customers, at our Cablecom unit, which more than offset the effects of reduced revenues at Premium TV. Revenue from our other businesses also reflected growth in the comparable period but only account for approximately two percent of our consolidated revenue for the current quarter. Premium TV’s revenues, in local currency, decreased by approximately 50 percent and reflected the loss of ITV Digital’s programming revenue for British Eurosport (when ITV Digital filed for bankruptcy), and reductions in the stream of 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). During the first six months of 2003 and 2002, Cablecom accounted for 95 percent and 89 percent, ~~respectively, of our consolidated revenue.~~

~~Operating expenses (excluding depreciation~~ Revenue, ~~which is discussed below) totaled $90.9 million~~ for the ~~first~~three ~~half~~months ofended September 30, 2003, ~~and~~increased ~~reflected~~12.8 percent anto ~~increase~~$123.7 million offrom $8109.7 million ~~(or~~in 102002.6 ~~percent)~~The ~~over~~increase ~~the~~in ~~amount~~revenue is ~~reported~~primarily ~~for~~due to the ~~first~~effect ~~six~~of ~~months~~the strength of ~~2002.~~the InSwiss ~~local~~Franc ~~currency,~~against ~~Cablecom’s operating~~the U.S. ~~expenses~~dollar for the ~~first~~quarters ~~six~~presented, ~~months~~as ofwell ~~the~~as ~~year~~increases in television subscribers, ~~approximated~~broadband ~~the~~revenues ~~amount~~and ~~reported~~business ~~for~~systems ~~the~~customers, ~~first~~at ~~half~~our ofCablecom unit, ~~2002.~~which ~~This~~more isthan offset the ~~result~~effects of ~~cost~~reduced ~~reduction~~revenues ~~programs~~at ~~offsetting~~Premium ~~the~~TV. Revenue ~~increased~~from ~~costs~~our ~~required~~other tobusinesses ~~support~~reflected ~~its~~reductions ~~increased~~in ~~revenue.~~the ~~Cablecom’s~~comparable ~~operating expenses~~ period as a ~~percentage~~result of ~~its~~our ~~revenue,~~effort in to ~~local~~exit ~~currency,~~unprofitable ~~decreased~~business ~~to 35~~units.7 ~~percent~~However, ~~for~~these operations ~~the~~only ~~first~~account ~~half~~for ofapproximately ~~2003~~three ~~from~~percent ~~40.0~~of ~~percent~~our consolidated revenue for the ~~first~~current ~~six months of 2002~~quarter. Premium TV’s ~~operating~~revenues, ~~expenses decreased (~~in ~~both~~ local currency, decreased ~~and~~by ~~U.S.~~approximately ~~dollars)~~20 percent asduring athe ~~result~~period, ofreflecting ~~staffing cutbacks and~~ the reduction in ~~media~~programming ~~rights~~revenue ~~charges~~for asBritish ~~rights contracts expired~~Eurosport. During the ~~six months~~ quarters ended ~~June~~ September 30, 2003 and 2002, Cablecom accounted for 90 97 percent and 81 90 percent, respectively, of our consolidated ~~operating expenses~~revenue.

~~Selling,~~ Operating ~~general~~expenses ~~and~~(excluding ~~administrative~~depreciation, ~~expenses~~which ~~decreased~~is bydiscussed below) totaled $246.0 5 million ~~during~~for the ~~first~~third ~~half~~quarter of 2003, and reflected a decrease of $4.1 million (or 8.0 percent) over the amount reported for the ~~six~~three months ended ~~June~~ September 30, 2002. In local currency, Cablecom’s ~~selling~~reported a modest decrease in its operating expenses for the comparable quarters, ~~general~~reflecting their ~~and~~efforts ~~administrative~~to control expenses. Cablecom’s operating expenses as a percentage ~~percent~~ of ~~sales~~its ~~increased~~revenue, in local currency, decreased to 2838.1 4 percent infor the third quarter of 2003 from 2440.1 3 percent for ~~the~~last ~~prior~~ year’s ~~six~~third ~~months~~quarter. ~~ended~~Premium TV’s ~~June~~operating ~~30,~~expenses ~~2002.~~decreased ~~This~~(in ~~increase~~both ~~was~~local ~~required~~currency toand ~~support~~U.S. ~~its~~dollars) ~~addition~~as a ~~sales~~result ~~volume.~~of ~~Premium~~the TVreduction ~~reported~~in aprogramming ~~significant~~activity ~~decrease~~for inBritish ~~selling~~Eurosport, ~~general~~staff cutbacks and ~~administrative~~the ~~expenses~~reduction ~~reflecting~~in ~~Premium~~media ~~TV’s~~rights ~~cost~~charges as rights contracts expired. During ~~reduction~~the ~~program~~three ~~during~~months ended September 30, 2003 and 2002, Cablecom accounted for 98 percent and 78 percent, respectively, of our consolidated operating expenses.

38 Selling, general and administrative expenses decreased by $1.1 million during the third quarter of 2003 from the amount reported for the three months ended September 30, 2002. In local currency, Cablecom’s selling, general and administrative expenses as a percent of sales were 20.3 percent in the third quarter of 2003 which approximated the 19.8 percent for the prior year’s comparable quarter. Premium TV reported a significant decrease in selling, general and administrative expenses reflecting Premium TV’s cost reduction programs which were required to bring their expenses in line with their reduced revenue levels.

~~Back to Index~~37

PremiumTable TV recorded an asset impairment charge of approximately $12.9 million during the first half of 2002, reflecting the write down of various long-term assets. There was no such charge for the six months ended June 30, 2003.Contents

~~Other~~ Premium ~~charges~~TV ~~totaled~~recorded an asset impairment charge of approximately $32.6 2 million ~~for~~during the ~~first~~third ~~six~~quarter ~~months~~ of ~~2003~~2002 and ~~approximated~~Cablecom ~~last~~recorded ~~year’s~~a similar charge for of $32.4 5 million, ~~for~~reflecting the ~~comparable~~write ~~period.~~down ~~These~~of ~~charges~~various ~~related~~long-term toassets. ~~the information technology integration program at Cablecom, which~~ There was ~~substantially~~no ~~completed~~such ~~during~~ charge for the ~~first~~three ~~quarter~~months ofended September 30, 2003.

~~Corporate~~ Other ~~expenses~~charges totaled $9.2 .8 million ~~for~~in the ~~six~~third ~~months~~quarter ~~ended~~of ~~June 30,~~ 2003, asand ~~compared to~~ $110.2 1 million ~~for~~in the ~~first~~second ~~six~~quarter ~~months~~ of ~~the prior year~~2002. The ~~decrease~~charges in ~~corporate~~the ~~expenses~~current ~~for~~quarter relate ~~the~~primarily ~~period~~to ~~reflects~~legal aand ~~general~~accounting ~~decrease~~fees inat ~~corporate~~Cablecom ~~spending~~which ~~due~~were incurred as the company continues to arenegotiate ~~reduction~~the terms of ~~staff~~its outstanding debt obligations. ~~and~~Last ~~spending~~year’s ~~for~~third ~~legal,~~quarter ~~accounting~~charge ~~and~~related ~~professional~~to ~~fees~~the information technology integration program at Cablecom, which was substantially completed during the ~~comparable~~first ~~periods~~quarter of 2003.

~~Depreciation~~ Corporate ~~expense~~expenses ~~for the first six months of the year~~ totaled $~~92.~~4 .1 million, ~~which~~for isthe ~~approximately~~three ~~$2.5~~months ~~million~~ended September 30, ~~lower~~2003, ~~than~~which ~~last~~reflects ~~year’s~~an ~~six~~increase ~~month total~~ of $940.9 million. ~~However,~~over inthe ~~local~~$3.2 million ~~currency,~~reported ~~Cablecom’s~~in ~~depreciation~~the ~~for~~comparable ~~the~~2002 ~~period~~quarter. ~~reflected~~This aincrease ~~reduction~~reflects ofhigher professional ~~approximately~~fees ~~four~~incurred ~~percent~~by ~~due~~the tocompany ~~the~~as ~~adoption~~it ofcontinues ~~“Fresh~~to ~~Start~~restructure ~~Accounting”~~its subsidiaries and ~~the~~review ~~related~~its ~~reduction~~strategic ~~in the carrying value of Cablecom’s depreciable fixed assets~~objectives.

~~Amortization~~ Depreciation expense for the ~~six~~third ~~months~~quarter ~~ended~~of ~~June~~the ~~30,~~year ~~2003~~totaled ~~decreased~~$45.6 million, bywhich 85is ~~percent~~approximately to $57.5 8 million ~~from~~lower ~~$36.7~~than ~~million~~last ~~for~~year’s ~~the~~third quarter ~~comparable~~amount ~~2002~~of ~~period~~$53.4 million. ~~The~~In ~~decrease~~local iscurrency, ~~due~~Cablecom’s todepreciation for the ~~change~~third inquarter ~~the amount~~ of ~~and amortizable life of~~ the ~~value~~year ofreflected ~~the~~a ~~customer~~modest ~~lists~~reduction ~~at Cablecom~~ due to the adoption of “Fresh Start Accounting” atand ~~our~~the related reduction in the carrying value of Cablecom’s ~~unit~~depreciable fixed assets.

~~Interest~~ Amortization ~~income and other income and~~ expense, ~~net~~during ~~was~~the ~~$2.0~~third ~~million~~quarter of ~~net income for the six months ended June 30,~~ 2003, ~~reflecting~~decreased aby ~~reduction~~92 percent ofto $52.9 6 million from ~~the~~$33.4 million ~~amount reported~~ for the ~~first~~third ~~six~~quarter ~~months~~ of ~~2002~~the prior year. The ~~change~~decrease is primarily due to athe ~~reduction~~change in ~~interest~~the ~~income~~amount of and amortizable ~~losses~~life ~~recorded~~of onthe ~~our~~value ~~investments~~of ~~carried~~the oncustomer ~~the~~lists ~~cost~~at ~~basis~~Cablecom ofdue ~~accounting~~to ~~and~~the adoption aof ~~reduction~~“Fresh inStart ~~expenses~~Accounting” ofat aour ~~miscellaneous~~Cablecom ~~nature~~unit.

Interest ~~expense~~income ~~for~~and ~~the~~other ~~first~~income ~~six~~and ~~months of the year is comprised of two elements. One relates to the normal interest~~ expense ~~incurred during the period on the Company’s face value of its outstanding debt~~, ~~and~~net ~~amounted~~was to $531.5 million. ~~The second element~~ of ~~the interest~~net income ~~expense figure,~~ for the ~~six~~three months ended ~~June~~ September 30, 2003, ~~relates~~reflecting ~~to the accretion on the Cablecom debt. Under the provisions of Fresh Start Accounting, the Company recorded the Cablecom debt at its estimated fair value, resulting in~~ a ~~gain~~change ~~on the write-down~~ of ~~Cablecom’s outstanding~~ ~~debt on January 1, 2003 of~~ $~~1,341.~~8 ~~million~~.3 million ~~Substantially~~from ~~all of Cablecom’s debt was due on April 30, 2003 (although subsequent extensions granted to Cablecom by its lenders have delayed~~ the maturity date to October 31, 2003). During the first four months of 2003, the Company was required to accrete Cablecom’s outstanding debt back to its full face value at its original maturity date (April 30, 2003). Therefore, during the first six months of 2003, the Company charged interest expense for approximately $~~1,341~~9.8 million ~~to reflect the accreted value~~ of ~~the~~net ~~Cablecom~~ income ~~debt~~reported ~~at April 30, 2003. Interest expense~~ for ~~the~~last ~~six months ended June 30, 2002 totaled $86.0 million. This compares to the current~~ year’s ~~interest~~third quarter. ~~expense~~The ofchange ~~$53.5~~is ~~million~~due ~~(prior~~ to the ~~accretion~~combination of ~~the~~a ~~Cablecom~~reduction ~~debt~~in tointerest income ~~its~~coupled ~~face~~with ~~value,~~a ~~as discussed above). This~~ reduction ~~primarily~~in ~~reflects~~ losses ~~the interest expense~~ recorded ~~during 2002~~ on ~~the~~our ~~Predecessor~~investments Company’s outstanding publicly traded notes which were subsequently cancelled (along with the outstanding interest payment obligations) upon the effective date of the bankruptcy plan. The decrease also reflected lowercarried ~~interest rates~~ on the ~~Cablecom~~cost ~~credit~~basis ~~facility~~of ~~during the periods presented~~accounting.

~~Share~~ Interest ofexpense ~~losses~~for ~~from~~the ~~equity~~third ~~investments~~quarter of the year totaled $13.6 million which reflects a $33.1 million reduction from the $46.7 million reported for the three months ended September 30, 2002. The third quarter change is the ~~first~~net result ~~six~~of ~~months~~(i) the third quarter effect of ~~2003,~~the asCompany’s ~~compared~~adoption to ~~$86~~Financial Accounting Standards No.7 150 ~~million~~(discussed elsewhere in this report) which accounts for an increase in the ~~comparable~~quarterly ~~2002~~interest ~~period~~expense of $4.6 million ~~The~~over the ~~losses~~prior ~~during~~year’s ~~2002~~third ~~primarily~~quarter ~~related~~and to(ii) a ~~the~~reduction ~~Predecessor~~in ~~Company~~Cablecom’s ~~investments~~third inquarter interest B2expense ~~and~~of ~~Noos~~approximately $17.7 million, ~~which~~due ~~were~~to the terms and conditions ~~substantially~~of ~~written~~its ~~off~~debt byrestructuring ~~December~~program 31during the current quarter. In local currency, ~~2002~~Cablecom’s interest expense reflected a 52 percent reduction during the comparable quarters.

39 Share of losses from equity investments totaled $0.1 million during the third quarter of 2003, as compared to $81.4 million in the comparable 2002 quarter. The losses during the third quarter of 2002 primarily related to the Predecessor Company’s investments in iesy, B2 and Noos, which were substantially written off by December 31, 2002.

~~Back~~ Foreign currency transaction gains were $0.5 million for the three months ended September 30, 2003 as compared to ~~Index~~$4.7 million in 2002. 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.

Foreign currency transaction gains (losses) was a gain of $0.6 million for the six months ended June 30, 2003 as compared to a (net) gain of $2.2 million in 2002. The change is primarily due to the effect of changes in exchange rates on receivables denominated in non-U.S.38 ~~dollar currencies held by subsidiaries whose functional currency is the U.S. dollar.~~

ThereTable were no charges for recapitalization items, net during the first six months of the current year, versus charges of $21.7 million for the comparable period in the prior year.Contents

We There ~~reported~~were anno ~~income~~charges ~~tax~~for ~~provision of~~recapitalization ~~$1.3~~items, ~~million~~net ~~for~~in the ~~first~~third ~~six months~~ quarter of ~~2003,~~the year versus a ~~tax~~ benefit of $2510.5 1 million for the ~~six~~comparable ~~months~~quarter ~~ended~~in ~~June~~the prior 30year, ~~2002.~~when ~~This change is primarily attributable to a reduction in~~ the ~~amount~~Predecessor ofCompany ~~tax~~adjusted ~~benefit~~its ~~recognized~~reporting ~~for~~structure ~~the~~to ~~current~~reflect ~~year losses, to~~ the ~~extent such~~conditions ~~losses~~and ~~would~~terms ~~not~~of ~~reduce~~its ~~existing~~Bankruptcy ~~deferred tax liabilities~~Plan.

~~Loss~~ We ~~from~~reported ~~discontinued~~an ~~operations~~income ~~totaled~~tax expense of $~~878~~0.9 1 million ~~(net~~for the third quarter of 2003, ~~income~~versus a tax ~~benefits~~benefit of $1814.8 7 million) ~~for~~in ~~the~~last ~~first~~year’s ~~six~~third ~~months~~quarter. This ofchange ~~2002.~~is ~~Losses~~primarily ~~from~~attributable ~~discontinued~~to ~~operations~~a ~~included~~reduction ~~NTL~~in ~~Communications~~the ~~Corp.~~amount ~~and~~of ~~subsidiaries,~~tax benefit ~~NTL~~recognized ~~Australia~~for ~~and~~the ~~Rediffusion~~current (ayear ~~subsidiary~~losses, ofto the extent such losses would not ~~Cablecom)~~reduce existing deferred tax liabilities.

~~Liquidity~~ Loss from discontinued operations totaled $295.9 million (net of income tax benefits of $10.3 million) in the third quarter of 2002. Losses from discontinued operations included NTL Communications Corp. and ~~Capital~~subsidiaries, ~~Resources~~NTL Australia and Rediffusion (a subsidiary of Cablecom).

WeFor ~~emerged~~the ~~from~~Nine ~~bankruptcy~~Months onEnded ~~January 10~~September 30, 2003, ~~at which time,~~ as ~~part~~Compared ofto the ~~reorganization~~Comparable ~~plan,~~Period ~~all~~ of ~~our secured debt, common stock and preferred stock was cancelled and new common stock and Preferred Stock was issued~~2002. ~~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 (other than Cablecom) had an additional amount of approximately $11 million in cash. As of June 30, 2003, we ~~had approximately $57.3 million in cash and our subsidiaries (other than Cablecom) had an additional amount of approximately $10 million in cash.~~

We Revenue, ~~are~~for ~~primarily~~the afirst ~~holding~~nine ~~company~~months ~~for~~of ~~the~~2003, ~~stock~~increased of22.6 percent ~~our~~to $366.0 million ~~subsidiaries,~~from ~~with~~$298.5 million noin ~~material~~2002. ~~independent~~The ~~source~~increase in revenue is primarily due to the effect of ~~cash~~the ~~proceeds.~~strength ~~During~~of ~~2003,~~the weSwiss doFranc ~~not~~against ~~anticipate~~the ~~receiving~~U.S. dollar ~~any~~for ~~material~~the ~~cash~~period ~~proceeds~~presented, ~~from~~as ~~our~~well ~~subsidiaries’~~as, ~~operating~~increases ~~activities.~~in ~~Accordingly~~television subscribers, webroadband ~~expect~~revenues toand ~~fund~~business systems customers, at our Cablecom unit, ~~operations~~which ~~primarily~~more ~~out~~than ofoffset ~~our~~the ~~cash~~effects of ~~approximately~~reduced ~~$57.3~~revenues ~~million~~at ~~($17~~Premium TV.2 Revenue ~~million~~from ofour ~~which~~other ~~will~~businesses bealso ~~paid~~reflected asgrowth ain ~~dividend~~the oncomparable period ~~our~~but ~~Preferred~~only ~~Stock~~account onfor ~~October~~approximately ~~15,~~two ~~2003)~~percent ~~and~~of our ~~subsidiaries~~consolidated revenue for the current quarter. Premium TV’s ~~(other~~revenues, ~~than~~in ~~Cablecom)~~local ~~cash~~currency, decreased ofby approximately ~~$11~~50 percent ~~million~~and ~~remaining~~reflected ~~after~~ the ~~consummation~~loss of ~~the~~ITV Digital’s programming ~~reorganization~~revenue ~~plan.~~for ~~During~~British ~~2003,~~Eurosport we(when doITV ~~not~~Digital ~~anticipate~~filed ~~borrowing~~for bankruptcy), ~~any~~and ~~material~~reductions ~~amount~~in the stream of ~~funds~~revenue ~~and~~due weto doa ~~not~~change ~~expect~~in toits agreement ~~issue~~with ~~any~~the Football League (which altered various terms of ~~our~~the financial ~~securities~~aspects ~~for~~of ~~cash~~the joint venture with the league). ~~Further,~~During ~~during~~the first nine months of 2003 and 2002, weCablecom doaccounted ~~not~~for ~~anticipate~~95 percent ~~any~~and ~~material~~91 percent, respectively, ~~capital~~of ~~expenditures~~our consolidated revenue.

We Operating ~~expect~~expenses to(excluding ~~either~~depreciation, ~~complete~~which ais ~~restructuring~~discussed ofbelow) totaled $137.4 million for the ~~debt~~first ~~and~~three ~~equity~~quarters of ~~Cablecom~~2003, inand ~~the~~reflected ~~near~~an increase ~~future,~~of ~~which~~$4.6 million is(or ~~expected~~3.5 percent) toover ~~result~~the inamount reported for the first ~~acquisition~~nine months of ~~our~~2002. ~~interest~~In inlocal currency, Cablecom’s oroperating aexpenses for ~~dilution~~the first nine months of ~~our~~the ~~ownership~~year, ~~interest~~approximated tothe ~~less~~amount ~~then~~reported ~~five~~for ~~percent~~the first ~~or,~~three ifquarters ~~this~~of ~~restructuring~~2002. This is ~~not~~the ~~successful,~~result of cost reduction programs offsetting the increased costs required to ~~file~~support ~~for~~its ~~the~~increased ~~insolvency~~revenue. Cablecom’s operating expenses as a percentage of ~~Cablecom~~its revenue, in ~~Switzerland~~local currency, ~~which~~decreased ~~would~~to ~~result~~36.6 percent infor ~~our~~the ~~having~~first nothree ~~remaining~~quarters ~~ownership~~of in2003 ~~Cablecom~~from 40.1 percent Infor ~~either~~the offirst ~~these~~nine ~~events,~~months ~~the~~of ~~lenders~~2002. ~~under~~Premium ~~Cablecom~~TV’s ~~credit~~operating expenses ~~facility~~decreased ~~would~~significantly ~~have~~during nothese ~~legal~~periods ~~recourse~~(in toboth ~~any~~local ~~assets~~currency and ofU.S. dollars) reflecting the ~~NTL~~reduction ~~Europe~~in ~~group~~programming costs for British Eurosport, ~~other~~staff ~~than~~cutbacks toand the ~~shares~~reduction ofin ~~Cablecom,~~media ~~certain~~rights ~~assets~~charges ofas ~~the~~rights contracts ~~Cablecom~~expired. ~~group~~During ~~and~~the ~~certain~~nine ~~assets~~months ofended ~~our~~September 30, ~~subsidiaries~~2003 ~~which~~and ~~hold~~2002, Cablecom ~~directly~~accounted orfor ~~indirectly,~~93 percent ~~the~~and ~~shares~~82 percent, respectively, of ~~the~~our consolidated ~~Cablecom~~operating ~~group~~expenses.

~~In the event that the proposed restructuring is completed~~ Selling, ~~the~~general ~~Company~~and ~~expects~~administrative ~~that~~expenses ~~its~~decreased ~~remaining~~by ~~interest in Cablecom will be acquired for an amount not in excess of~~ $~~15 million~~3.1 million during ~~If such proposed restructuring is unsuccessful,~~ the ~~Company~~first ~~expects~~three toquarters ~~be deprived~~ of ~~all~~2003 ~~its~~ from ~~ownership~~the ~~interest~~amount inreported ~~Cablecom.~~for ~~Accordingly,~~ the ~~Company~~nine months ~~anticipates~~ended ~~that~~September 30, in2002. ~~the~~In ~~near~~local ~~future~~currency, ~~the results of~~ Cablecom’s ~~will~~selling, general noand ~~longer~~administrative beexpenses ~~reported~~ as ~~part~~a percent of ~~the~~sales ~~Company’s~~increased ~~consolidated~~to ~~results of operations~~25.4 percent Inin ~~that~~2003 ~~regard,~~from it21.5 percent ~~should~~for ~~also~~the beprior ~~noted~~year’s ~~that,~~nine inmonths ~~accordance with the terms of the~~ended September 30, ~~existing~~2002. ~~Cablecom~~This ~~credit~~increase ~~agreement,~~was norequired ~~dividends~~to orsupport ~~distributions~~its ~~have~~addition ~~ever~~sales volume. ~~been~~Premium orTV ~~will~~reported bea ~~made~~significant bydecrease ~~Cablecom~~in toselling, ~~the~~general ~~Company.~~and administrative ~~Further,~~expenses ~~the~~reflecting ~~lenders~~Premium ~~under Cablecom~~TV’s ~~credit~~cost ~~facility~~reduction ~~have~~programs nowhich were ~~legal~~required ~~recourse~~ to ~~any~~bring ~~assets~~their of2003 ~~the~~expenses ~~NTL~~in ~~Europe~~line ~~group,~~with ~~other~~their ~~than~~reduced ~~to the~~revenue levels.

40 Premium TV recorded an asset impairment charge of approximately $15.1 million during the first three quarters of 2002 and Cablecom recorded a similar charge of $2.5 million, reflecting the write down of various long-term assets. There was no such charge for the nine months ended September 30, 2003.

~~Back to Index~~39

sharesTable 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.Contents

~~Our~~ Other ~~management~~charges ~~and~~totaled ~~board~~$6.4 million ~~are~~for ~~exploring strategic and financial alternatives available to us, including our possible liquidation, a going private transaction and~~ the ~~sale~~first ofnine ~~our~~months ~~remaining assets. In this regard, our board established a special committee with Michael Cochran, a member~~ of the board, as its sole, independent member to review, consider, investigate, evaluate, negotiate and recommend action to the entire board with respect to one or more possible going private transactions. 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~~ $133.5 million ~~(but~~for ~~not~~last ~~including~~year’s ~~certain~~comparable ~~guarantees~~period. toThe ~~our~~charges ~~subsidiaries~~ in the ~~aggregate~~current ~~amount of approximately £4.2~~year relate ~~million).~~primarily ~~(See~~to ~~Note~~legal ~~16 - “Commitments~~ and ~~Contingencies”).~~accounting ~~Further,~~fees ~~after~~at ~~reserving~~Cablecom ~~for~~which ~~certain~~were ~~contingent~~incurred as ~~liabilities, to~~ the ~~extent~~company wecontinues ~~have remaining funds legally available, we intend~~ to ~~pay~~renegotiate ~~dividends~~the onterms ~~or redeem shares~~ of ~~our~~its ~~Preferred~~outstanding ~~Stock. In this regard, on September 11, 2003,~~debt ~~our Board of Directors approved a semi-annual dividend of $2~~obligations.50 ~~per~~Last ~~share~~year’s oncharges ~~the~~related ~~Preferred Stock. However, there is no requirement under our charter~~ to ~~pay~~the ~~any~~information ~~future dividends on our Preferred Stock and there is no assurance that we will pay any such future dividends. (See Note 17 –~~technology integration ~~“Subsequent~~program ~~Events.”)~~at ~~The liquidation preference of Preferred Stock aggregates $343 million plus an additional approximate $17.2 million of accrued and unpaid dividends as of June 30~~Cablecom, ~~2003.~~which Inwas ~~addition,~~substantially ~~our~~completed ~~Preferred~~during ~~Stock is also entitled to mandatory redemption out of~~ the ~~net~~ first ~~proceeds~~quarter of ~~any asset sale for cash that we or our subsidiaries complete, subject to some limited exceptions set forth in our charter~~2003. ~~Accordingly, it is highly unlikely that common shareholders will ever receive any distribution related to their shares.~~

We Corporate ~~believe~~expenses ~~that~~totaled ~~our~~$13.3 million ~~existing~~for ~~cash~~the ~~and~~nine ~~cash~~months ~~equivalents~~ended September 30, ~~will~~2003, beas ~~sufficient~~compared to ~~support~~$14.4 million ~~our~~for ~~expected~~the ~~operations~~first ~~and~~nine ~~fund~~months ~~our~~of the ~~capital~~prior ~~commitments~~year. ~~through~~The atdecrease ~~least~~in ~~July~~corporate 1,expenses ~~2004,~~for ~~which~~the period reflects a general decrease in corporate spending due to a reduction of staff and overall spending for legal, asaccounting ~~previously~~and ~~noted~~professional fees, ~~will~~during ~~exclude~~the ~~Cablecom~~comparable periods.

~~Contractual~~ Depreciation ~~Obligations~~expense for the first nine months of the year totaled $138.0 million, which is approximately $10.3 million lower than last year’s nine month total of $148.3 million. In local currency, Cablecom’s depreciation for the period reflected a reduction of approximately 15 percent due to the adoption of “Fresh Start Accounting” and ~~Commercial~~the ~~Commitments~~related reduction in the carrying value of Cablecom’s depreciable fixed assets.

~~The~~ Amortization ~~following~~expense ~~table~~for ~~includes~~the ~~aggregate~~nine ~~information~~months ~~about~~ended ~~our contractual obligations as of June~~ September 30, 2003, decreased asby ~~adjusted~~88.4 percent to ~~give~~$8.1 million ~~effect to our emergence~~ from ~~Chapter~~$70.1 million 11for ~~reorganization, and~~ the ~~periods~~comparable 2002 ~~in which payments are due~~period. The ~~following~~decrease ~~table includes Cablecom which, as discussed elsewhere in the Form 10-Q,~~ is ~~not~~due ~~expected~~ to bethe ~~included~~change in ~~our consolidated results in~~ the ~~near~~amount ~~future.~~of ~~Cablecom’s total long-term debt, operating lease commitments~~ and amortizable ~~unconditional~~life ~~purchase~~of ~~obligations,~~the ~~included~~value inof the ~~table~~customer ~~below,~~lists ~~were~~at ~~$2,809.3~~Cablecom ~~million,~~due ~~$31.5~~to ~~million~~the adoption ~~and~~of ~~$60.6~~“Fresh ~~million,~~Start ~~respectively~~Accounting.”

41 Interest income and other income and expense, net was $3.4 million of net income for the nine months ended September 30, 2003, reflecting a reduction of $14.3 million from the amount reported for the first nine months of 2002. The change is due to a reduction in interest income and losses recorded on our investments carried on the cost basis of accounting and a reduction in expenses of a miscellaneous nature.

~~Back~~ Interest expense for the first nine months of the year is comprised of three elements. One relates to ~~Index~~the normal interest expense incurred during the period on the Company’s outstanding debt (and calculated in accordance with the terms and conditions of Cablecom’s debt restructuring program), and amounted to $65.6 million. The second element of interest expense relates to the Company’s adoption of Financial Accounting Standards No. 150 (discussed elsewhere in this report) which accounts for an increase in interest expense in 2003 of $4.6 million over the prior year’s comparable period. The third element of the interest expense figure, for the nine months ended September 30, 2003, relates to the accretion on the Cablecom debt. Under the provisions of Fresh Start Accounting, the Company recorded the Cablecom debt at its estimated fair value, resulting in a gain on the write-down of Cablecom’s outstanding debt on January 1, 2003 of $1,341.8 million. Substantially all of Cablecom’s debt was initially due on April 30, 2003 and had been extended to November 18, 2003. During the first four months of 2003, the Company was required to accrete Cablecom’s outstanding debt back to its full face value at its original maturity date (April 30, 2003). Therefore, during 2003, the Company charged interest expense for approximately $1,341.8 million to reflect the accreted value of the Cablecom debt at April 30, 2003. Interest expense for the nine months ended September 30, 2002 totaled $132.7 million. This compares to the current year’s interest expense of $65.6 million (prior to the accretion of the Cablecom debt to its face value, as discussed above and the effects of FASB No. 150). This reduction primarily reflects the interest expense recorded during 2002 on the Predecessor Company’s outstanding publicly traded notes which were subsequently cancelled (along with the outstanding interest payment obligations) upon the effective date of the bankruptcy plan and the reduction in 2003 in Cablecom’s interest expense due to the terms and conditions of its restructuring plan.

			Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
Contractual Obligations	Total
	(dollars in millions)
Long-Term Debt	$	2,809.3	$	2,809.3	$	—	$	—	$	—
Capital Lease Obligations		—		—		—		—		—
Operating Leases		33.8		5.0		11.5		10.8		6.5
Unconditional Purchase Obligations		91.4		34.6		25.7		3.0		28.1
Other Long-Term Obligations		—		—		—		—		—
Total Contractual Cash Obligations	$	2,934.5	$	2,848.9	$	37.2	$	13.8	$	34.6

Share of losses from equity investments totaled $1.8 million for the first nine months of 2003, as compared to $168.1 million for the comparable 2002 period. The losses during 2002 primarily related to

~~The following table includes~~40 ~~aggregate information about our commercial commitments as of June 30, 2003.~~ ~~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 June 30, 2003.~~

Other Commercial Commitments	Total Amounts Committed		Less than 1 Year		1-3 Years		4-5 Years		Over 5 Years
	(dollars in millions)
Guarantees	$	—	$	—	$	—	$	—	$	—
Lines of Credit		—		—		—		—		—
Standby Letters of Credit		—		—		—		—		—
Standby Repurchase Obligations		—		—		—		—		—
Other Commercial Commitments		24.8		3.3		16.5		5.0		—
Total Commercial Commitments	$	24.8	$	3.3	$	16.5	$	45.0	$	—

~~Recent~~the ~~Accounting~~Predecessor ~~Pronouncements~~Company’s investments in iesy, B2 and Noos, which were substantially written off by December 31, 2002.

In Foreign ~~May~~currency ~~2003,~~transaction ~~the~~gains ~~Financial~~were ~~Accounting Standards Board (“FASB”) issued SFAS No~~$1.2 million ~~150, “Accounting~~ for ~~Certain~~the ~~Financial~~nine ~~Instruments~~months ended ~~with~~September 30, ~~Characteristics~~2003 ~~of both Liabilities and Equity”. SFAS No. 150 establishes standards for classifying and measuring~~ as ~~liabilities~~compared ~~certain~~to ~~financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity~~$6.9 million ~~SFAS No. 150 represents a significant change~~ in ~~practice in the accounting for a number of financial instruments, including mandatorily redeemable equity instruments~~2002. The ~~Company~~change is primarily ~~has~~due ~~evaluated~~to ~~its 10% mandatorily redeemable preferred stock and determined that it meets~~ the ~~definition~~effect of achanges ~~liability as set forth~~ in ~~SFAS~~exchange ~~No.~~rates ~~150 because it is mandatorily redeemable~~ on areceivables denominated ~~fixed~~in ~~date~~non-U.S. ~~Accordingly,~~dollar ascurrencies ofheld ~~July~~by 1,subsidiaries ~~2003,~~whose ~~the Company will record the mandatorily~~functional currency ~~redeemable~~is ~~preferred stock as debt, and accrete as interest expense~~ the ~~difference~~U.S. ~~between such amount and the amount that will be payable on the redemption date, January 10, 2023~~dollar.

In There ~~April~~were ~~2003,~~no ~~the~~charges ~~FASB~~for ~~issued~~recapitalization ~~Statement of Financial Accounting Standards (“SFAS”) No. 149~~items, ~~“Amendment~~net ofduring ~~Statement~~the ~~133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments,~~first nine ~~including~~months ~~certain~~of ~~derivative~~the ~~instruments~~current ~~embedded in other contracts and for hedging activities under SFAS No. 133~~year, ~~“Accounting~~versus ~~for~~charges ~~Derivative~~of ~~Instruments and Hedging Activities~~$11.”6 million ~~This statement is effective~~ for ~~contracts entered into or modified after June 30, 2003. The adoption of~~the comparable ~~this~~period ~~statement~~in ~~is not expected to have a significant effect on~~ the ~~results~~prior ~~of operations, financial condition or cash flows of the Company~~year.

In We ~~January~~reported ~~2003,~~an ~~the~~income ~~FASB~~tax ~~issued~~provision ~~FASB~~of ~~Interpretation No~~$1.4 million 46for the first nine months of 2003, ~~“Consolidation~~versus a tax benefit of ~~Variable~~$40.2 million ~~Interest~~for ~~Entities”~~the ~~(“FIN~~nine ~~46”)~~months ended September 30, ~~which~~2002. ~~requires~~This ~~variable~~change ~~interest~~is ~~entities~~primarily attributable to bea ~~consolidated~~reduction in by the ~~primary~~amount ~~beneficiary~~ of ~~the~~tax ~~entity~~benefit ifrecognized ~~certain~~for ~~criteria~~the ~~are~~current ~~met.~~year ~~FIN~~losses, 46to isthe extent ~~effective~~such ~~immediately~~losses ~~for~~would ~~all~~ not ~~new~~reduce ~~variable~~existing deferred tax liabilities.

42 Loss from discontinued operations totaled $1,174.8 million (net of income tax benefits of $29.1 million) for the first nine months of 2002. Losses from discontinued operations included NTL Communications Corp. and subsidiaries, NTL Australia and Rediffusion (a subsidiary of Cablecom).

~~Back~~Liquidity toand ~~Index~~Capital Resources

~~interest~~ We ~~entities~~emerged ~~created~~from orbankruptcy ~~acquired~~on ~~after~~ January 31 10, 2003., ~~For~~at ~~variable~~which ~~interest~~time, ~~entities~~as ~~created~~part orof the ~~acquired~~reorganization ~~prior~~plan, toall ~~February~~of 1our secured debt, ~~2003~~common stock and preferred stock was cancelled and new common stock and Preferred Stock was issued. Further, upon the ~~provisions~~consummation of ~~FIN~~the 46reorganization ~~will~~plan ~~become~~(after ~~effective~~taking ~~for~~into account the ~~Company~~redemption ~~during~~for ~~the~~cash ~~third~~of ~~quarter~~$25 million of ~~2003.~~our ~~The~~Preferred ~~Company~~stock), iswe ~~presently~~had approximately ~~evaluating~~$63 million ~~whether~~in itcash ~~will~~and beour subsidiaries (other than Cablecom) had ~~required~~an toadditional ~~consolidate~~amount ~~from~~of ~~July~~approximately 1,$11 million ~~2003~~in ~~any~~cash. As of ~~its~~September 30, ~~unconsolidated~~2003, ~~affiliates~~we ~~presently~~had ~~accounted~~approximately ~~for~~$55.0 million ~~using~~in ~~the~~cash ~~equity~~and ~~method~~our assubsidiaries (other athan ~~result~~Cablecom) ofhad ~~the~~an ~~effectiveness~~additional amount of ~~FIN~~approximately $9.7 46million in cash.

In We ~~November~~are ~~2002,~~primarily a holding company for the ~~Emerging~~stock ~~Issues~~of ~~Task~~our ~~Force~~subsidiaries, ~~reached~~with no amaterial ~~consensus~~independent onsource ~~EITF~~of Nocash proceeds. ~~00-21~~During the next 12 months, ~~“Revenue~~we do ~~Arrangements~~not ~~with~~anticipate ~~Multiple~~receiving ~~Deliverables”~~any ~~(“EITF~~material ~~00-21”).~~cash ~~EITF~~proceeds ~~00-21~~from ~~provides~~our ~~guidance~~subsidiaries’ operating onactivities. ~~how~~Accordingly, we expect to ~~account~~fund ~~for~~our ~~arrangements~~operations ~~that~~primarily out ~~involve~~of ~~the~~our ~~delivery~~cash orof ~~performance~~approximately $55.0 million as of ~~multiple~~September 30, 2003 ($17.2 million ~~products,~~of ~~services~~which ~~and/or~~was ~~rights~~paid toas ~~use~~a ~~assets.~~dividend ~~The~~on ~~provisions~~our ofPreferred ~~EITF~~Stock ~~00-21~~on ~~will~~October 15, 2003) ~~apply~~and toour ~~revenue~~subsidiaries’ <

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