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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-55288

PROSPECTUS

OFFER TO EXCHANGE
NTL COMMUNICATIONS CORP.

12 3/8% SENIOR NOTES DUE 2008
[NTL LOGO]

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We are offering to exchange an aggregate principal amount of up to
E300,000,000 of our new 12 3/8% senior notes due 2008, which have been
registered under the Securities Act of 1933, for a like amount of our old
12 3/8% senior notes due 2008.
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- The exchange offer expires at 5:00 p.m., New York City time, on July 18,
2001, unless we extend it.

- We will apply to list the new notes on the Luxembourg Stock Exchange in
accordance with the Luxembourg Stock Exchange Rules.

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF RISK FACTORS
THAT YOU SHOULD CONSIDER BEFORE DECIDING TO TENDER YOUR OLD NOTES.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

The date of this prospectus is June 18, 2001.
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Until September 16, 2001, which is 90 days after the date of this
prospectus, if you are a dealer effecting transactions in the new notes, whether
or not you participate in the exchange offer, you may be required to deliver a
prospectus. This obligation is in addition to your obligation if you are a
dealer to deliver a prospectus when acting as an underwriter and with respect to
any unsold allotments or subscriptions.

------------------------

In this prospectus, "NTL," the "company," "we," "us" and "our" refer to NTL
Communications Corp. and its consolidated subsidiaries except where we expressly
state that we are only referring to NTL Communications Corp.

We confirm that the information contained in this prospectus in relation to
our company and our subsidiaries and the notes is true and accurate in all
material respects and is not misleading in any material respect. Any opinions
expressed in this prospectus on the part of our company are honestly held or
made and this prospectus does not omit to state any material fact necessary to
make such information and opinions (in such context) not misleading in any
material respect. All proper enquiries have been made to ascertain and to verify
that information. We accept responsibility for the information contained in this
document accordingly.

You should rely only on the information contained in this prospectus. We
have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer of the new notes in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations
and prospects may have changed since that date.

This prospectus incorporates important business and financial information
about NTL that is not included in or delivered with this prospectus. We will
provide you without charge on your request, a copy of any or all documents which
are incorporated by reference to this prospectus, except for exhibits which are
specifically incorporated by reference into those documents. You should make
your request in writing or by telephone to: NTL Communications Corp., 110 East
59th Street, 26th Floor, New York, NY 10022, Attention: Richard J. Lubasch, Tel:
(212) 906-8440.

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EXPLANATORY NOTE REGARDING CORPORATE STRUCTURE OF NTL

The NTL group of companies has been restructured over the past three years.
The following chart depicts the summary corporate structure of the NTL group and
the position of NTL Communications Corp. within that group:

[NTL'S SUMMARY CORP. STRUCTURE GRAPHIC]

NTL Incorporated and NTL (Delaware), Inc. have no obligations under the old
notes or the new notes to be issued in exchange for the old notes.

NTL Incorporated, a Delaware corporation, was incorporated in December
1999, to effect a reorganization into a holding company structure under Section
251(g) of the Delaware General Corporation Law. The holding company structure,
which was implemented in May 2000 in connection with the acquisition of the
residential assets of Cable & Wireless Communications plc, was accomplished
through a merger. The stockholders of NTL (Delaware), Inc. (formerly NTL
Incorporated) ("NTL Delaware"), at the effective time of the merger became
stockholders of the new holding company, and NTL Delaware became a subsidiary of
the new holding company. The new holding company then took the name NTL
Incorporated.

NTL Delaware was incorporated in February 1999 to effect a reorganization
into a holding company structure under section 251(g) of the Delaware General
Corporation Law. The holding company structure, which was implemented in April
1999 to pursue opportunities outside the United Kingdom and Ireland, was
accomplished through a merger. The stockholders of NTL Communications Corp.
(formerly NTL Incorporated) ("NTL Communications"), at the effective time of the
merger, became stockholders of the new holding company, and we, NTL
Communications, became a subsidiary of the new holding company. The new holding
company then took the name NTL Incorporated.

NTL Group Limited, a wholly-owned subsidiary of NTL which was acquired in
1996, has a 30-year history in the United Kingdom as a provider of
communications services. NTL conducts its operations through direct and indirect
wholly-owned subsidiaries.

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On February 21, 2001, as required by our bank credit agreements, NTL
Incorporated contributed the residential broadband and business cable operations
of Cable & Wireless Communications to NTL Communications and NTL Delaware
contributed the assets of NTL Business (formerly Workplace Technologies plc) to
NTL Communications.

Our principal executive office is located at 110 East 59th Street, New
York, New York 10022 and our telephone number is (212) 906-8440. Our world wide
web address is www.ntl.com. The information on our website is not incorporated
by reference into this registration statement and prospectus.

PRESENTATION OF INFORMATION

References to "pounds sterling," "L," "pence" or "p" are to the lawful
currency of the United Kingdom and references to "U.S. dollars," "dollars," "$"
or "(cent)" are to the lawful currency of the United States. Solely for your
convenience, this prospectus contains translations of some foreign currency
amounts into U.S. dollars and some U.S. dollar amounts into foreign currencies.
We are not making any representation to you regarding those translated amounts.
Unless we otherwise indicate, the translations of foreign currencies into U.S.
dollars and U.S. dollars into foreign currencies have been made at $1.4190 per
L1.00 and $0.8794 per E1.00, the noon buying rate in the City of New York for
cable transfers as certified for customs purposes by the Federal Reserve Bank of
New York on March 31, 2001, provided, however, that amounts associated with
acquisitions and dispositions have been translated at the noon buying rate on
the closing date of the transaction. On June 7, 2001, the noon buying rate was
$1.3900 per L1.00 and $0.8506 per E1.00.

Before January 1, 1999, the pound sterling was a part of the European
Monetary System exchange rate mechanism known as the EMS. Within the EMS,
exchange rates fluctuated within permitted margins, fixed by central bank
intervention. In accordance with the provisions of the Treaty on European Union
negotiated at Maastricht in 1991 and signed by the then 12 member states of the
European Union in early 1992, a European Monetary Union, known as the EMU,
superseded the EMS on January 1, 1999 and the Euro was introduced as the single
European currency. Since that date, the Euro has been the lawful currency of the
EMU states. The following 11 member states participate in the EMU and have
adopted the Euro as their national currency: Austria, Belgium, Finland, France,
Germany, the Republic of Ireland, Italy, Luxembourg, The Netherlands, Portugal
and Spain.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in, or incorporated
by reference in, this prospectus. This summary does not contain all of the
information that may be important to you. You should read the entire prospectus
carefully, including the documents incorporated by reference, before making a
decision to exchange your old notes.

ABOUT NTL

NTL Communications is one of the leading broadband communications and
broadband services companies in the United Kingdom and the Republic of Ireland.

Our predominant lines of business are:

- CONSUMER SERVICES, including residential telephony, cable television,
Internet access and interactive services;

- BUSINESS SERVICES, including business telephony, national and
international carrier telecommunications, Internet services and satellite
communications services; and

- BROADCAST TRANSMISSION AND TOWER SERVICES, including digital and analog
television and radio broadcasting, wireless network management, tower and
site leasing and satellite distribution services.

The businesses in which we operate are growing rapidly as the result of the
increased demand for communication services resulting from technological
developments and the resulting increase in demand for bandwidth and information
handling capacity. In particular, we believe that the integration of
communication services and the Internet, as well as the development of digital
wireless communication services provide us with numerous growth opportunities.

We believe that our success to date has been due largely to our focus on
customer service and the development of services that emphasize value rather
than simply low prices. Our product offerings incorporate our fundamental
customer proposition of providing our customers with a full range of choices.

We provide our broad range of services over local, national and
international network infrastructure. This network infrastructure consists of:

- BROADBAND COMMUNICATIONS NETWORKS in the United Kingdom that currently
pass approximately 8.4 million homes and which we plan to expand to cover
nearly 11.4 million homes in our regional U.K. franchise areas. These
high-capacity two-way local broadband fiber networks serve entire
communities throughout these regional franchise areas. Our fiber optic
cables pass nearly every business and are connected to distribution
points, or nodes, which are typically within approximately 500 meters of
each of the 500 homes typically served by each node. Each home is then
connected by a siamese cable consisting of two copper pair telephone
wires and a coaxial cable, allowing us to deliver telephone, cable
television and Internet services over a single integrated network. This
siamese cable also allows us to deploy both cable modems and digital
subscriber line technology for the provision of broadband communications
services.

Additionally, we have a broadband cable network in the Republic of Ireland that
currently passes approximately 419,400 homes. This primarily analog cable
television network is in the process of being upgraded to allow for higher
capacity signals and a suite of new products including digital television, cable
modem Internet access and voice telephony.

- A NATIONAL/INTERNATIONAL SYNCHRONOUS DIGITAL HIERARCHY (KNOWN AS SDH)
FIBER OPTIC TELECOMMUNICATIONS NETWORK in the United Kingdom which
connects all of the major population centers in the United Kingdom to
Ireland, continental Europe and the United States. SDH allows high speed
data transmission and redirects transmissions in the event of a problem
to prevent disruption. This 7,800 kilometer backbone network utilizes
Asynchronous Transfer Mode, known as ATM, technology, a high-speed
high-bandwidth technology, and was built with sufficient duct capacity to
accommodate over

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2,300 fibers on the majority of the network. We designed this network to
allow us to place the active components, such as routing devices, at the
edge of our network and close to our customers. This design should create
an opportunity to reduce our costs while increasing our ability to offer
a broad range of voice and data solutions.

- A NATIONAL BROADCAST TRANSMISSION AND TOWER NETWORK INFRASTRUCTURE in the
United Kingdom, which provides national, regional and local broadcast and
wireless communications coverage and is comprised of over 2,875 tower
sites in the United Kingdom. Our fixed line and tower networks in the
United Kingdom are interconnected at numerous sites.

Our objective is to exploit the convergence of the telecommunications,
entertainment and information services industries to become the leading full
service broadband communications company in the markets in which we operate. We
believe that we will be able to deliver our strategy through our entrepreneurial
approach, innovative marketing, state-of-the-art networks and technical
excellence.

RECENT DEVELOPMENTS

IT SERVICES OUTSOURCING DEAL WITH IBM

On May 24, 2001, NTL Incorporated announced that it had signed a new
strategic outsourcing agreement with IBM. Under the agreement, IBM will provide
IT services for all of our operations in the United Kingdom and Ireland through
2012. We intend to retain control of our IT activities that are fundamental to
our competitive advantage and key to the development of our intellectual
property. We believe that this strategic alliance with IBM will create a
significant competitive advantage through the delivery of state-of-the-art
technology and a menu of support services. We further believe this alliance will
generate cost savings in excess of $450.0 million over the life of the
agreement, and will allow us flexibility to size our IT needs and resources to
generate further cost savings and create further competitive advantages over
time. With immediate effect, 483 of our IT employees will transfer from NTL to
IBM to coincide with the start of the service under the agreement.

ISSUANCE OF 6 3/4% CONVERTIBLE SENIOR NOTES DUE 2008

In May 2001, we issued $1,150.0 million principal amount of 6 3/4%
convertible senior notes due 2008. Interest is payable semiannually in cash at
the rate of 6 3/4% per annum beginning on November 15, 2001. The holders may
convert these notes into shares of NTL Incorporated common stock at any time
after August 13, 2001, at an initial conversion price of $32.728 per share,
subject to adjustments. These convertible notes are redeemable by us and NTL
Incorporated at any time after May 20, 2004. NTL Incorporated is a co-obligor of
these notes on a subordinated basis.

GE CAPITAL FINANCING

On April 27, 2001, NTL Incorporated announced that it had received a
commitment from a unit of GE Capital for $388 million in financing. Subject to
definitive documentation and customary closing conditions, GE Capital will
provide L200 million ($288.0 million) of this commitment through an increase to
the L2,500 million revolving credit facility of NTL Communications Limited, our
wholly-owned indirect subsidiary, which was fully drawn as of March 31, 2001.
This increase is also subject to the consent of existing lenders under the
credit facility. The remaining $100 million in financing will be in the form of
5.75% convertible notes which will be co-obligations of NTL Incorporated and NTL
(Delaware), Inc., convertible into NTL Incorporated common stock at a conversion
price of $35.00 per share. We intend to use approximately half of the proceeds
of the total commitment to repay outstanding amounts under the L2,500 million
credit facility and the remainder for construction, capital expenditure and
general corporate purposes.

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THE EXCHANGE OFFER

Notes offered.............. We are offering up to E300,000,000 principal amount
of new 12 3/8% senior notes due 2008.

The new notes have been registered under the
Securities Act.

The exchange offer......... We are offering to issue the new notes in exchange
for a like principal amount of your old notes. For
procedures for tendering, see "The Exchange Offer."

Tenders, expiration date;
withdrawal............... The exchange offer will expire at 5:00 p.m. New
York City time on July 18, 2001 unless we extend
it. If you decide to tender your old notes in the
exchange offer, you may withdraw them at any time
before July 18, 2001. If we decide for any reason
not to accept any old note for exchange, it will be
returned without expense to you promptly after the
end of the exchange offer.

United States federal
income tax consequences.... Your exchange of old notes for new notes in the
exchange offer will not result in any income, gain
or loss to you for federal income tax purposes. See
"Federal Income Tax Considerations."

Use of proceeds............ We will not receive any proceeds from the exchange
pursuant to the exchange offer.

Exchange agent............. The Chase Manhattan Bank, through its offices
specified in this prospectus in New York and
Luxembourg, is acting as the exchange agent for the
exchange offer. See "The Exchange Offer -- Exchange
agent" and the inside back cover of this prospectus
for the location of the offices of the exchange
agent.

CONSEQUENCES OF EXCHANGING OLD NOTES IN THE EXCHANGE OFFER

The following summary is based on interpretations by the staff of the
Securities and Exchange Commission in no action letters issued to third parties.
Unless you are an affiliate of NTL, generally if you exchange your old notes for
new notes in the exchange offer you may offer those new notes for resale, resell
those new notes, and otherwise transfer those new notes without compliance with
the registration and prospectus delivery provisions of the Securities Act of
1933. However, those new notes must have been acquired by you in the ordinary
course of your business. In addition, unless you are a broker-dealer, you must
not engage in, intend to engage in or have any arrangement or understanding with
any person to participate in, a distribution of new notes.

If you do not exchange your old notes for new notes in the exchange offer,
your old notes will continue to be subject to provisions of the indenture under
which they were issued regarding transfer and exchange of the old notes and the
restrictions on transfer contained in the legend on the old notes. See "Risk
Factors -- If you do not exchange your old notes for new notes, you will
continue to hold notes subject to restrictions on transfer and which are not
freely tradable", "The Exchange Offer" and "Registration Rights."

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SUMMARY DESCRIPTION OF THE NEW NOTES

The terms of the new notes and the old notes are identical in all material
respects, except for:

(1) the transfer restrictions and registration rights relating to the old
notes, and

(2) provisions under the registration rights agreements providing for
special interest on the old notes under circumstances relating to
timing of the exchange offer, which will terminate on completion of
the exchange offer.

Issuer..................... NTL Communications Corp.

Notes offered.............. E300.0 million in principal amount of 12 3/8%
senior notes due 2008.

Maturity................... The notes mature on February 1, 2008.

Issue price................ The issue price for the E100.0 million in principal
amount of notes issued on February 8, 2001 was
101%, plus accrued interest. The issue price for
the E200.0 million in principal amount of notes
issued on January 24, 2001 was 100%.

Yield and interest......... The notes will accrue interest at a rate of 12 3/8%
per year and will be payable in cash, semi-annually
in arrears, on February 1 and August 1, commencing
August 1, 2001.

Ranking.................... These notes are senior debts. They rank ahead of
all of our subordinated indebtedness and rank equal
in right of payment with all of our existing and
future senior debts.

Assuming we had completed the issuance of our
6 3/4% convertible senior notes due 2010 and
applied the proceeds on March 31, 2001, these
notes:

- would have ranked equally with approximately $6.0
billion of NTL Communication Corp.'s senior
debts, and
- would have ranked senior in right of payment to
approximately $0.5 billion of NTL Communication
Corp.'s subordinated indebtedness.

In addition, the notes will effectively rank behind
all existing and future indebtedness and other
liabilities and commitments of our subsidiaries. On
March 31, 2001 the total liabilities of our
subsidiaries were approximately $7,540.3 million.

Optional redemption........ The notes may not be redeemed by NTL except in the
limited circumstances described in "Description of
the Notes -- Additional Amounts; Optional Tax
Redemption".

Mandatory offer to
repurchase................. If we experience specific kinds of changes of
control accompanied by a ratings decline or engage
in certain asset sales, we must offer to repurchase
the notes at the redemption prices stated in the
"Description of the Notes" section under the
headings "Change of Control" and "Asset Sale",
respectively.

Basic covenants of
indenture.................. The indenture will, among other things, restrict
our ability and the ability of certain of our
subsidiaries to:

- make restricted payments,

- incur additional indebtedness and issue preferred
stock,

- incur liens,

- pay dividends on stock or repurchase stock,

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- sell all or substantially all of our assets or
merge with or into other companies, and

- engage in certain transactions with affiliates.

These covenants are subject to important
exceptions. For more details, see the "Description
of the Notes" section under the heading "--
Covenants".

Governing law and
judgments.................. The notes and the indenture under which the notes
will be issued will be governed exclusively by the
laws of the State of New York. Under the Judiciary
Law of the State of New York, a judgment or decree
in an action based upon an obligation denominated
in a currency other than U.S. dollars will be made
in the currency of the underlying obligation and
converted into U.S. dollars at the rate of exchange
prevailing on the date of entry of the judgment or
decree.

Trustee, principal paying
agent and registrar........ The Chase Manhattan Bank.

Paying agent and transfer
agent in Luxembourg........ Chase Manhattan Bank Luxembourg S.A.

Listing agent in
Luxembourg................. Banque Internationale a Luxembourg.

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
OF NTL COMMUNICATIONS CORP.

The summary consolidated financial information for NTL Communications Corp.
presented below under the captions "Income Statement Data" for the years ended
December 31, 2000, 1999 and 1998 and "Balance Sheet Data" at December 31, 2000,
was derived from our audited consolidated financial statements. Interim data at
March 31, 2001 and for the three months ended March 31, 2000 and 2001 are
unaudited but include, in the opinion of management, all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of that
data. Results for the three months ended March 31, 2001 are not necessarily
indicative of the results that may be expected for any other interim period or
for the year as a whole. This information should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
prospectus.

Since 1998, we have completed a series of acquisitions:

- In June and September 1998, we purchased ComTel Limited and Telecential
Communications, which we refer to collectively as ComTel, for an aggregate
purchase price of approximately $969.0 million, including intangibles
aggregating approximately $224.0 million.

- In October 1998, we purchased Comcast UK Cable Partners Limited, which is
now known as NTL (Triangle) LLC, for an aggregate purchase price of
approximately $600.0 million, including intangibles of approximately
$130.0 million.

- In December 1998, we purchased Eastern Group Telecoms, or EGT, for an
aggregate purchase price of approximately $151.0 million, including
intangibles of approximately $45.0 million.

- In March 1999, we purchased Diamond Cable Communications plc for an
aggregate purchase price of approximately $984.6 million, including
intangibles of $1,323.0 million.

- In July 1999, we acquired Cablelink Limited for an aggregate purchase
price of $700.5 million, including intangibles of $669.6 million.

- In September 1999, NTL Delaware acquired the shares of Workplace
Technologies plc, which has been renamed NTL Business, for an aggregate
purchase price of $175.0 million, including intangibles of $176.9 million.

- In May 2000, NTL Incorporated acquired ConsumerCo from Cable & Wireless
plc for an aggregate purchase price of $13,111.0 million, including
intangibles of $8,879.0 million.

In February 2001, pursuant to the terms of NTL Business' credit agreement
which was used to partially fund the acquisition of ConsumerCo, NTL Incorporated
contributed all of the outstanding share capital of ConsumerCo to us and NTL
Delaware contributed all of the outstanding share capital of NTL Business to us.

The net assets and results of operations of ComTel, NTL Triangle, EGT,
Diamond, Cablelink, NTL Business and ConsumerCo are included in the consolidated
financial statements from their respective dates of acquisition.

THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- --------------------------------
2001 2000 2000 1999 1998
--------- --------- --------- --------- --------
(IN MILLIONS)

INCOME STATEMENT DATA:
Revenues............................................ $ 770.5 $ 470.9 $2,482.2 $1,537.1 $ 747.0
Operating (loss).................................... (530.9) (173.2) (1,525.2) (611.0) (228.6)
Net (loss).......................................... (835.8) (336.7) (2,388.1) (716.5) (534.6)

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THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- --------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
--------- --------- --------- --------- ------- ------- ------
(IN MILLIONS)

OTHER DATA:
Capital expenditures............. $ 542.0 $ 356.9 $ 1,961.8 $ 1,198.3 $ 772.2 $ 503.7 $505.7
Ratio of earnings to fixed
charges(1)..................... -- -- -- -- -- -- --

MARCH 31, DECEMBER 31,
2001 2000
--------- ------------
(IN MILLIONS)

BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 283.9 $ 423.5
Working capital (deficiency)................................ (845.6) (937.2)
Fixed assets, net........................................... 10,554.6 10,916.8
Total assets................................................ 22,409.5 23,146.5
Long-term debt.............................................. 12,101.2 11,843.4
Shareholder's equity........................................ 8,259.1 9,012.2

- ---------------

(1) For the purposes of calculating the ratio of earnings to fixed charges,
fixed charges consist of interest expense, including capitalized interest,
amortization of fees related to debt financing and rent expense deemed to
be interest. For the three months ended March 31, 2001 and the years ended
December 31, 2000, 1999, 1998, 1997 and 1996, our earnings were
insufficient to cover fixed charges by approximately $858.6 million,
$2,563.1 million, $785.2 million, $535.0 million, $350.9 million and $268.9
million, respectively.

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RISK FACTORS

You should consider carefully all of the information in this prospectus and
incorporated by reference in this prospectus. See "Where You Can Find More
Information About Us." In particular, you should carefully evaluate the
following risks before tendering your old notes in the exchange offer. However,
the risk factors set forth below, other than the first risk factor, are
generally applicable to the old notes as well as the new notes. This prospectus
contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
faced by us described below and elsewhere in this prospectus.

IF YOU DO NOT EXCHANGE YOUR OLD NOTES FOR NEW NOTES, YOU WILL CONTINUE TO HOLD
NOTES SUBJECT TO RESTRICTIONS ON TRANSFER AND WHICH ARE NOT FREELY TRADEABLE

If you do not tender your old notes or you tender your old notes and we do
not accept the tender, your old notes will continue to be subject to their
existing restrictions on transfer and exchange. In general, unless the old notes
are registered under the Securities Act, you cannot offer or sell your old notes
except pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. Except in limited
circumstances which we summarize under "Registration Rights" in this prospectus,
we do not have any obligation to register your old notes under the Securities
Act. We do not expect that we will take any action to register the old notes
under the Securities Act unless we are required to so in those limited
circumstances.

OUR SUBSTANTIAL LEVERAGE COULD ADVERSELY AFFECT THE FINANCIAL HEALTH OF THE
COMPANY

We are and, for the foreseeable future will continue to be, highly
leveraged. On March 31, 2001, the accreted value of our total long-term
indebtedness without giving effect to the issuance in May 2001 of $1,150.0
million of our 6 3/4% convertible senior notes due 2008, was $12,101.2 million.
This debt represents approximately 59.4% of our total capitalization.

The indentures governing our outstanding notes permit us to incur
additional indebtedness to finance our working capital and capital expenditure
requirements, finance the construction of our network and finance the
acquisition of assets, licenses and computer software that are used in
connection with a cable business, as well as entities that are engaged in the
cable business.

Our substantial indebtedness could adversely affect our financial health
by, among other things:

- increasing our vulnerability to adverse changes in general economic
conditions or increases in prevailing interest rates, particularly if any
of our borrowings are at variable interest rates;

- limiting our ability to obtain the additional financing we need to
operate, develop and expand our business; and

- requiring us to dedicate a substantial portion of our cash flow from
operations to service our debt, which reduces the funds available for
operations and future business opportunities.

Our and our subsidiaries' cash interest payments increased from $103.6
million in the three months ended March 31, 2000 to $186.0 million in the three
months ended March 31, 2001 and from $222.1 million in 1999 to $459.0 million in
2000. Assuming March 31, 2001 floating interest rates remain unchanged, cash
interest payment obligations are expected to exceed $900.0 million in 2001, and
we expect them to continue to increase thereafter, at least through 2002, as a
result of our higher debt levels and as indebtedness previously issued on a
discount basis becomes cash pay. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

IN SOME CIRCUMSTANCES INVOLVING A CHANGE OF CONTROL OF OUR PARENT, WE WILL BE
REQUIRED TO REPURCHASE SOME OF OUR INDEBTEDNESS INCLUDING THE NOTES -- IF THIS
OCCURS, WE MAY NOT HAVE THE FINANCIAL RESOURCES NECESSARY TO MAKE THOSE
REPURCHASES

We may, under some circumstances involving a change of control of our
parent, be obligated to offer to repurchase outstanding debt securities,
including the notes, before maturity. We cannot assure you that we will
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have available financial resources necessary to repurchase those securities in
those circumstances. If we cannot repurchase those debt securities in the event
of a change of control, the failure to repurchase would constitute an event of
default under the indentures and agreements under which that indebtedness was
incurred and could result in a cross-default under other indebtedness.

THE ANTICIPATED CONSTRUCTION COSTS OF OUR NETWORK WILL INCREASE AS A RESULT OF
OUR RECENT ACQUISITIONS AND WILL REQUIRE SUBSTANTIAL AMOUNTS OF ADDITIONAL
FUNDING -- THAT ADDITIONAL FUNDING MAY NOT BE AVAILABLE ON REASONABLE TERMS OR
AT ALL

As a result of our recent acquisitions, our capital expenses and cost of
operations for the development, construction and operation of our combined
telecommunications networks will significantly increase. We estimate that
significant amounts of additional funding will be necessary to meet these
capital expenditure requirements.

We cannot be certain that:

- we will be able to obtain additional financing with acceptable terms,

- actual construction costs will meet our expectations,

- we will satisfy conditions precedent to advances under existing and any
future credit facilities,

- we will not acquire additional businesses that require additional
capital,

- we will be able to generate sufficient cash from operations to meet
capital requirements, debt service and other obligations when required,
or

- we will be able to withstand exposure to exchange and interest rate
fluctuations.

We do not have any firm additional financing plans to address the factors
listed above, and our L2.5 billion credit agreement restricts our and our
subsidiaries, ability to incur additional debt.

Both the equity and debt capital markets have recently experienced periods
of significant volatility, particularly for securities issued by
telecommunications and technology companies. The ability of telecommunications
companies to access those markets as well as their ability to obtain financing
provided by bank lenders and equipment suppliers has become more restricted and
financing costs have increased. During some recent periods, the capital markets
have been largely unavailable to new issues of securities by telecommunications
companies. We have historically relied on issuances of high-yield debt
securities, and convertible debt securities to meet our financing requirements.
We cannot be certain that financing will be available to us when it is required
on reasonable terms or at all.

WE WILL REQUIRE ADDITIONAL FINANCING BECAUSE WE DO NOT EXPECT TO GENERATE
SUFFICIENT CASH FLOW TO REPAY AT MATURITY THE ENTIRE PRINCIPAL AMOUNT OF OUR
OUTSTANDING INDEBTEDNESS

We anticipate that we will not generate sufficient cash flow from
operations to repay at maturity the entire principal amount of our outstanding
indebtedness. Some of the measures we may take to refinance our debt include:

- refinancing all or portions of that indebtedness,

- seeking modifications to the terms of that indebtedness, and

- seeking additional debt financing, which may require us to obtain the
consent of some of our lenders.

We cannot be certain that we will succeed in executing any of these
measures or that financing will be available on reasonable terms or at all.

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WE CANNOT BE CERTAIN THAT WE WILL BE SUCCESSFUL IN INTEGRATING ACQUIRED
BUSINESSES INTO OURS, OR THAT WE WILL REALIZE THE BENEFITS WE ANTICIPATE FROM
ANY ACQUISITION

We will continue to consider strategic acquisitions and combinations that
involve operators or owners of licenses to operate cable, telephone, television
or telecommunications systems or services and related businesses. If
consummated, some of these transactions would significantly alter our holdings
and might require us to incur substantial indebtedness. We cannot assure you
that, with respect to our recent acquisitions, as well as future acquisitions,
if they occur, that we will:

- realize any anticipated benefits,

- successfully integrate the acquired businesses with our operations, or

- manage that integration without adversely affecting us.

Prior to our acquisition of ConsumerCo in May 2000, it was losing customers
on a quarterly basis. Since the acquisition, we have focused on reducing the
fault rate, improving the installation experience, continuing the digital
rollout and improving the value proposition of the service bundle. This will
cause our costs to increase in the near term.

WE ARE A HOLDING COMPANY THAT IS DEPENDENT UPON CASH FLOW FROM OUR SUBSIDIARIES
TO MEET OUR OBLIGATIONS -- OUR ABILITY TO ACCESS THAT CASH FLOW MAY BE LIMITED
IN SOME CIRCUMSTANCES

We are a holding company with no independent operations or significant
assets other than our investments in and advances to our subsidiaries and
affiliated joint ventures. We depend upon the receipt of sufficient funds from
our subsidiaries and affiliated joint ventures to meet our obligations. The
terms of existing and future indebtedness of our subsidiaries and the laws of
the jurisdictions under which those subsidiaries are organized generally limit
the payment of dividends, loan repayments and other distributions to us, subject
in some cases to exceptions that allow them to service indebtedness in the
absence of specified defaults.

Your right to receive payments on or in respect of the notes could be
adversely affected in the event of a bankruptcy of any of our subsidiaries.
Following the liquidation of one of our subsidiaries or joint ventures, the
creditors of that subsidiary or joint venture will generally be entitled to be
paid in full before we are entitled to a distribution of any assets in the
liquidation. On March 31, 2001, the total liabilities of our subsidiaries were
approximately $7,540.3 million.

WE HAVE HISTORICALLY INCURRED LOSSES AND GENERATED NEGATIVE CASH FLOWS AND
CANNOT ASSURE YOU THAT WE WILL BE PROFITABLE IN THE FUTURE

Construction and operating expenditures have resulted in negative cash
flow, which we expect will continue at least until we establish an adequate
customer base. We also expect to incur substantial additional losses. We cannot
be certain that we will achieve or sustain profitability in the future. Failure
to achieve profitability could diminish our ability to sustain operations and
obtain additional required funds. In addition, a failure to achieve or sustain
profitability would adversely affect our ability to make required payments on
our indebtedness, including payments associated with the notes.

We had net losses for the three months ended March 31, 2001 of $835.8
million, and for the years ended December 31:

- 2000: $2,388.1 million

- 1999: $716.5 million

- 1998: $534.6 million

- 1997: $333.1 million

- 1996: $254.5 million

As of March 31, 2001, our accumulated deficit was $5,191.0 million.

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In the three months ended March 31, 2001 and in the year 2000, although
EBITDA was positive, we had negative cash flow from operations of $160.3 million
and $170.3 million, respectively.

WE HAVE HISTORICALLY HAD A DEFICIENCY OF EARNINGS TO FIXED CHARGES AND OUR
EARNINGS IN THE FUTURE MAY NOT BE SUFFICIENT TO COVER THOSE FIXED CHARGES,
INCLUDING OUR OBLIGATIONS ASSOCIATED WITH THE NOTES.

For the three months ended March 31, 2001 and the years ended December 31,
2000, 1999, 1998, 1997 and 1996, our earnings were insufficient to cover fixed
charges by approximately $858.6 million, $2,563.1 million, $785.2 million,
$535.0 million, $350.9 million and $268.9 million, respectively. Fixed charges
consist of interest expense, including capitalized interest, amortization of
fees related to debt financing and rent expense deemed to be interest. Our
earnings in the future may not be sufficient to cover those fixed charges,
including our obligations on the notes.

WE HAVE DISTRIBUTED FUNDS TO OUR PARENT NTL DELAWARE IN THE PAST AND MAY DO SO
IN THE FUTURE

Under our existing indentures, we are permitted, and under the indenture
for these notes we will be permitted, to dividend or distribute funds up to
specified limits to NTL Delaware, our parent. In April 1999, we distributed
$500.0 million to NTL Delaware to finance NTL Delaware's purchase of the
Australian National Transmission Network for approximately $425.8 million,
including related expenses, and its purchase of the "1G Networks" in France for
approximately $59.0 million. NTL Delaware may, but is not required to,
recontribute those funds to us. Any dividends and distributions, to the extent
permitted, may be made at other times for other purposes. Completion of the
contribution of ConsumerCo and NTL Business has substantially increased the
amount available for distribution under the existing indentures and the
indenture for the notes.

ALTHOUGH WE MAY, SUBJECT TO THE LIMITATIONS UNDER OUR INDENTURES, CONTRIBUTE
CASH TO NTL DELAWARE TO FINANCE CERTAIN ACQUISITIONS, THE CASH FLOW GENERATED
FROM OPERATIONS AT OUR PARENT WILL NOT BE AVAILABLE TO SERVICE OUR OBLIGATIONS
UNDER THE NOTES

Neither NTL Incorporated nor NTL Delaware will guarantee the notes.
Consequently, any cash flow generated by assets located at, or acquired by, NTL
Incorporated, NTL Delaware or any of their subsidiaries which are not our
subsidiaries, will not be available to service our obligations under the notes
unless contributed or otherwise distributed to us.

WE ARE SUBJECT TO SIGNIFICANT COMPETITION IN EACH OF OUR BUSINESS AREAS AND WE
EXPECT THAT COMPETITION TO INTENSIFY -- IF WE ARE UNABLE TO COMPETE
SUCCESSFULLY, OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE
ADVERSELY AFFECTED

We face significant competition from established and new competitors in
each of our businesses. As existing technology develops and new technologies
emerge, we believe that competition will intensify in each of our business
areas, particularly business telecommunications and the Internet. Some of our
competitors have substantially greater financial and technical resources than we
do. If we are unable to compete successfully, our business, financial condition
and results of operations could be adversely affected.

OUR PRINCIPAL BUSINESSES ARE SUBJECT TO GOVERNMENT REGULATION, INCLUDING PRICING
REGULATION, WHICH MAY CHANGE AND ADVERSELY AFFECT US

Our principal business activities in the United Kingdom and Ireland are
regulated and supervised by various governmental bodies. Changes in laws,
regulations or governmental policy or the interpretations of those laws or
regulations affecting our activities and those of our competitors, such as
licensing requirements, pricing regulation and deregulation of interconnection
arrangements, could have a material adverse effect on us.

We are also subject to regulatory initiatives of the European Commission.
Changes in EU Directives may reduce our range of programming and increase the
costs of purchasing television programming or require us to provide access to
our cable network infrastructure to other service providers, which could have a
material adverse effect on us.

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OUR BROADCAST SERVICES BUSINESS IS DEPENDENT UPON SITE SHARING ARRANGEMENTS WITH
OUR PRINCIPAL COMPETITOR

As a result of, among other factors, a natural shortage of potential
transmission sites and the difficulties in obtaining planning permission for
erection of further masts, we have arranged with Crown Castle U.K. Ltd. to share
a large number of tower sites. We cannot assure you that the site sharing
arrangements will not be terminated. Termination of the site sharing
arrangements would have a material adverse effect on us.

Under the present arrangements, one of the parties is the owner, lessor or
licensor of each site and the other party is entitled to request a license to
use specified facilities at that site. Each site license granted pursuant to the
site sharing agreement is for an initial period expiring on December 31, 2005,
subject to title to the site and to the continuation in force of the site
sharing agreement. Each site sharing agreement provides that, if requested by
the sharing party, it will be extended for further periods. Either party may
terminate the agreement by giving 5 years' notice in writing to the other prior
to December 31, 2005, or at any date which is a date 10 years or a multiple of
10 years after December 31, 2005.

OUR BROADCAST SERVICES BUSINESS IS DEPENDENT UPON ITV AND OTHER CONTRACTS

Our broadcast services business has contracts for the provision of
television broadcasting transmission services with the ITV companies, Channel
4/S4C and Channel 5. The prices that we may charge these companies for
transmission services in the United Kingdom are subject to regulation by OFTEL.
The contracts with the ITV companies and Channel 4/S4C terminate on December 31,
2002. Although, historically, the ITV companies and Channel 4/S4C have renewed
their contracts with us, we cannot assure you that they will do so upon
expiration of the current contracts, that they will not negotiate terms for
provision of transmission services by us on a basis less favorable to us or that
they would not seek to obtain from third parties a portion of the transmission
services that we currently provide. The loss of any one of these contracts could
have a material adverse effect on us.

FAILURE TO MANAGE OUR GROWTH AND EXPANSION COULD HAVE A MATERIAL ADVERSE EFFECT
ON US

We have experienced rapid growth and development in a relatively short
period, and to meet our strategic objectives will require a continuation of that
growth. Management of that growth will require, among other things:

- stringent control of construction and other costs,

- continued development of our financial and management controls,

- increased marketing activities, and

- training of new personnel.

Failure to manage our rapid growth and development successfully could have
a material adverse effect on us.

WE ARE DEPENDENT UPON A SMALL NUMBER OF KEY PERSONNEL

A small number of key executive officers manage our businesses. The loss of
one or more of these executive officers could have a material adverse effect on
us. We believe that our future success will depend in large part on our
continued ability to attract and retain highly skilled and qualified personnel.
We have not entered into written employment contracts or non-compete agreements
with, nor have we obtained life insurance policies covering, those key executive
officers. Some of our senior managers also serve as members of senior management
of other companies in the telecommunications business which may reduce the
amount of time they are able to dedicate to our business.

THE TELECOMMUNICATIONS INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGES AND WE
CANNOT PREDICT THE EFFECT OF ANY CHANGES ON OUR BUSINESSES

The telecommunications industry is subject to rapid and significant changes
in technology and the effect of technological changes on our businesses cannot
be predicted. The cost of implementation of emerging and future technologies
could be significant, and our ability to fund such implementation may depend on
our ability to

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obtain additional financing. We cannot be certain that we would be successful in
obtaining any additional financing required.

WE ARE SUBJECT TO CURRENCY RISK BECAUSE WE OBTAIN A SUBSTANTIAL AMOUNT OF
FINANCING IN U.S. DOLLARS AND EURO BUT GENERALLY GENERATE REVENUES AND INCUR
EXPENSES IN OTHER CURRENCIES

We encounter currency exchange rate risks because we generate revenues and
incur construction and operating expenses in other currencies, primarily in
pounds sterling, while we pay interest and principal obligations with respect to
most of our existing indebtedness in U.S. dollars and Euro. We cannot assure you
that the hedging transactions we have entered into or any other hedging
transactions we might enter into will be successful or that shifts in the
currency exchange rates will not have a material adverse effect on us. For
example, to the extent that the pound sterling declines in value against the
U.S. dollar and, to a lesser extent, the Euro, and we have not fully hedged
against such declines, the effective cost of servicing our U.S. dollar and Euro
debt will be higher and we will incur currency losses. The decline in the
relative value of the pound sterling against the U.S. dollar in 2000 was
primarily responsible for our 2000 currency losses of $58.1 million.

WE DO NOT INSURE THE UNDERGROUND PORTION OF OUR NETWORK

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

THERE HAS BEEN NO PUBLIC MARKET FOR THE NOTES -- WE CANNOT ASSURE YOU THAT A
LIQUID MARKET WILL DEVELOP FOR THE NOTES

There has been no public market for the notes. We do not intend to seek to
have any of the notes listed or quoted on any securities exchange or automated
quotation system, except for the Luxembourg Stock Exchange. Although the initial
purchasers of the old notes have advised us that they currently intend to make a
market in the notes, they are not obligated to do so and any market making may
be discontinued at any time without notice. As a result, we cannot assure you as
to the ongoing development of a market or the liquidity of any market that may
develop for the notes.

YOU SHOULD BE AWARE THAT ACTUAL RESULTS MAY TURN OUT TO BE MATERIALLY DIFFERENT
FROM ANY FORWARD-LOOKING STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS

This prospectus includes or incorporates by reference projections of
broadcast transmission revenues, build-out results and other forward-looking
statements, including those using words such as "believe," "anticipate,"
"should," "intend," "plan," "will," "expects," "estimates," "projects,"
"positioned," "strategy," and similar expressions. In reviewing information
included or incorporated by reference in this prospectus, keep in mind that
actual results may differ materially from those expressed or implied in those
projections and forward-looking statements. Important assumptions and factors
that could cause actual results to differ materially from those contemplated or
projected, forecast, estimated or budgeted in or expressed or implied by those
projections and forward-looking statements include those specified in this Risk
Factors section, as well as:

- industry trends,

- our ability to

-- continue to design network routes and install facilities,

-- obtain and maintain any required government licenses or
approvals, and

-- finance construction and development,

all in a timely manner, at reasonable costs and on satisfactory terms and
conditions,

- assumptions about

-- customer acceptance,

-- churn rates,
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-- overall market penetration and competition from providers of
alternative services, and

-- availability, terms and deployment of capital.

We assume no obligation to update projections or other forward-looking
statements to reflect actual funding requirements, capital expenditures and
results, changes in assumptions or in the factors affecting these projections or
other forward-looking statements. We cannot assure you that:

- any financings will be obtained when required, on acceptable terms or at
all,

- actual amounts required to complete our planned build out will not exceed
the amount we estimate (see "-- The anticipated construction costs of our
network will increase as a result of our recent acquisitions and will
require substantial amounts of additional funding -- that additional
funding may not be available on reasonable terms or at all") or that
additional financing substantially in excess of that amount will not be
required,

- we will not acquire franchises, licenses or other new businesses that
would require additional capital,

- operating cash flow will meet expectations or that we will be able to
access such cash from our subsidiaries' operations to meet any unfunded
portion of our capital requirements when required or to satisfy the terms
of the notes, or our other debt instruments and agreements for the
incurrence of additional debt financing (see "-- We are a holding company
that is dependent upon cash flow from our subsidiaries to meet our
obligations -- our ability to access that cash flow may be limited in
some circumstances"),

- we will achieve the cost savings expected as a result of the ConsumerCo
acquisition and the integration of several other acquired businesses (see
"Management's Discussion and Analysis of Financial Condition and Results
of Operations of NTL Communications -- Results of Operations"),

- we will not incur losses from exposure to exchange rate fluctuations or
be adversely affected by interest rate fluctuations (see "-- We are
subject to currency risk because we obtain a substantial amount of
financing in U.S. dollars and Euro but generally generate revenues and
incur expenses in other currencies"),

- there will not be adverse changes in applicable United States, United
Kingdom or Republic of Ireland tax laws, or

- the future effects of monetary union in Europe will not be materially
adverse to us.

All forward-looking statements included or incorporated by reference in this
prospectus are expressly qualified by the considerations described above.

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THE EXCHANGE OFFER

TERMS OF THE EXCHANGE; PERIOD FOR TENDERING OLD NOTES

This prospectus and the accompanying letter of transmittal set out the
terms and conditions of the exchange offer. On and subject to those terms and
conditions, we will accept for exchange old notes which are properly tendered on
or before the expiration date and not withdrawn as permitted below. The
expiration date is 5:00 p.m., New York City time, on July 18, 2001. However, if
we, in our sole discretion, extend the period of time for which the exchange
offer is open, the expiration date will be the latest time and date to which we
extend the exchange offer.

This prospectus, together with the letter of transmittal, is first being
sent on or about the date of this prospectus, to all holders of old notes known
to us. Our obligation to accept old notes for exchange under the exchange offer
is subject to the conditions described under "Conditions to the exchange offer"
below.

We expressly reserve the right, at any time or on one or more occasions, to
extend the period of time during which the exchange offer is open, and delay
acceptance for exchange of any old notes, by giving oral or written notice of
the extension to you. During any extension of the exchange offer, all old notes
previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. If we do not accept any old notes tendered for
exchange for any reason they will be returned to you. We will return those notes
without expense to you as promptly as practicable after the end of the exchange
offer.

Old notes tendered in the exchange offer must be in denominations of
principal amount of E1,000 and any whole multiple of E1,000.

We expressly reserve the right to amend or terminate the exchange offer,
and not to accept for exchange any old notes which we have already accepted for
exchange, if any of the conditions of the exchange offer specified below under
"Conditions to the exchange offer" occur. We will give oral or written notice of
any extension, amendment, non-acceptance or termination to you as promptly as
practicable. A notice in the case of any extension will be issued by means of a
press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.

The tender to us of old notes by you and the acceptance of your tender by
us will be a binding agreement between us on the terms and subject to the
conditions set forth in this prospectus and in the accompanying letter of
transmittal in respect of the old notes tendered by you.

PROCEDURES FOR TENDERING OLD NOTES

When we refer to a holder of old notes in this section of the prospectus
relating to the exchange offer, that includes account holders and any
participant in the DTC, Euroclear or Clearstream clearing systems (each, a
"book-entry transfer facility") whose name appears on a security position
listing as the holder of those old notes. Any holder who wishes to tender old
notes for exchange in the exchange offer must transmit the letter of
transmittal, properly completed and duly executed, including all other documents
required by the letter of transmittal or, in the case of a book-entry transfer,
an agent's message instead of a letter of transmittal to The Chase Manhattan
Bank as exchange agent at one of the addresses set forth below under "Exchange
agent", on or before the expiration date.

In addition, either

- certificates for the tendered old notes must be received by the exchange
agent along with the letter of transmittal before the expiration date,

- a timely confirmation of a book-entry transfer of the tendered old
notes, which we refer to as a book-entry confirmation, into the
appropriate exchange agent's account at the appropriate book-entry
transfer facility pursuant to the procedure for book-entry transfer
described below, must be received by the exchange agent before the
expiration date along with the letter of transmittal or an agent's
message instead of a letter of transmittal, or

- the holder must comply with the guaranteed delivery procedures we
describe below.
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An agent's message means a message, transmitted by the book-entry transfer
facility to and received by the exchange agent. An agent's message forms a part
of a book-entry confirmation, which states that the book-entry transfer facility
has received an express acknowledgment from the tendering participant stating
that the participant has received and agrees to be bound by, and make the
representations and warranties contained in, the appropriate letter of
transmittal and that we may enforce such letter of transmittal against the
participant.

The method of delivery of old notes, letters of transmittal and all other
required documents is at your election and risk. If delivery is by mail, we
recommend that you use registered mail, properly insured, with return receipt
requested. In all cases, you should allow sufficient time to assure delivery
before the expiration date. No letters of transmittal or old notes should be
sent to NTL.

Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless

- you have not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on the letter of transmittal or

- the old notes are tendered for the account of an eligible institution,
as we define that term below.

In the event that a signature on a letter of transmittal or a notice of
withdrawal is required to be guaranteed, the guarantee must be by a firm which
is

- a member of a registered national securities exchange,

- a member of the National Association of Securities Dealers, Inc.,

- a commercial bank or trust company having an office or correspondent in
the United States or

- another eligible institution within the meaning of Rule 17(A)(d)-15 of
the Exchange Act.

We refer to each of the institutions in the bullet points above as eligible
institutions. If old notes are registered in the name of a person other than a
signer of the letter of transmittal, the old notes surrendered for exchange must
be endorsed by, or be accompanied by a written instrument or instruments of
transfer, or exchange, in satisfactory form as determined by us in our sole
discretion, duly executed by the registered holder with the signature on those
documents guaranteed by an eligible institution.

All questions as to the validity, form, eligibility, including time of
receipt, and acceptance of old notes tendered for exchange will be determined by
us in our sole discretion. Our determination shall be final and binding. We
reserve the absolute right to reject any and all tenders of any particular old
note not properly tendered or to not accept any particular old note which
acceptance might, in our judgment or the judgment of our counsel, be unlawful.
We also reserve the absolute right to waive any defects or irregularities or
conditions of the exchange offer as to any particular old note either before or
after the expiration date, including the right to waive the ineligibility of any
holder who seeks to tender old notes in the exchange offer.

The interpretation by us of the terms and conditions of the exchange offer
as to any particular old note either before or after the expiration date,
including the letter of transmittal and the instructions to the letter of
transmittal shall be final and binding on all parties. Any defects or
irregularities in connection with tenders of old notes for exchange must be
cured within reasonable period of time determined by us unless we waive those
defects or irregularities. Neither we, the exchange agent nor any other person
shall be under any duty to give you notification of any defect or irregularity
with respect to any tender of old notes by you for exchange, nor shall any of
them incur any liability for failure to give such notification.

If a letter of transmittal is signed by a person or persons other than the
registered holder or holders of old notes, the old notes must be endorsed or
accompanied by appropriate powers of attorney. The old notes or the power of
attorney should be signed exactly as the name or names of the registered holder
or holders that appear on the old notes.

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If a letter of transmittal, any old notes or powers of attorney are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, the
person signing should so indicate when signing and, in addition, proper evidence
satisfactory to us of their authority to so act must be submitted with the
letter of transmittal, unless we waive it.

By tendering old notes, you will represent to us that, among other things,

- the new notes acquired in the exchange offer are being obtained in the
ordinary course of business of the person receiving the new notes,
whether or not that person is the holder,

- that neither the holder nor any other person receiving the new notes has
an arrangement or understanding with any person to participate in the
distribution of the notes and

- that neither the holder nor any other person receiving the new notes is
an affiliate, as defined under Rule 405 of the Securities Act, of NTL.

If you are an affiliate of NTL, are engaged in or intend to engage in or
have any arrangement with any person to participate in the distribution of the
new notes to be acquired pursuant to the exchange offer, you

- cannot rely on the applicable interpretations of the staff of the SEC
and

- must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.

If you are a broker-dealer who holds old notes acquired for your own
account as a result of market-making activities or other trading activities, and
you receive new notes in exchange for those old notes in the exchange offer, you
may be an "underwriter" within the meaning of the Securities Act and must
acknowledge that you will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of the new notes. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, you
will not be deemed to admit that you are an "underwriter" within the meaning of
the Securities Act.

ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES

Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will

- accept, promptly after the expiration date, all old notes properly
tendered,

- issue the new notes promptly after acceptance of the old notes and

- cause the new notes to be authenticated by the trustee.

For purposes of the exchange offer, we shall be deemed to have accepted
properly tendered old notes for exchange when, as and if we have given oral,
promptly confirmed in writing, or written notice of that acceptance to the
exchange agent. For each old note accepted for exchange, the holder of such old
note will receive a new note of the same class having a principal amount equal
to that of the surrendered old note.

If any old notes tendered by you are not accepted for any reason set forth
in the terms and conditions of the exchange offer or if you submitted old notes
for an amount or quantity greater than you desire to exchange, those unaccepted
or non-exchanged old notes will be returned without expense to you. In the case
of old notes tendered by book-entry transfer into the exchange agent's account
at the book-entry transfer facility pursuant to the book-entry procedures
described below, those non-exchanged old notes will be credited to an account
maintained with the book-entry transfer facility as promptly as practicable
after the end of the exchange offer.

BOOK-ENTRY TRANSFER

The exchange agent will request the establishment of accounts with respect
to the old notes at each book-entry transfer facility for purposes of the
exchange offer within two business days after the date of this prospectus unless
the exchange agent already has established an account with the book-entry
transfer facility suitable for the exchange offer. If you are a financial
institution that is a participant in the book-entry transfer facility's system,
you may make book-entry delivery of old notes by causing the book-entry transfer
facility to transfer such old

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notes into the exchange agent's account at the book-entry transfer facility in
accordance with the book-entry transfer facility's procedures for transfer.

Although you may deliver old notes to the exchange agent in the exchange
offer through book-entry transfer at the book-entry transfer facility, the
letter of transmittal or a facsimile of it, with any required signature
guarantees or an agent's message instead and any other required documents, must
be transmitted to and received by the exchange agent at one of the addresses set
forth below under "exchange agent," on or before the expiration date. If this is
not possible, the guaranteed delivery procedures described below must be
complied with.

GUARANTEED DELIVERY PROCEDURES

If you want to tender old notes and your old notes are not immediately
available, or time will not permit your old notes or other required documents to
reach the exchange agent before the expiration date, or you cannot complete the
procedure for book-entry transfer on a timely basis, you may tender your old
notes if

- the tender is made through an eligible institution,

- before the expiration date, the exchange agent received from the
eligible institution the appropriate notice of guaranteed delivery,
substantially in the form provided by us, by telegram, telex, facsimile
transmission, mail or hand delivery, setting forth your name and address
and the amount of old notes tendered, stating that the tender is being
made by that notice. The notice of guaranteed delivery must guarantee
that within three New York Stock Exchange trading days after the date of
execution of the notice of guaranteed delivery, the certificates for all
physically tendered old notes, in proper form for transfer, or a
book-entry confirmation, as the case may be, together with a properly
completed and duly executed letter of transmittal, or facsimile of the
letter of transmittal or agent's message instead, with any required
signature guarantees, and any other documents required by the
appropriate letter of transmittal will be deposited by the eligible
institution with the exchange agent and

- the certificates for all physically tendered old notes, in proper form
for transfer, or a book-entry confirmation, as the case may be, together
with a properly completed and duly executed appropriate letter of
transmittal, or facsimile of the letter of transmittal or agent's
message instead, with any required signature guarantees, and all other
documents required by the letter of transmittal, are received by the
exchange agent within three New York Stock Exchange trading days after
the date of execution of the notice of guaranteed delivery.

WITHDRAWAL RIGHTS

You may withdraw tenders of old notes at any time before the expiration
date.

For withdrawal to be effective, a written notice of withdrawal must be
received by the exchange agent at the addresses set forth below under "Exchange
agent". Any notice of withdrawal must:

- specify the name of the person having tendered the old notes to be
withdrawn,

- identify the old notes to be withdrawn, including the principal amount
and

- where certificates for old notes have been transmitted, specify the name
in which those old notes are registered, if different from that of the
withdrawing holder.

If certificates for old notes have been delivered or otherwise identified
to the exchange agent then, before the release of such certificates you must
also submit the serial numbers of the particular certificates to be withdrawn
and a signed notice of withdrawal with signatures guaranteed by an eligible
institution unless you are an eligible institution. If you tendered old notes
under the procedure for book-entry transfer described above, the executed notice
of withdrawal, guaranteed by an eligible institution, unless you are an eligible
institution, must specify the name and number of the account at the book-entry
transfer facility to be credited with the withdrawn old notes

18
23

and otherwise comply with the procedures of that facility. All questions as to
the validity, form and eligibility, including time of receipt, of notices of
withdrawal will be determined by us. Our determination will be final and binding
on all parties. Any old notes withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the exchange offer. Any old notes which
you tender for exchange but which are not exchanged for any reason will be
returned to you without cost to you or, in the case of old notes tendered by
book-entry transfer into the exchange agent's account at the book-entry transfer
facility pursuant to the book-entry transfer procedures described above, such
old notes will be credited to an account maintained with the book-entry transfer
facility for the old notes as soon as practicable after withdrawal. Properly
withdrawn old notes may be retendered by following one of the procedures
described under "-- Procedures for tendering old notes" above at any time on or
before the expiration date.

CONDITIONS TO THE EXCHANGE OFFER

Notwithstanding any other provision of the exchange offer, we will not be
required to accept for exchange, or to issue new notes in exchange for, the old
notes and may terminate or amend the exchange offer if at any time before the
acceptance of the old notes for exchange or the exchange of the new notes for
the old notes any of the following events occurs:

(1) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission,

(a) seeking to restrain or prohibit the making or consummation of the
exchange offer or any other transaction contemplated by the
exchange offer, or assessing or seeking any damages as a result of
the exchange offer or any transaction contemplated by the exchange
offer, or

(b) resulting in a material delay in our ability to accept for
exchange or exchange some or all of the old notes in the exchange
offer,

or any statute, rule, regulation, order or injunction shall be sought,
proposed, introduced, enacted, promulgated or deemed applicable to the
exchange offer or any of the transactions contemplated by the exchange
offer by any government or governmental authority, domestic or foreign,
or any action shall have been taken, proposed or threatened, by any
government, governmental authority, agency or court, domestic or foreign,
that in our sole judgment might directly or indirectly result in any of
the consequences referred to in clauses (a) or (b) above or, in our sole
judgment, might result in the holders of new notes having obligations
with respect to resales and transfers of new notes which are greater than
those described in the interpretation of the SEC referred to in this
prospectus, or would otherwise make it inadvisable to proceed with the
exchange offer;

(2) there shall have occurred

(a) any general suspension of or general limitation on prices for, or
trading in, securities on any national securities exchange or in
the over-the-counter market,

(b) any limitation by any governmental agency or authority which may
adversely affect the ability of NTL to complete the transactions
contemplated by the exchange offer,

(c) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any
limitation by any governmental agency or authority which adversely
affects the extension of credit;

(3) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the United
States, or, in the case of any of the foregoing existing at the time
of the commencement of the exchange offer, a material acceleration or
worsening of those circumstances; or

(4) any change or any development involving a prospective change shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations
or prospects of NTL and our subsidiaries taken as a whole that, in
our reasonable judgment, is or may be

19
24

adverse to us, or we shall have become aware of facts that, in our
reasonable judgment, have or may have adverse significance with respect
to the value of the old notes or the new notes; which, in our reasonable
judgment in any case, and regardless of the circumstances, including any
action by us, giving rise to that condition, makes it inadvisable to
proceed with the exchange offer and/or with such acceptance or exchange
or with that exchange.

The conditions described above are for our sole benefit. Those conditions
may be asserted by us regardless of the circumstances giving rise to that
condition or may be waived by us in whole or in part at any time and from time
to time in our sole discretion. The failure by us at anytime to exercise any of
the foregoing rights shall not be deemed a waiver of any of our rights and each
of our rights shall be deemed an ongoing right which may be asserted at any time
and from time to time.

In addition, we will not accept for exchange any old notes tendered, and no
new notes will be issued in exchange for any such old notes, if at such time any
stop order shall be threatened or in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture under the Trust Indenture Act of 1939.

EXCHANGE AGENT

The Chase Manhattan Bank has been appointed as the exchange agent in
respect of the notes for the exchange offer. All executed letters of transmittal
should be sent to the exchange agent at one of the addresses set forth below.
Questions and requests for assistance, requests for additional copies of this
prospectus or of the letter of transmittal in respect of the notes and requests
for notices of guaranteed delivery should be directed to the exchange agent
addressed as follows:

Delivery To: The Chase Manhattan Bank, as exchange agent.

In London
By Mail, By Hand and Overnight Courier: By Facsimile:
The Chase Manhattan Bank (44) 207 777 5410
Attn: Operations Manager
Trinity Tower Confirm by Telephone:
9 Thomas More Street Operations Manager: (44) 207
London E1 9YT 777 5414

In New York
By Mail, By Hand and Overnight Courier: By Facsimile:
The Chase Manhattan Bank (212) 638-7380
Corporate Trust-Securities Window (212) 638-7381
Room 234 -- North Building
55 Water Street Confirm by Telephone:
New York, New York 10041 Carlos Esteves: (212) 638-0828
(212) 638-0454

In Luxembourg
By Mail, By Hand and Overnight Courier: By Facsimile:
Chase Manhattan Bank Luxembourg S.A. (352) 46 26 85 380
Attn: Operations Manager
5 Rue Plaetis Confirm by Telephone:
L-2338, Luxembourg Operations Manager:
(352) 46 26 85 236

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25

Delivery of the letter of transmittal in respect of the notes to an address
other than as set forth above or transmission via facsimile other than as set
forth above is not a valid delivery of the letter of transmittal.

FEES AND EXPENSES

We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer except for reimbursement of mailing expenses.

The estimated cash expenses to be incurred in connection with the exchange
offer will be paid by us and are estimated in the aggregate to be $250,000.

TRANSFER TAXES

You will not be obligated to pay any transfer taxes in connection with any
tender of old notes for exchange, except if you instruct us to register new
notes in the name of, or request that old notes not tendered or not accepted in
the exchange offer be returned to, a person other than the registered tendering
holder, you will be responsible for the payment of any applicable transfer tax
thereon.

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26

USE OF PROCEEDS

We will not receive any cash proceeds from the exchange of the old notes
for the new notes. We will use the aggregate net proceeds from the sale of the
old notes of approximately E293.0 million ($275.3 million), after deducting the
estimated initial purchasers' discounts and estimated offering expenses, to
finance our construction, capital expenditure and working capital requirements,
including debt service and repayment obligations and to make acquisitions of
businesses and assets related to our business.

Following the offering of the old notes, the lenders' commitments under NTL
Communications Limited's L1,300 million credit agreement, the proceeds of which
are available to finance our working capital requirements, were reduced by
approximately L93.2 million ($132.3 million). The lenders' commitments had been
previously reduced by approximately L161.9 million ($229.7 million) following
the issuance in October 2000 of our 11 7/8 senior notes due 2010. In addition,
following the issuance in May 2001 of the $1,150.0 million aggregate principal
amount of our 6 3/4% convertible senior notes due 2008, the commitment was
further reduced by approximately L456.0 million ($647.1 million). As a result,
the commitment under this credit agreement is now approximately L588.9 million
($835.6 million).

EXCHANGE RATES

The following table sets forth, for the periods indicated, the noon buying
rate for pounds sterling expressed in U.S. dollars per L1.00.

The average rate is the average of the noon buying rates on the last day of
each month during the relevant period.

YEAR ENDED DECEMBER 31, PERIOD END AVERAGE HIGH LOW
- ----------------------- ---------- ---------- ----- -----

1996.......................................... 1.71 1.56 1.72 1.49
1997.......................................... 1.65 1.64 1.71 1.56
1998.......................................... 1.66 1.66 1.72 1.61
1999.......................................... 1.62 1.61 1.68 1.55
2000.......................................... 1.49 1.51 1.65 1.40
2001 (through June 15)........................ 1.41 1.44 1.50 1.37

The following table sets forth, for the periods indicated, the noon buying
rate for Euro expressed in U.S. dollars per E1.00.

The average rate is the average of the noon buying rates on the last day of
each month during the relevant period.

YEAR ENDED DECEMBER 31, PERIOD END AVERAGE HIGH LOW
- ----------------------- ---------- ---------- ----- -----

1999.......................................... 1.00 1.06 1.18 1.00
2000.......................................... 0.94 0.92 1.03 0.83
2001 (through June 15)........................ 0.86 0.90 0.95 0.84

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27

CAPITALIZATION

The following table sets forth our consolidated capitalization as of March
31, 2001: (1) on an actual basis, and (2) as adjusted to give effect to the
issuance in May 2001 of the 6 3/4% convertible senior notes due 2008 and the
application of the net proceeds of that issuance.

AS OF MARCH 31, 2001
------------------------
ACTUAL(1) AS ADJUSTED
--------- -----------
(DOLLARS IN MILLIONS)

Cash and cash equivalents................................... $ 283.9 $ 1,398.6
========= =========
Current portion of long-term debt........................... $ 3.0 $ 3.0
========= =========
Long-term debt:
NTL Communications Corp.:
12 3/4% Senior Deferred Coupon Notes due 2005.......... $ 277.8 $ 277.8
11 1/2% Senior Deferred Coupon Notes due 2006.......... 1,050.0 1,050.0
9 1/4% Senior Euro Notes due 2006...................... 219.9 219.9
10% Senior Notes due 2007.............................. 400.0 400.0
9 1/2% Senior Sterling Notes due 2008, less unamortized
discount.............................................. 176.9 176.9
10 3/4% Senior Deferred Coupon Sterling Notes due
2008.................................................. 344.4 344.4
9 3/4% Senior Deferred Coupon Notes due 2008........... 1,073.6 1,073.6
11 1/2% Senior Notes due 2008.......................... 625.0 625.0
12 3/8% Senior Deferred Coupon Notes due 2008.......... 333.3 333.3
7% Convertible Subordinated Notes due 2008............. 489.8 489.8
9 3/4% Senior Deferred Coupon Sterling Notes due
2009.................................................. 350.5 350.5
9 7/8% Senior Euro Notes due 2009...................... 307.8 307.8
11 1/2% Senior Deferred Coupon Euro Notes due 2009..... 123.2 123.2
11 7/8% Senior Notes due 2010, less unamortized
discount.............................................. 489.9 489.9
12 3/8% Senior Notes due 2008.......................... 263.8 263.8
6 3/4% Convertible Senior Notes due 2008............... -- 1,150.0
NTL Communications Ltd:
Credit Agreement....................................... 3,547.5 3,547.5
Other.................................................. 2.3 2.3
NTL Triangle:
11.2% Senior Discount Debentures due 2007.............. 517.3 517.3
Other.................................................. 3.5 3.5
Diamond:
13 1/4% Senior Discount Notes due 2004................. 285.1 285.1
11 3/4% Senior Discount Notes due 2005................. 531.0 531.0
10 3/4% Senior Discount Notes due 2007................. 383.8 383.8
10% Senior Sterling Notes due 2008..................... 191.6 191.6
9 1/8% Senior Notes due 2008........................... 110.0 110.0
Other.................................................. 3.2 3.2
--------- ---------
Total long-term debt.............................. 12,101.2 13,251.2
--------- ---------
Shareholder's equity (deficiency)
Common stock, $0.01 par value, 100 shares authorized,
12 shares issued and outstanding...................... -- --
Additional paid-in capital............................. 13,951.8 13,951.8
Accumulated other comprehensive (loss)................. (501.7) (501.7)
(Deficit).............................................. (5,191.0) (5,191.0)
--------- ---------
Total shareholder's equity........................ 8,259.1 8,259.1
--------- ---------
Total capitalization........................................ $20,360.3 $21,510.3
========= =========

- ---------------

(1) Except for the issuance in May 2001 of our 6 3/4% convertible senior notes
due 2008, there has been no material change to our capitalization since
March 31, 2001.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The selected consolidated financial information for NTL Communications
Corp. presented below under the captions "Income Statement Data" for the years
ended December 31, 2000, 1999, 1998, 1997 and 1996 and "Balance Sheet Data" at
December 31, 2000, 1999, 1998, 1997 and 1996 was derived from our audited
consolidated financial statements. Interim data at March 31, 2001, and for the
three months ended March 31, 2000 and 2001 are unaudited but include, in the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of that data. Results for the
three months ended March 31, 2001 are not necessarily indicative of the results
that may be expected for any other interim period or for the year as a whole.
This information should be read in conjunction with the consolidated financial
statements and notes thereto appearing elsewhere in this prospectus.

Since 1998, we have completed a series of acquisitions:

- In June and September 1998, we purchased ComTel for an aggregate purchase
price of approximately $969.0 million, including intangibles aggregating
approximately $224.0 million.

- In December 1998, we purchased Eastern Group Telecoms, or EGT, for an
aggregate purchase price of approximately $151.0 million, including
intangibles of approximately $45.0 million.

- In March 1999, we purchased Diamond Cable Communications plc for an
aggregate purchase price of approximately $984.6 million, including
intangibles of $1,323.0 million.

- In July 1999, we acquired Cablelink Limited for an aggregate purchase
price of $700.5 million, including intangibles of $669.6 million.

- In September 1999, NTL Delaware acquired the shares of Workplace
Technologies plc which has been renamed NTL Business for an aggregate
purchase price of $175.0 million, including intangibles of $176.9
million.

- In May 2000, NTL Incorporated acquired ConsumerCo from Cable & Wireless
plc for an aggregate purchase price of $13,111.0 million, including
intangibles of $8,879.0 million.

In February 2001, pursuant to the terms of NTL Business' credit agreement
which was used to partially fund the acquisition of ConsumerCo, NTL Incorporated
contributed all of the outstanding share capital of ConsumerCo to us and NTL
Delaware contributed all the outstanding share capital of NTL Business to us.

In May 1996, we purchased NTL Group Limited for an aggregate purchase price
of approximately $439.0 million, including goodwill of approximately $263.0
million. The net assets and results of operations of NTL Group Limited are
included in the consolidated financial statements from the date of the
acquisition.

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29

THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------ --------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- ------- --------- -------- ------- ------- -------
(IN MILLIONS)

INCOME STATEMENT DATA:
Revenues........................... $ 770.5 $ 470.9 $ 2,484.2 $1,537.1 $ 747.0 $ 491.8 $ 228.3
Costs and expenses
Operating expenses............... 386.8 213.0 1,223.2 761.5 400.9 301.7 144.3
Selling, general and
administrative expenses....... 279.4 189.2 969.1 562.9 270.7 169.1 115.0
Depreciation and amortization.... 623.7 235.3 1,700.7 765.7 266.1 150.5 98.6
Franchise fees................... -- -- -- 16.5 25.0 23.6 13.1
Corporate expenses............... 4.1 6.6 23.7 25.3 17.1 18.4 14.9
Other charges.................... 7.4 -- 92.7 16.2 (4.2) 20.6 --
-------- ------- --------- -------- ------- ------- -------
Total costs and expenses...... 1,301.4 644.1 4,009.4 2,148.1 975.6 683.9 385.9
-------- ------- --------- -------- ------- ------- -------
Operating (loss)................. (530.9) (173.2) (1,525.2) (611.0) (228.6) (192.1) (157.6)
Other income (expense)
Interest income and other, net... 7.6 8.5 1.6 29.9 46.0 28.4 33.6
Interest expense................. (308.0) (188.7) (886.3) (678.2) (328.8) (202.6) (137.0)
Other gains...................... -- -- -- 493.1 -- 21.5 --
Foreign currency transaction
(losses) gains................ (5.7) 12.0 (58.1) 22.8 4.2 0.6 2.4
-------- ------- --------- -------- ------- ------- -------
(Loss) before income taxes,
minority interests and
extraordinary item............... (837.0) (341.4) (2,468.0) (743.4) (507.2) (344.2) (258.6)
Income tax benefit (provision)..... 1.2 4.7 79.9 29.9 3.3 15.6 (7.7)
-------- ------- --------- -------- ------- ------- -------
(Loss) before minority interests
and extraordinary item........... (835.8) (336.7) (2,388.1) (713.5) (503.9) (328.6) (266.3)
Minority interests................. -- -- -- -- -- -- 11.8
-------- ------- --------- -------- ------- ------- -------
(Loss) before extraordinary item (835.8) (336.7) (2,388.1) (713.5) (503.9) (328.6) (254.5)
(Loss) from early extinguishment of
debt............................. -- -- -- (3.0) (30.7) (4.5) --
-------- ------- --------- -------- ------- ------- -------
Net (loss)......................... $ (835.8) $(336.7) $(2,388.1) $ (716.5) $(534.6) $(333.1) $(254.5)
======== ======= ========= ======== ======= ======= =======
OTHER DATA:
Capital expenditures............... $ 542.0 $ 356.9 $ 1,961.8 $1,198.3 $ 772.2 $ 503.7 $ 505.7
Ratio of earnings to fixed
charges(1)....................... -- -- -- -- -- -- --

DECEMBER 31,
MARCH 31, --------------------------------------------------------
2001 2000 1999 1998 1997 1996
--------- --------- -------- --------- --------- ---------
(IN MILLIONS)

BALANCE SHEET DATA:
Cash, cash equivalents and
marketable securities............ $ 283.9 $ 423.5 $1,079.2 $ 996.9 $ 103.9 $ 445.9
Working capital (deficiency)....... (845.6) (937.2) 423.9 600.5 (52.3) 242.1
Fixed assets, net.................. 10,554.6 10,916.8 5,348.4 3,854.4 1,757.0 1,459.5
Total assets....................... 22,409.5 23,146.5 9,733.0 6,194.1 2,421.6 2,454.6
Long-term debt..................... 12,101.2 11,843.4 7,598.0 5,043.8 2,015.1 1,732.2
Redeemable preferred stock......... -- -- -- 124.1 108.5 --
Shareholder's equity
(deficiency)..................... 8,259.1 9,012.2 1,066.0 355.2 (61.7) 328.1

- ---------------

(1) For the purposes of calculating the ratio of earnings to fixed charges,
fixed charges consist of interest expense, including capitalized interest,
amortization of fees related to debt financing and rent expense deemed to be
interest. For the three months ended March 31, 2001 and the years ended
December 31, 2000, 1999, 1998, 1997 and 1996, our earnings were insufficient
to cover fixed charges by approximately $858.6 million, $2,563.1 million,
$785.2 million, $535.0 million, $350.9 million and $268.9 million,
respectively.

25
30

UNAUDITED PRO FORMA FINANCIAL INFORMATION

In May 2000, NTL Incorporated acquired ConsumerCo and in September 1999,
NTL Delaware acquired NTL Business. On February 21, 2001, as required by our
bank credit agreements, we completed a transaction whereby we acquired the
entire issued share capital of ntl (CWC Holdings) Limited, the entity that owns
ConsumerCo, from NTL Incorporated and the entire issued share capital of NTL
Business from NTL Delaware in exchange for shares of our common stock.

The unaudited pro forma financial information presented gives effect to the
acquisition of ConsumerCo in May 2000 as if it had been consummated on January
1, 2000. The unaudited pro forma financial information is based on our
historical financial statements restated in a manner similar to that used in a
pooling of interests for the acquisition of ntl (CWC Holdings) from NTL
Incorporated and the historical financial statements of ConsumerCo from January
1, 2000 to the date of acquisition. The historical financial statement of
ConsumerCo is prepared in accordance with U.S. generally accepted accounting
principles and have been translated into U.S. dollars using an exchange rate of
$1.5823 to L1.00 (the average exchange rate for the period). Certain amounts in
the historical financial statement, have been reclassified to conform to our
presentation.

The unaudited pro forma financial data does not give effect to the issuance
in May 2001 of our 6 3/4% convertible senior notes due 2008 and the use of the
proceeds from such issuance.

The historical results of ConsumerCo reflect certain intercompany costs and
expenses as they were prior to the separation for ConsumerCo which was completed
in the second quarter of 2000. These costs and expenses do not necessarily
reflect the costs and expenses that would have been incurred if DataCo (the
non-ConsumerCo part of Cable & Wireless Communications plc that was retained by
Cable & Wireless) and ConsumerCo were separate entities during this period.
Therefore, the historical financial statement of ConsumerCo, which is included
in the unaudited pro forma financial information, is not reflective of results
on a going forward basis.

The acquisition of ConsumerCo has been accounted for at the historical cost
of NTL Incorporated. This is consistent with a transfer of entities under common
control, and is similar to the accounting used in a "pooling of interests." NTL
Incorporated accounted for its acquisition of ConsumerCo using the purchase
method of accounting. Accordingly, the assets acquired and the liabilities
assumed were recorded at their estimated fair values at the time of acquisition.

The pro forma adjustments are based upon available information and
assumptions that we believe were reasonable at the time made. The unaudited pro
forma financial information does not purport to present our results of
operations had the acquisition occurred on the date specified, nor are they
necessarily indicative of the results of operations that may be achieved in the
future. The unaudited pro forma condensed combined statement of operations does
not reflect any adjustments for cost savings that we expect to realize. The pro
forma adjustments reflecting the acquisitions are based upon the assumptions set
forth in the notes to the pro forma financial information. No assurances can be
made as to the amount of cost savings or revenue enhancements, if any, that may
be realized.

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31

NTL COMMUNICATIONS CORP.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2000
(IN MILLIONS)

NTL
COMMUNICATIONS CORP. CONSUMERCO
(HISTORICAL) (HISTORICAL) ADJUSTMENTS PRO FORMA
-------------------- ------------ ----------- ---------

REVENUES............................ $ 2,484.2 $ 469.2 $ 2,953.4
COSTS AND EXPENSES
Operating expenses.................. 1,223.2 195.1 1,418.3
Selling, general and administrative
expenses.......................... 969.1 199.2 1,168.3
Other charges....................... 92.7 -- 92.7
Corporate expenses.................. 23.7 -- 23.7
Depreciation and amortization....... 1,700.7 191.8 $ 366.9A 2,259.4
--------- ------- ------- ---------
4,009.4 586.1 366.9 4,962.4
--------- ------- ------- ---------
Operating loss...................... (1,525.2) (116.9) (366.9) (2,009.0)
OTHER INCOME (EXPENSE)
Interest income and other, net...... (56.5) 1.7 4.5B (50.3)
Interest expense.................... (886.3) (132.3) (29.6)C (1,048.2)
--------- ------- ------- ---------
Loss before income taxes............ (2,468.0) (247.5) (392.0) (3,107.5)
Income tax benefit (provision)...... 79.9 54.1 134.0
--------- ------- ------- ---------
Net (loss).......................... $(2,388.1) $(193.4) $(392.0) $(2,973.5)
========= ======= ======= =========

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32

NTL COMMUNICATIONS CORP.
NOTES TO THE PRO FORMA FINANCIAL DATA
(in millions)

A. DEPRECIATION AND AMORTIZATION: CONSUMERCO
----------
For the year ended December 31, 2000
Intangibles (10 years).................................... $ 366.9
==========

B. INTEREST INCOME (USING 4.867%):
For the year ended December 31, 2000
Reduction of interest income on cash on hand used......... $ (2.1)
Interest income on excess cash from Bank financing........ 6.6
----------
$ 4.5
==========
C. INTEREST EXPENSE:
For the year ended December 31, 2000
Reduction of interest expense for debt not assumed........ $ 91.4
Interest on Bank Financing at 8.28%....................... (121.0)
----------
$ (29.6)
==========

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33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF NTL COMMUNICATIONS

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 AND 2000

As a result of the completion of the acquisition of the consumer cable
telephone, Internet and television operations of Cable & Wireless Communications
plc ("ConsumerCo") in May 2000, we consolidated the results of operations of
ConsumerCo from the date of acquisition.

For the three months ended March 31, 2000, certain revenues have been
reclassified from business telecommunications to broadcast transmission and
other, and certain costs have been reclassified from operating expenses to
selling, general and administrative expenses to conform to the 2001
classifications. In 2000 and 2001, the substantial majority of revenues in all
segments was derived from operations in the United Kingdom.

Consumer telecommunications and television revenues increased to $502.2
million from $248.3 million as a result of an acquisition and from growth in our
customer base. The 2001 revenue includes $239.9 million from ConsumerCo. Our
immediate goal is to drive the majority of revenue growth from average revenue
per unit, or ARPU, increases rather than adding new customers. Achievement of
this goal would allow us to achieve our revenue targets, have a lower capital
requirement due to fewer installations, and improve EBITDA as we reduce
front-loaded costs such as customer acquisition costs and higher initial
maintenance costs. In the first quarter of 2001, we increased revenues from
existing customers as a result of migrating customers to digital television,
price increases and upselling additional products and services. We expect this
trend to continue in the second quarter of 2001.

Business telecommunications revenues increased to $200.2 million from
$158.0 million as a result of an acquisition, growth in our customer base and
increases in carrier services revenues. The 2001 revenue includes $26.5 million
from ConsumerCo. We continue to focus specific sales and marketing effort on
winning business customers in our franchise areas and increasing revenue from
our existing customers. Carrier services revenues increased due to growth in
services provided by our wholesale operation to other telephone companies,
including wireless service operators. Revenue growth in carrier services is
primarily dependent upon our ability to continue to attract new customers and
expand services to existing customers.

Broadcast transmission and other revenues increased to $68.1 million from
$64.6 million. The increase reflects increases in the number of broadcast
television and FM radio customers and accounts, which exceeded price cap
reductions in our regulated services, and increases in satellite and media
services used by broadcast and media customers. We expect growth in broadcast
services to be driven primarily by contracts related to the increased demand for
tower infrastructure by wireless services operators expanding and upgrading
their networks for wireless broadband, the privatization of national broadcast
networks, the digitalization of analog television and radio signals and the
further development of programming for the European markets requiring satellite
and terrestrial distribution services.

Operating expenses (including network expenses) increased to $386.8 million
from $213.0 million as a result of an acquisition and increases in
interconnection and programming costs due to customer growth. The 2001 expense
includes $107.3 million from ConsumerCo.

Selling, general and administrative expenses increased to $279.4 million
from $189.2 million as a result of the acquisition of ConsumerCo. The 2001
expense includes $92.0 million from ConsumerCo.

Other charges of $7.4 million in 2001 are principally for costs incurred to
integrate the acquired companies and are primarily related to information
technology integration, and costs incurred for business rationalization.

Corporate expenses decreased to $4.1 million from $6.6 million due to a
reduction in various overhead costs.

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Depreciation and amortization expense increased to $623.7 million from
$235.3 million due to an increase in amortization on acquisition related
intangibles and an increase in depreciation of telecommunications and cable
television equipment. The 2001 expense includes $396.2 million from ConsumerCo,
including amortization of acquisition related intangibles.

Interest expense increased to $308.0 million from $188.7 million due to the
issuance of additional debt, and the increase in the accretion of original issue
discount on the deferred coupon notes. The 2001 expense includes $58.2 million
in interest on acquisition related debt. Interest of $186.0 million and $103.6
million was paid in cash in the three months ended March 31, 2001 and 2000,
respectively.

Foreign currency transaction (losses) gains decreased to losses of $5.7
million from gains of $12.0 million primarily due to the effect of changes in
exchange rates, primarily the weakening of the pound sterling against the U.S.
dollar. We and certain of our subsidiaries have cash, cash equivalents and debt
denominated in non U.S. dollar currencies that are affected by changes in
exchange rates. In addition, our foreign subsidiaries whose functional currency
is not the U.S. dollar hold cash, cash equivalents and debt denominated in U.S.
dollars which are affected by changes in exchange rates.

We recorded restructuring costs in November 2000 as a result of the
completion of a consolidation review. This charge consisted of employee
severance and related costs of $47.9 million for approximately 2,300 employees
to be terminated and lease exit costs of $18.0 million. As of March 31, 2001,
$20.5 million of the provision had been used, including $17.5 million for
employee severance and related costs and $3.0 million for lease exit costs. As
of March 31, 2001, approximately 1,100 employees had been terminated. The
remaining restructuring reserve of $45.4 million includes $30.4 million for
employee severance and related costs and $15.0 million for lease exit costs.

YEARS ENDED DECEMBER 31, 2000 AND 1999

As a result of the completion of the acquisitions of Diamond Cable
Communications Limited ("Diamond") in March 1999, Cablelink Limited
("Cablelink") in July 1999, NTL Business Limited (formerly Workplace
Technologies plc) ("NTL Business") in September 1999 and ConsumerCo in May 2000,
we consolidated the results of operations of these businesses from the dates of
acquisition.

For the year ended December 31, 1999, certain revenues have been
reclassified from business telecommunications to broadcast transmission and
other and certain costs have been reclassified from operating expenses to
selling, general and administrative expenses to conform to the 2000
classifications. In both 1999 and 2000, the substantial majority of revenue in
all segments was derived from operations in the United Kingdom.

A significant component of the results since May 2000 is associated with
the acquisition of ConsumerCo. Prior to the acquisition, the ConsumerCo business
had been losing customers on a quarterly basis. Since the acquisition,
ConsumerCo has experienced a dramatic turnaround in customer additions, as well
as materially reduced monthly churn. As the quality of the ConsumerCo customers'
experience continues to improve, we expect to continue to reduce churn and
increase penetration. However, this will cause certain costs to increase through
the near term.

Consumer telecommunications and television revenues increased to $1,518.2
million from $827.3 million as a result of acquisitions and from growth in our
customer base. The 2000 and 1999 revenue includes $773.6 million and $162.4
million, respectively, from acquired companies. Our immediate goal is to drive
the majority of

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revenue growth from ARPU increases rather than adding new customers. Achievement
of this goal would allow us to maintain revenue targets, have a lower capital
requirement, due to fewer installations, and improve EBITDA as we reduce
front-loaded costs such as customer acquisition costs and higher initial
maintenance costs.

Business telecommunications revenues increased to $702.2 million from
$452.5 million as a result of acquisitions, growth in our customer base and
increases in carrier services revenues. The 2000 and 1999 revenue includes
$234.3 million and $92.8 million, respectively, from acquired companies. We
continue to focus specific sales and marketing effort on winning business
customers in our franchise areas and promoting broadband for small businesses.
Carrier services revenues increased due to growth in services provided by the
our wholesale operation to other telephone companies. Revenue growth in carrier
services is primarily dependent upon our ability to continue to attract new
customers and expand services to existing customers.

Broadcast transmission and other revenues increased to $263.8 million from
$257.3 million due to increases in broadcast television and FM radio customers
and accounts, which exceeded price cap reductions in our regulated services, and
increases in satellite and media services used by broadcast and media customers.
We expect growth in broadcast services to be driven primarily by contracts
related to the increased demand for tower infrastructure by wireless services
operators expanding and upgrading their networks for wireless broadband, the
privatization of national broadcast networks, the digitalization of analog
television and radio signals and the further development of programming for the
European markets requiring satellite and terrestrial distribution services.

Operating expenses (including network expense) increased to $1,223.2
million from $761.5 million as a result of increases in interconnection costs
and programming costs due to customer growth. Operating expenses as a percentage
of revenues decreased to 49.2% from 49.5%. The 2000 and 1999 expense includes
$502.5 million and $141.9 million respectively, from acquired companies.

Selling, general and administrative expenses increased to $969.1 million
from $562.9 million as a result of increases in telecommunications and cable
television sales and marketing costs and increases in additional personnel and
overhead to service the increasing customer base. The 2000 and 1999 expense
includes $377.9 million and $52.5 million respectively, from acquired companies.

Pursuant to the terms of various U.K. licenses, we incurred license fees
paid to the Independent Television Commission ("ITC") to operate as the
exclusive service provider in certain of its franchise areas. Upon a request by
us in 1999, the ITC converted all of our fee bearing exclusive licenses to
non-exclusive licenses at the end of 1999, and our liability for license
payments ceased upon the conversion. Franchise fees were $16.5 million in 1999.

In September 2000, the Board of Directors approved modifications to certain
stock options granted to employees in November 1999 through May 2000. Options to
purchase an aggregate of approximately 16.5 million shares of NTL Incorporated's
common stock with a weighted average exercise price of $64.39 per share were
modified such that the exercise price was reduced to $44.50 per share and the
vesting schedule was delayed and/or lengthened. This change did not affect the
exercise price of options granted to the Chairman of the Board, the President
and Chief Executive Officer and our Directors. In accordance with APB Opinion
No. 25, "Accounting for Stock Issued to Employees" and related interpretations,
NTL Incorporated is accounting for these options as a variable plan beginning in
September 2000. We will recognize non-cash compensation expense for the
difference between the quoted market price of NTL Incorporated's common stock
and the exercise price of the vested options while the options remain
outstanding. There was no compensation expense recognized in the year ended
December 31, 2000 as a result of these option modifications.

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be terminated and lease exit costs of $18.0 million. As of December 31, 2000,
approximately 360 of the employees had been terminated. None of the provision
had been utilized through December 31, 2000. The information technology
integration costs of $26.8 million were incurred for the integration of acquired
companies' information technology. Other charges of $16.2 million in 1999 were
incurred for the cancellation of certain contracts.

Corporate expenses decreased to $23.7 million from $25.3 million due to a
decrease in various overhead costs.

Depreciation and amortization expense increased to $1,700.7 million from
$765.7 million due to an increase in depreciation of telecommunications and
cable television equipment. The 2000 and 1999 expense includes $1,066.3 million
and $190.5 million respectively, from acquired companies, including amortization
of acquisition related intangibles.

Interest income and other, net decreased to $1.6 million from $29.9 million
as a result of increases in the net losses of affiliates accounted for by the
equity method and decreases in interest income.

Interest expense increased to $886.3 million from $678.2 million due to the
issuance of additional debt, and the increase in the accretion of original issue
discount on the deferred coupon notes. The 2000 and 1999 expense includes $298.7
million and $133.8 million, respectively, from acquired companies. Interest of
$459.0 million and $222.1 million was paid in the years ended December 31, 2000
and 1999, respectively.

Other gains of $493.1 million in 1999 are from the sale of our investment
in Cable London.

Foreign currency transaction (losses) gains decreased to losses of $58.1
million from gains of $22.8 million primarily due to the effect of unfavorable
changes in exchange rates primarily the weakening of the pound sterling against
the U.S. dollar. Our results of operations are impacted by changes in foreign
currency exchange rates as follows. We and certain of our subsidiaries have
cash, cash equivalents and debt denominated in foreign currencies that are
affected by changes in exchange rates. In addition, our foreign subsidiaries
whose functional currency is not the U.S. dollar hold cash, cash equivalents and
debt denominated in U.S. dollars which are affected by changes in exchange
rates.

We recorded an extraordinary loss from the early extinguishment of debt of
$3.0 million in 1999 as a result of the repayment of the bridge loan incurred in
connection with the Cablelink acquisition.

YEARS ENDED DECEMBER 31, 1999 AND 1998

As a result of the completion of the acquisitions of ComTel in June and
September 1998, NTL (Triangle) LLC (formerly Comcast U.K. Cable Partners
Limited) ("NTL Triangle") in October 1998, EGT in December 1998, Diamond in
March 1999, Cablelink in July 1999 and NTL Business in September 1999, we
consolidated the results of operations of these businesses from the dates of
acquisition. The results of these businesses are not included in the 1998
results except for the results of operations of ComTel, NTL Triangle and EGT
from the dates of acquisition.

For the years ended December 31, 1999 and 1998, certain revenues have been
reclassified from business telecommunications to broadcast transmission and
other and certain costs have been reclassified between selling, general and
administrative expenses and operating expenses to conform to 2000
classifications. In both 1998 and 1999 the substantial majority of revenues in
all segments were derived from operations in the United Kingdom.

Consumer telecommunications and television revenues increased to $827.3
million from $355.6 million as a result of acquisitions and from customer
growth. The 1999 and 1998 revenue includes $467.2 million and $74.2 million,
respectively, from acquired companies.

Business telecommunications revenues increased to $452.5 million from
$157.7 million as a result of acquisitions, customer growth and increases in
carrier service revenues. The 1999 and 1998 revenue includes $200.8 million and
$8.5 million, respectively from acquired companies. Carrier services revenues
increased due

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to growth in telephone services provided by our wholesale operation to other
telephone companies. Revenue growth in carrier services is primarily dependent
upon our ability to continue to attract new customers and expand services to
existing customers.

Broadcast transmission and other revenues increased to $257.3 million from
$231.3 million due to increases in broadcast television and FM radio customers
and accounts, which exceeded price cap reductions in our regulated services and
from increases in satellite and media services used by broadcast and media
customers.

Other telecommunications revenues decreased to zero from $2.4 million due
to the sales of the assets of our wholly-owned subsidiary, OCOM Corporation to
AirTouch Communications, Inc. and to Cellular Communications of Puerto Rico,
Inc. during 1998.

Operating expenses increased to $761.5 million from $400.9 million as a
result of acquisitions and increases in interconnection costs and programming
costs due to customer growth. The 1999 and 1998 expense includes $330.1 million
and $51.1 million, respectively, from acquired companies.

Selling, general and administrative expenses increased to $562.9 million
from $270.7 million as a result of increases in telecommunications and cable
television sales and marketing costs and increases in additional personnel and
overhead to service the increasing customer base. In addition, $47.4 million of
the increase was due to the new national brand and advertising campaign, which
began in the second quarter of 1999 and continued into 2000. The 1999 and 1998
expense includes $215.8 million and $25.1 million, respectively, from acquired
companies.

Pursuant to the terms of various U.K. licenses, we incurred license fees
paid to the ITC to operate as the exclusive service provider in certain of our
franchise areas. Upon a request by us in 1999, the ITC converted all of our fee
bearing exclusive licenses to non-exclusive licenses by the end of 1999, and our
liability for license payments ceased upon the conversion. Franchise fees
decreased to $16.5 million from $25.0 million due to the reversal of the accrued
liability for franchise fees of $13.6 million. The 1999 amount includes Diamond
franchise fees of $5.0 million.

Other charges of $16.2 million in 1999 were incurred for the cancellation
of certain contracts. Other charges of $4.2 reversed in 1998 were the result of
changes to a restructuring reserve that was recorded in 1997.

Corporate expenses increased to $25.3 million from $17.1 million due to an
increase in various overhead costs.

Depreciation and amortization expense increased to $765.7 million from
$266.1 million due to an increase in depreciation of telecommunications and
cable television equipment. The 1999 and 1998 expense includes $404.7 million
and $45.9 million respectively, from acquired companies, including amortization
of acquisition related intangibles.

Interest expense increased to $678.2 million from $328.8 million due to the
issuance of additional debt and the increase in the accretion of original issue
discount on the deferred coupon notes. The 1999 expense includes $184.8 million
from acquired companies. Interest of $222.1 million and $118.3 million was paid
in the years ended December 31, 1999 and 1998, respectively.

Other gains of $493.1 million in 1999 are from the sale of our investment
in Cable London.

Foreign currency transaction gains increased to $22.8 million from $4.2
million primarily due to favorable changes in the exchange rate on our pounds
sterling and Euro denominated notes in 1999.

We recorded an extraordinary loss from the early extinguishment of debt of
$3.0 million in 1999 as a result of the repayment of the bridge loan incurred in
connection with the Cablelink acquisition. We recorded an extraordinary loss
from the early extinguishment of debt of $30.7 million in 1998 as a result of
the redemption of the 10 7/8% notes and the repayment of a bank loan.

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RECENT ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 provides guidance on the recognition, presentation and
disclosure of revenue in financial statements. SAB 101 was required to be
adopted retroactive to January 1, 2000. The adoption of SAB 101 had no
significant effect on our revenues or results of operations.

Effective January 1, 2001, we adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended by SFAS Nos. 137 and
138. The new accounting standard requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in the results of operations or in other
comprehensive income (loss), depending on whether a derivative is designated as
a fair value or cash flow hedge. The ineffective portion of all hedges will be
recognized in the results of operations.

On January 1, 2001, we recorded all of our outstanding derivative
instruments at their fair value. The outstanding derivative instruments were
comprised of cross currency swaps to hedge exposure to movements in the British
pound/U.S. dollar exchange rate. The aggregate fair value on January 1, 2001 was
a liability of $2.2 million, which was recorded as other comprehensive loss.

LIQUIDITY AND CAPITAL RESOURCES

We will continue to require significant amounts of capital to finance
construction of our local and national networks, for connection of telephone,
telecommunications, Internet and cable television customers to the networks, for
other capital expenditures and for debt service. We estimate that these
requirements, net of cash from operations, will aggregate up to approximately
$1,450.0 million from April 1, 2001 to December 31, 2001. Our commitments at
March 31, 2001 for equipment and services through 2001 of approximately $335.0
million are included in the anticipated requirements. We had approximately
$283.9 million in cash on hand at March 31, 2001. We expect to utilize the
proceeds from the issuance of convertible notes in May 2001, proceeds from the
proposed GE Capital financing and a portion of our bank credit facilities to
fund the balance of these requirements.

NTLCL and NTL Business, our wholly-owned subsidiaries entered into a
L2,500.0 million ($3,547.5 million) credit agreement in May 2000 in connection
with the acquisition of ConsumerCo. As of March 31, 2001, this credit facility
was fully drawn. Interest is payable at least every six months at LIBOR plus a
margin rate of 2.25% per annum, which is subject to adjustment based on the
ratio of EBITDA to finance charges of the UK Group. The effective interest rate
at March 31, 2001 was 8.03%. 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. Principal is due in six quarterly
installments beginning on June 30, 2004. On February 21, 2001, as required by
the NTL Business and NTLCL credit agreement, we completed a transaction whereby
we acquired ConsumerCo from NTL Incorporated and NTL Business from NTL Delaware
in exchange for shares of our common stock. As a result of this transaction,
ConsumerCo and NTL Business became our subsidiaries, and NTL Business' interest
in the L2,500.0 million credit agreement was assigned to a subsidiary of NTLCL.

NTLCL entered into a L1,300.0 million ($1,844.7 million) credit agreement
with a group of banks dated May 30, 2000. Pursuant to the credit agreement, in
connection with the issuance in October 2000 of our 11 7/8% senior notes due
2010, and the issuance in January and February 2001 of the old notes, the
lenders' commitment under the credit agreement was reduced by L255.1 million
($362.0 million). Following the issuance in May 2001 of the $1,150.0 million
aggregate principal amount of 6 3/4% convertible senior notes the commitment was
further reduced by approximately L456.0 million ($647.1 million). As a result,
the commitment under this facility is now approximately L588.9 million ($835.6
million). As of March 31, 2001 there were no amounts borrowed under this credit
agreement. Although from time to time we have drawn down amounts on this
facility, as of May 31, 2001 no amounts were outstanding under this agreement.
NTLCL and other members of the UK Group (as defined) may utilize the proceeds
under this credit agreement to finance the working capital requirements of the

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UK Group, provided that in no event shall the proceeds be used for a purpose
other than to finance the construction, capital expenditure and working capital
needs of a cable television or telephone or telecommunications business, or a
related business, in the United Kingdom or Ireland. For purposes of this credit
agreement, Diamond Cable Communications Limited and subsidiaries, NTL (Triangle)
LLC and subsidiaries and certain other entities are excluded from the UK Group.
Interest is payable at least every six months at LIBOR plus a margin rate of
4.5% per annum. The margin rate shall increase by 0.5% on the three month
anniversary of the initial advance and by an additional 0.5% on each subsequent
three month anniversary, up to a maximum total interest rate of 16% per annum.
The unused portion of the commitment is subject to a commitment fee of 0.75%
payable quarterly. Principal is due in full on March 31, 2006.

In April 2001, NTL Incorporated received a commitment from a unit of GE
Capital for $388.0 million in financing. Subject to definitive documentation and
customary closing conditions, GE Capital will provide L200.0 million ($283.8
million) through an increase to the L2,500.0 million credit agreement of NTLCL.
This increase is also subject to the consent of the existing lenders under the
credit agreement. The remainder will be in the form of 5.75% convertible notes,
convertible into NTL Incorporated common stock at a conversion price of $35.00
per share. We intend to use approximately half of the proceeds to repay
outstanding amounts under the L2,500.0 million credit agreement and the
remainder for construction, capital expenditure and general corporate purposes.

In May 2001, we and NTL Incorporated issued $1,150.0 million principal
amount of 6 3/4% convertible senior notes due 2008. Interest is payable
semiannually in cash at a rate of 6 3/4% per annum beginning on November 15,
2001. The holders may convert these notes into shares of NTL Incorporated common
stock at any time after August 13, 2001, at an initial conversion price of
$32.728 per share, subject to adjustments. These convertible notes are
redeemable by us and NTL Incorporated at any time after May 20, 2004.

Regarding our estimated cash requirements described above, there can be no
assurance that: (a) actual construction costs will not exceed the amounts
estimated or that additional funding substantially in excess of the amounts
estimated will not be required, (b) conditions precedent to advances under
credit facilities will be satisfied when funds are required, (c) we and our
subsidiaries will be able to generate sufficient cash from operations to meet
capital requirements, debt service and other obligations when required, (d) we
will be able to access such cash flow, or (e) we will not incur losses from our
exposure to exchange rate fluctuations or be adversely affected by interest rate
fluctuations.

The accreted value at March 31, 2001 of our consolidated long-term
indebtedness was $12,101.2 million, representing approximately 59.4% of total
capitalization. The following summarizes the terms of those notes issued by us
and our subsidiaries (including the 6 3/4% convertible notes issued by us and
NTL Incorporated in May 2001) and our credit facilities.

NTL COMMUNICATIONS:

(1) 12 3/4% Senior Deferred Coupon Notes due April 15, 2005, principal
amount at maturity of $277.8 million; interest payable semiannually
from October 15, 2000; redeemable at the option of NTL Communications
on or after April 15, 2000;

(2) 11 1/2% Senior Deferred Coupon Notes due February 1, 2006; principal
amount at maturity of $1,050.0 million; interest payable semiannually
beginning on August 1, 2001; redeemable at the option of NTL
Communications on or after February 1, 2001;

(3) 10% Senior Notes due February 15, 2007, principal amount at maturity
of $400.0 million; interest payable semiannually from August 15, 1997;
redeemable at the option of NTL Communications on or after February
15, 2002;

(4) 9 1/2% Senior Sterling Notes due April 1, 2008, principal amount at
maturity of L125.0 million ($177.4 million); interest payable
semiannually from October 1, 1998; redeemable at the option of NTL
Communications on or after April 1, 2003;

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(5) 10 3/4% Senior Deferred Coupon Sterling Notes due April 1, 2008,
principal amount at maturity of L300.0 million ($425.7 million);
interest payable semiannually beginning on October 1, 2003; redeemable
at the option of NTL Communications on or after April 1, 2003;

(6) 9 3/4% Senior Deferred Coupon Notes due April 1, 2008, principal
amount at maturity of $1,300.0 million; interest payable semiannually
beginning on October 1, 2003; redeemable at the option of NTL
Communications on or after April 1, 2003;

(7) 9 3/4% Senior Deferred Coupon Sterling Notes due April 15, 2009,
principal amount at maturity of L330.0 million ($468.3 million);
interest payable semiannually beginning on October 15, 2004;
redeemable at the option of NTL Communications on or after April 15,
2004;

(8) 11 1/2% Senior Notes due October 1, 2008, principal amount at maturity
of $625.0 million; interest payable semiannually from April 1, 1999;
redeemable at the option of NTL Communications on or after October 1,
2003;

(9) 12 3/8% Senior Deferred Coupon Notes due October 1, 2008, principal
amount at maturity of $450.0 million; interest payable semiannually
beginning on April 1, 2004; redeemable at the option of NTL
Communications on or after October 1, 2003;

(10) 7% Convertible Subordinated Notes due December 15, 2008, principal
amount at maturity of $489.8 million; interest payable semiannually
from June 15, 1999; convertible into shares of NTL Incorporated common
stock at a conversion price of $39.20 per share; redeemable at the
option of NTL Communications on or after December 15, 2001;

(11) 9 1/4% Senior Euro Notes due November 15, 2006, principal amount at
maturity of E250.0 million ($219.9 million); interest payable
semiannually from May 15, 2000;

(12) 9 7/8% Senior Euro Notes due November 15, 2009, principal amount at
maturity of E350.0 million ($307.8 million); interest payable
semiannually from May 15, 2000; redeemable at the option of NTL
Communications on or after November 15, 2004;

(13) 11 1/2% Senior Deferred Coupon Euro Notes due November 15, 2009,
principal amount at maturity of E210.0 million ($184.7 million);
interest payable semiannually beginning on May 15, 2005; redeemable at
the option of NTL Communications on or after November 15, 2004;

(14) 11 7/8% Senior Notes due October 1, 2010, principal amount at maturity
of $500.0 million; interest payable semiannually beginning on April 1,
2001; redeemable at the option of NTL Communications on or after
October 1, 2005;

(15) 12 3/8% Senior Euro Notes due February 1, 2008, principal amount at
maturity E300.0 million ($263.8 million); interest payable
semiannually beginning on August 1, 2001;

(16) 6 3/4% Convertible Senior Notes due May 15, 2008, principal amount at
maturity $1,150.0 million; interest payable semiannually beginning on
November 15, 2001; convertible into shares of NTL Incorporated common
stock at a conversion price of $32.728 per share; redeemable at the
option of NTL Communications or NTL Incorporated after May 20, 2004;
NTL Incorporated is a co-obligor of the notes on a subordinated basis.

NTLCL:

(17) Credit Agreement of L1,300.0 million ($1,844.7 million), no amounts
were outstanding as of March 31, 2001; no amounts were outstanding as
of May 31, 2001; interest payable at least every six months at LIBOR
plus a margin rate of 4.5% per annum, which is subject to adjustment;
the unused portion of the commitment is subject to a commitment fee of
0.75% payable quarterly; principal is due in full on March 31, 2006;
pursuant to the credit agreement, following the issuance in October
2000 of

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$500.0 million aggregate principal amount of NTL Communication's 11 7/8%
senior notes and the issuance in January and February 2001 of E300.0
million aggregate principal amount of NTL Communications' 12 3/8% senior
notes, the commitment was reduced by L255.1 million ($362.0 million);
following the issuance in May 2001 of the 6 3/4% convertible senior
notes of NTL Communications and NTL Incorporated, the commitment was
further reduced by L456.0 million ($647.1 million) and as a result, the
commitment under this facility is now L588.9 million ($835.6 million);

(18) Credit Agreement of L2,500.0 million ($3,547.5 million), of which
L2,500.0 million ($3,547.5 million) was outstanding at March 31, 2001;
interest payable at least every six months at LIBOR plus a margin rate
of 2.25% per annum, which is subject to adjustment; effective interest
rate of 8.03% at March 31, 2001; 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;
principal is due in six quarterly installments beginning on June 30,
2004;

NTL TRIANGLE:

(19) 11.2% Senior Discount Debentures due November 15, 2007, principal
amount at maturity of $517.3 million, interest payable semiannually
beginning on May 15, 2001; redeemable at NTL Triangle's option after
November 15, 2000;

DIAMOND:

(20) 13 1/4% Senior Discount Notes due September 30, 2004, principal amount
at maturity of $285.1 million; interest payable semiannually from
March 31, 2000; redeemable at Diamond's option after September 30,
1999;

(21) 11 3/4% Senior Discount Notes due December 15, 2005, principal amount
at maturity of $531.0 million; interest payable semiannually beginning
on June 15, 2001; redeemable at Diamond's option on or after December
15, 2000;

(22) 10 3/4% Senior Discount Notes due February 15, 2007, principal amount
at maturity of $420.5 million; interest payable semiannually beginning
on August 15, 2002; redeemable at Diamond's option on or after
December 15, 2002;

(23) 10% Senior Sterling Notes due February 1, 2008, issued by Diamond
Holdings plc, a wholly-owned subsidiary of Diamond, principal amount
at maturity of L135.0 million ($191.6 million); interest payable
semiannually from August 1, 1998; redeemable at Diamond's option on or
after February 1, 2003; and

(24) 9 1/8% Senior Notes due February 1, 2008, issued by Diamond Holdings
plc, principal amount at maturity of $110.0 million; interest payable
semiannually from August 1, 1998; redeemable at Diamond's option on or
after February 1, 2003.

Management does not anticipate that we will generate sufficient cash flow
from operations to repay at maturity the entire principal amount of our
outstanding consolidated indebtedness. Accordingly, we may be required to
consider a number of measures, including: (a) refinancing all or a portion of
such indebtedness, (b) seeking modifications to the terms of such indebtedness,
(c) seeking additional debt financing, which may be subject to obtaining
necessary lender consents, (d) seeking additional equity financing, or (e) a
combination of the foregoing. There can be no assurance that financing will be
available on acceptable terms or at all.

Our operations are conducted through our direct and indirect wholly-owned
subsidiaries. As a holding company, we hold no significant assets other than
cash and our investments in and advances to our subsidiaries. Accordingly, our
ability to make scheduled interest and principal payments when due to holders of
our indebtedness may be dependent upon the receipt of sufficient funds from our
subsidiaries.

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Cash used in operating activities was $160.3 million and $1.7 million in
the three months ended March 31, 2001 and 2000, respectively. Cash paid for
interest exclusive of amounts capitalized in the three months ended March 31,
2001 and 2000 was $164.4 million and $90.0 million, respectively. The remainder
of this change is primarily due to the increase in the net loss and changes in
working capital as a result of the timing of receipts and disbursements.

Purchases of fixed assets were $542.0 million in the three months ended
March 31, 2001 and $356.9 million in the three months ended March 31, 2000 as a
result of the continuing fixed asset purchases and construction, including
purchases and construction by acquired companies.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK

We are exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. We do not enter into derivatives financial
instruments for trading or speculative purposes. We have entered into derivative
financial instruments to hedge exposure to movements in the pound sterling/U.S.
dollar exchange rate and the Euro/pound sterling exchange rate. The
counterparties are major financial institutions.

FOREIGN EXCHANGE CONTRACTS

To the extent that we obtain financing in U.S. dollars and incur
construction and operation costs in various other currencies, we will encounter
currency exchange rate risks. Furthermore, our revenues are generated in foreign
currencies while our interest and principal obligations with respect to most of
our existing indebtedness are payable in U.S. dollars.

We have entered into cross currency swaps to hedge exposure to movements in
the pound sterling to U.S. dollar exchange rate with a notional amount of L97.0
million at March 31, 2001. We have also entered into cross currency swaps to
hedge exposure to movements in the Euro to pound sterling exchange rate with a
notional amount of E143.6 million at March 31, 2001.

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43

INTEREST RATES

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

The following table provides information about our long-term fixed and
floating interest rate debt and derivative financial instruments that are
sensitive to changes in interest rates and foreign currency exchange rates. The
table does not include the $1,150.0 million 6 3/4% convertible senior notes due
2008 issued in May 2001.

NINE
MONTHS YEAR YEAR YEAR YEAR YEAR
ENDING ENDING ENDING ENDING ENDING ENDING
12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 THEREAFTER TOTAL
-------- -------- -------- ----------- ----------- ----------- ---------- ---------
(IN MILLIONS)

Long-term Debt,
Including Current
Portion
U.S. dollars
Fixed rate........... -- -- -- $ 285.1 $ 808.8 $ 1,050.0 $ 4,812.6 $ 6,956.5
Average interest
rate............... 13.25% 12.09% 11.50% 10.41%
UK pound
Fixed rate........... -- -- -- -- -- -- L890.0 L890.0
Average interest
rate............... 10.09%
Average forward
exchange rate...... 1.5033
Euro
Fixed rate........... -- -- -- -- -- E250.0 E860.0 E1,110.0
Average interest
rate............... 9.25% 11.14%
Average forward
exchange rate...... .9588 .9677
UK pound
Variable rate........ -- -- -- L90.0 L2,410.0 -- -- L2,500.0
Average interest
rate............... LIBOR LIBOR
plus 2.25% plus 2.25%
Average forward
exchange rate...... 1.4853 1.4891
Currency Swap
Agreements Related to
Long-Term Debt
Receipt of U.S. dollars
Notional UK pound
amount............. L97.0 -- -- -- -- -- -- L97.0
Average contract
rate............... 1.4780
Receipt of UK pounds
Notional Euro
amount............. E67.3 E76.3 -- -- -- -- -- E143.6
Average contract
rate............... .6346 .6457

FAIR VALUE
03/31/01
----------
(IN
MILLIONS)

Long-term Debt,
Including Current
Portion
U.S. dollars
Fixed rate........... $ 5,592.1
Average interest
rate...............
UK pound
Fixed rate........... L549.3
Average interest
rate...............
Average forward
exchange rate......
Euro
Fixed rate........... E756.3
Average interest
rate...............
Average forward
exchange rate......
UK pound
Variable rate........ L2,500.0
Average interest
rate...............
Average forward
exchange rate......
Currency Swap
Agreements Related to
Long-Term Debt
Receipt of U.S. dollars
Notional UK pound
amount............. L4.5
Average contract
rate...............
Receipt of UK pounds
Notional Euro
amount............. E(4.1)
Average contract
rate...............

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44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF CONSUMERCO

The following discussion should be read in conjunction with ConsumerCo's
financial statements, including the notes to such financial statements, which
are included in this prospectus. These financial statements were prepared in
accordance with U.K. generally accepted accounting principles, which differ in
certain significant respects from U.S. generally accepted accounting principles.
The principal differences between U.K. generally accepted accounting principles
and U.S. generally accepted accounting principles, as they relate to ConsumerCo,
are described, and reconciliations of net loss and shareholders' equity to U.S.
generally accepted accounting principles are set out, at note 35 to the
financial statements of ConsumerCo.

YEARS ENDED MARCH 31, 2000, 1999 AND 1998

RESULTS OF OPERATIONS

The activities of ConsumerCo were carried out on an integrated basis as
part of the Cable & Wireless Communications group, and, as a result, the
operations for the periods presented comprising ConsumerCo have been carved out
from the financial statements of Cable & Wireless Communications. Consequently,
certain revenues, costs, assets and liabilities reported within legal entities
that make up Cable & Wireless Communications have been allocated to ConsumerCo.

To the extent available, the following discussion analyzes turnover for the
business units of Cable & Wireless Communications that represent the operations
of ConsumerCo. Cable & Wireless Communications has until recently operated in
four principal segments: consumer markets; business markets; corporate markets;
and international & partner services. Consumer markets and a portion of business
markets make up ConsumerCo. International partner services, corporate markets
and the remainder of business markets make up DataCo.

Cable & Wireless Communications was formed in 1997 through the combination
of:

(1) Mercury Communications Limited, which is considered the predecessor
entity to Cable & Wireless Communications;

(2) Bell Cablemedia plc, as enlarged by its acquisition of Videotron
Holdings plc; and

(3) NYNEX CableComms Group plc and NYNEX CableComms Group Inc.

The results of ConsumerCo for the fiscal year 1998 reflect those results of
Cable & Wireless Communications (Mercury) relating to indirect residential
telephony that have been allocated to ConsumerCo for the full year and of Bell
Cablemedia and the NYNEX CableComms Group plc commencing April 28, 1997.

Turnover. Turnover derives from local, national and international
telecommunications and cable television services and the sale and rental of
telecommunications equipment. The table below sets forth ConsumerCo's turnover
by principal categories of service for each of the years ended March 31, 2000,
1999 and 1998.

YEAR ENDED MARCH 31,
--------------------
2000 1999 1998
---- ---- ----
(IN MILLIONS)

Consumer Markets
Direct telephony.......................................... L279 L292 L219
Indirect telephony........................................ 93 102 104
Cable television.......................................... 253 222 172
---- ---- ----
Total Consumer Markets...................................... 625 616 495
Business Markets............................................ 69 72 55
---- ---- ----
Turnover.................................................... L694 L688 L550
==== ==== ====

Total turnover remained relatively unchanged with an increase of 0.9% to
L694 million in the year ended March 31, 2000 from L688 million in the year
ended March 31, 1999. Total turnover increased by 25.1% to L688 million in the
year ended March 31, 1999 from L550 million in the year ended March 31, 1998.
This growth was

40
45

generated principally by increases in turnover in consumer markets of 24.4% and
in business markets of 30.9%. In the three years ended March 31, 2000, all of
the turnover was generated by operations in the United Kingdom.

Consumer markets. Turnover remained stable with an increase of 1.4% in the
year ended March 31, 2000 to L625 million compared with L616 million for the
year ended March 31, 1999. Revenue from cable television improved by 14.0% from
L222 million in the year ended March 31, 1999 to L253 million in the year ended
March 31, 2000 as a result of increased penetration and the rollout of the
digital cable television service. This increase was offset by declines in both
direct and indirect telephony revenue.

In the year ended March 31, 2000, the number of dual customers, those
taking both cable television and telephony services, increased by 18% to
781,000. At March 31, 2000, ConsumerCo provided direct telephony, Internet
and/or multichannel television services to 1.2 million U.K. homes and had local
cable networks which passed approximately 4.3 million homes. The number of
direct telephony lines was approximately 1.1 million at March 31, 2000. Average
monthly revenue per direct customer was L38.87 for the three months ended March
31, 2000.

In July 1999, ConsumerCo commenced the rollout of its digital cable
television services. At March 31, 2000 the number of digital cable television
subscribers was 140,000.

Turnover grew 24.4% in the year ended March 31, 1999 to L616 million
compared with L495 million for the year ended March 31, 1998. This was
principally due to improved penetration and increased revenue per subscriber.
The number of dual customers, those taking both cable television and telephony
services, increased by 10% to 660,000. At March 31, 1999, ConsumerCo provided
direct telephony, internet and/or multichannel television services to 1.2
million U.K. homes and had local cable networks which passed approximately 4.3
million homes. Average monthly revenue per direct customer was L37.45 for the
three months ending March 31, 1999.

In the year ended March 31, 1999, growth of Internet traffic offset a
decline in international call revenue to keep revenue from indirect telephony
stable at L102 million. At March 31, 1999, the business unit as an Internet
service provider had over 100,000 subscribers. An indication of the importance
of the Internet is that in the fourth quarter, local rate dial-up calls
accounted for around 20% of total minutes billed by consumer markets.

Business markets. ConsumerCo revenues related to business markets, which
stem primarily from business direct telephony and data and business cable
television, fell 4.2% from L72 million in the year ended March 31, 1999 to L69
million for the year ended March 31, 2000. ConsumerCo revenues related to
business markets grew 30.9% from L55 million in the year ended March 31, 1998 to
L72 million for the year ended March 31, 1999.

Operating costs. For the year ended March 31, 2000 total operating costs
increased by 10.0% over the corresponding period in 1999, and total operating
costs as a percentage of turnover rose to 101.8% from 93.4% in 1999. For the
year ended March 31, 1999, total operating costs increased by 31.2% over the
corresponding period in 1998, and total operating costs as a percentage of
turnover rose to 93.4% from 89.1% in 1998.

Operating costs for the year ended March 31, 2000 include L12 million in
respect of millennium costs allocated to ConsumerCo through Cable & Wireless
Communications Group's Year 2000 Program. This cost relates to a one-off
project. Expenditure of L15 million was incurred in respect of millennium costs
in 1999 and L1 million was incurred in respect of national code number change
costs: both costs relate to one-off projects. Expenditure of L2 million was
incurred in respect of millennium costs in 1998. Excluding the impact of these
one-off projects, total operating costs fell from 91.1% of turnover in 1998 to
88.7% of turnover in 1999 and rose to 100.1% of turnover in 2000.

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46

The following table sets out for each of the years in the three-year period
ended March 31, 2000 operating costs broken down by major categories and
expressed as a percentage of total turnover.

YEAR ENDED MARCH 31,
-----------------------------------------
2000 1999 1998
----------- ----------- -----------
(L IN MILLIONS)

Telecommunication outpayments and other costs of
sales.......................................... L269 39% L251 36% L188 34%
Depreciation and amortization.................... 156 22 135 20 103 19
Other operating expenses (net)................... 282 41 257 37 199 36
---- --- ---- --- ---- ---
Total operating costs............................ L707 102% L643 93% L490 89%
==== === ==== === ==== ===

Telecommunications outpayments and other cost of sales. Telecommunications
outpayments and other costs of sales consist principally of charges paid to
other telecommunication administrations and carriers either for traffic
generated by ConsumerCo's customers and carried over the networks of such
entities or for traffic not originated by ConsumerCo's customers but transmitted
through Cable & Wireless Communications' network to such entities.

Telecommunications outpayments and other costs of sales increased by L18
million or 7.2% in the year ended March 31, 2000 compared to the year ended
March 31, 1999. This increase reflects growth in turnover and increased costs in
business telephony. Telecommunications outpayments and other costs of sales
increased by L63 million or 33.5% in the year ended March 31, 1999 compared to
the year ended March 31, 1998. This largely reflects increased turnover, but is
also partially due to the inclusion in the results for the year ended March 31,
1999 of a full year's costs for Bell Cablemedia, Videotron Holdings, NYNEX
CableComms Group plc and NYNEX CableComms Group Inc., compared to 11 months'
costs in the year ended March 31, 1998.

Charges payable by ConsumerCo to British Telecommunications for the
conveyance of traffic and connections to the British Telecommunications network
are subject to government regulation in the form of a determination by OFTEL.
During 1998, the basis for calculation of these charges changed from one based
on the fully allocated historic cost of providing the delivery mechanism on
their network, to one based upon the long-run incremental cost of providing that
service. Until September 30, 1997, OFTEL undertook a review, in the form of a
determination, after the end of each financial year and for the half year to
September 30, 1997, to assess the bases used for the calculation of the charges
made in that year. Amendments were backdated to take effect from April 1, in the
year under review, but were accounted for in subsequent financial periods. Since
October 1, 1997, the charging mechanism has been designed to reflect the
commercial considerations surrounding a competitive market. OFTEL has set a
framework of controls within which British Telecommunications will have the
price flexibility to set its own charges. The degree of control will depend on
the competitiveness of the services concerned.

Depreciation. Depreciation increased by 15.6% in the year ended March 31,
2000 partly due to ConsumerCo's continuing investment in network infrastructure.
Growth in depreciation of 31.1% in the year ended March 31, 1999 also reflects
continuing investment in network infrastructure as well as the inclusion of a
full year's charge in respect of Bell Cablemedia and the NYNEX CableComms Group
compared to 11 months' charge in the year ended March 31, 1998.

Net other operating expenses. Net other operating expenses were L282
million in the year ended March 31, 2000 up from L257 million in the year ended
March 31, 1999. This is partially due to the increased costs incurred in the
rollout of ConsumerCo's digital cable television service. Costs for the year
ended March 31, 2000 also include L12 million in respect of millennium costs, a
one-off project.

Net other operating expenses were L257 million in the year ended March 31,
1999, up from L199 million in the year ended March 31, 1998. This is partially
due to the inclusion in the results for the year ended March 31, 1999 of a full
year's costs for Bell Cablemedia and the NYNEX CableComms Group compared to 11
months' costs in the year ended March 31, 1998. Costs for the year ended March
31, 1999 also include L15 million in respect of millennium costs, and L1 million
in respect of national code number change costs, both one-off projects. In the
year ended March 31, 1998, L2 million was incurred in respect of millennium
costs.

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47

Within other operating costs, employee costs were L80 million in the year
ended March 31, 2000, and 5,262 staff were employed in relation to the
operations of ConsumerCo. In the year ended March 31, 1999, employee costs were
L96 million, and 5,130 staff were employed in connection with ConsumerCo. In the
year ended March 31, 1998, employee costs were L87 million, and 5,407 staff were
employed in connection with ConsumerCo.

Costs of reorganization. Following the formation of Cable & Wireless
Communications in 1997, the nature and focus of operations of the constituent
companies were fundamentally reorganized. Costs of L96 million incurred in the
reorganization have been allocated to ConsumerCo and include branding,
employee-related costs such as redundancies and property rationalizations. In
the year ended March 31, 2000, the remaining unused provision of L2 million was
released in the profit and loss account.

The inclusion of the costs of the fundamental reorganization had no
material impact on the tax charge for 2000, 1999 or 1998.

Net interest. Net interest payable increased to L190 million in the year
ended March 31, 2000 from L179 million in the year ended March 31, 1999. Net
interest payable increased to L179 million in the year ended March 31, 1999 from
L121 million in the year ended March 31, 1998. The increases in interest costs
resulted from increased borrowing to fund ConsumerCo's continuing investment in
network infrastructure.

Loss before income taxes and minority interest. In the year ended March
31, 2000, ConsumerCo recorded a loss before taxes and minority interest of L200
million, an increase of 49.3% from the year ended March 31, 1999, resulting from
the extensive investment in the rollout of its digital cable television
services.

Losses before taxes and minority interest decreased by 14.6% to L134
million for the year ended March 31, 1999 from L157 million for the year ended
March 31, 1998, reflecting growth in the business, partially offset by
millennium and national code change costs.

Taxation. During the year ended March 31, 2000, a tax credit was received
by ConsumerCo. This reflects payments totalling L34 million from DataCo for
losses surrendered by way of group relief. In the years ended March 31, 1999 and
1998, no taxes were payable, resulting from offsetting, in large part, the
losses of the Bell Cablemedia, Videotron Holdings, NYNEX CableComms Group plc
and NYNEX CableComms Group Inc. against the taxable profits in Cable & Wireless
Communications (Mercury), the relatively high capital expenditure and the
deduction for certain reorganization costs. Capital expenditure in the three
years ended March 31, 2000 was at a level that ensured the effective rate of tax
was below the standard U.K. corporation tax rate. The continuing levels of
capital expenditure by ConsumerCo are such that no provisions for deferred
taxation under U.K. generally accepted accounting principles are necessary.

U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES RECONCILIATION

ConsumerCo prepares its consolidated financial statements in accordance
with U.K. generally accepted accounting principles, which differs in significant
respects from U.S. generally accepted accounting principles. The principal
differences between U.K. generally accepted accounting principles and U.S.
generally accepted accounting principles as they relate to ConsumerCo include
the methods of accounting for goodwill, the method of capitalizing interest and
the treatment of deferred income tax. Net loss under U.S. generally accepted
accounting principles was L273 million for the year ended March 31, 2000. Net
loss under U.S. generally accepted accounting principles was higher than that
reported under U.K. generally accepted accounting principles by L108 million for
the year ended March 31, 2000. Net loss under U.S. generally accepted accounting
principles was L236 million for the year ended March 31, 1999. Net loss under
U.S. generally accepted accounting principles was higher than that reported
under U.K. generally accepted accounting principles by L101 million for the year
ended March 31, 1999.

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48

Shareholders' equity under U.S. generally accepted accounting principles
was L1,710 million higher than under U.K. generally accepted account principles
at March 31, 2000. At March 31, 1999, shareholders' equity under U.S. generally
accepted accounting principles was L1,818 million higher than under U.K.
generally accepted accounting principles. See note 35 of the notes to the
ConsumerCo financial statements included in this prospectus.

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49

BUSINESS

NTL is one of the leading broadband communications and broadband services
companies in the United Kingdom and the Republic of Ireland.

Our predominant lines of business are:

- CONSUMER SERVICES, delivering broadband services to residential markets
comprising residential telephone, analog and digital cable television,
narrowband and broadband Internet access and interactive services.

- BUSINESS SERVICES, comprising business telecommunications, national and
international carrier telecommunications, Internet services and radio
communication services.

- BROADCAST TRANSMISSION AND TOWER SERVICES, comprising digital and analog
television and radio broadcast transmission services, wireless network
management, tower site rental and satellite and media services.

We provide our broad range of services over local, national and
international network infrastructure. This network infrastructure consists of:

- BROADBAND COMMUNICATIONS NETWORKS in the United Kingdom that currently
pass approximately 8.4 million homes and which we plan to expand to
cover nearly 11.4 million homes in our regional U.K. franchise areas.
These high-capacity two-way local broadband fiber networks serve entire
communities throughout these regional franchise areas. Our fiber optic
cables pass nearly every business and are connected to distribution
points, or nodes, which are typically within approximately 500 meters of
each of the 500 homes typically served by each node. Each home is then
connected by a siamese cable consisting of two copper pair telephone
wires and a coaxial cable, allowing us to deliver telephone, cable
television and Internet services over a single integrated network. This
siamese cable also allows us to deploy both cable modems and digital
subscriber line technology for the provision of broadband communications
services.

Additionally, we have a broadband cable network in the Republic of
Ireland. This primarily analog cable television networks are in the
process of being upgraded to allow for higher capacity signals and a
suite of new products including digital television, cable modem Internet
access and voice telephony.

- A NATIONAL/INTERNATIONAL SYNCHRONOUS DIGITAL HIERARCHY, KNOWN AS SDH,
FIBER OPTIC TELECOMMUNICATIONS NETWORK in the United Kingdom which
connects all of the major population centers in the United Kingdom to
Ireland, Continental Europe and the United States. SDH allows high speed
data transmission and redirects transmissions in the event of a problem
to prevent any disruption. This 7,800 kilometer backbone network
utilizes Asynchronous Transfer Mode, known as ATM, technology, a
high-speed high-bandwidth technology, and was built with sufficient duct
capacity to accommodate over 2,300 fibers on the majority of the
network. We designed this network to allow us to place the active
components, such as routing devices, at the edge of our network and
close to our customers. This design should create an opportunity to
reduce our costs while increasing our ability to offer a broad range of
voice and data solutions.

- A NATIONAL BROADCAST TRANSMISSION AND TOWER NETWORK INFRASTRUCTURE IN
THE UNITED KINGDOM, which provides national, regional and local
broadcast and wireless communications coverage. We own, lease, manage,
or have access to, 2,875 sites in the United Kingdom. Our fixed line and
tower networks in the United Kingdom are interconnected at numerous
sites.

Our objective is to exploit the convergence of the telecommunications,
entertainment and information services industries to become the leading full
service broadband communications company in the markets in which we operate. We
offer services to residential, business and wholesale customers on a national
and an international scale. We believe that we will be able to deliver our
strategy through our entrepreneurial approach, innovative marketing,
state-of-the-art networks and technical excellence.

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50

OPERATING HIGHLIGHTS: CUSTOMER STATISTICS

The following table illustrates our broadband position in the United
Kingdom and Ireland:

UNITED KINGDOM AND IRELAND CUSTOMER STATISTICS AS AT MARCH 31, 2001 (IN
THOUSANDS)

(UNITED KINGDOM) (IRELAND) NTL UNITED KINGDOM
NTL CABLELINK AND IRELAND
---------------- --------- ------------------

Homes in Franchise............................. 11,411.2 420.0 11,831.2
Homes passed................................... 8,404.1 419.4 8,823.5
Homes marketed (Telco)......................... 7,472.3 20.0 7,492.3
Homes marketed (Cable TV)...................... 7,695.8 419.4 8,115.2
Homes marketed (Ethernet)...................... -- -- --
Customers (On-Net)............................. 2,849.8 370.6 3,220.4
Single RGU................................... 828.6 367.1 1,195.7
Dual/Triple RGU.............................. 2,021.2 3.5 2,024.7
Cable Television............................... 2,311.5 370.6 2,682.1
Digital...................................... 757.3 -- 757.3
Telephone (Direct)............................. 2,559.5 3.5 2,563.0
Broadband Internet............................. 26.3 -- 26.3
RGUs........................................... 4,897.3 374.1 5,271.4
Internet Subscribers........................... 1,953.3 -- 1,953.3
Wholesale.................................... 1,043.3 -- 1,043.3
ntlworld..................................... 602.4 -- 602.4
Telephone (Indirect)........................... 435.2 -- 435.2
Residential Customers.......................... 4,328.3 370.6 4,698.9
Residential Services........................... 7,259.5 374.1 7,633.6
Business Customers............................. 76.6 1.0 77.6
PENETRATION
CATV........................................... 30.0% 88.4% 33.1%
Telephone...................................... 34.3% nm 34.2%
Customer....................................... 37.0% 88.4% 39.7%
RGU............................................ 63.6% 89.2% 65.0%
Dual/Triple.................................... 70.9% 0.9% 62.9%

NTL INCORPORATED'S EUROPEAN STRATEGY

NTL Incorporated, the ultimate parent company of NTL Communications has
made several strategic investments in leading European markets during the last
two years. NTL Incorporated's objective in expanding into Continental Europe is
to replicate our success in the United Kingdom and create Europe's leading
broadband communications company.

In two steps during August 1999 and December 1999, NTL Incorporated
acquired the "1G" Networks in France, its first acquisition on the Continent,
acquiring approximately 266,000 franchise homes in the Greater Paris area. In
March 2000, NTL Incorporated completed the purchase of the cable assets of the
Cablecom Group, Switzerland's largest cable company. Also from March 2000
through May 2001, NTL Incorporated acquired a 41% interest in B2 Bredand AB
(formerly Svenska Bredbandsbolaget A.B.) or "B2", a company based in
Scandinavia, which is deploying fiber directly to the customer site throughout
Sweden and Norway. In August 2000, we acquired a 50% interest in eKabel L.P.,
which owns 65% of eKabel Holdings GmbH, which owns the cable network in Hessen,
Germany. Finally in May 2001, NTL Incorporated completed a 27% minority
investment in Noos, S.A., the market leading French broadband company.

NTL Incorporated's European strategy has four key components:

- Acquire well-positioned cable companies in major markets with attractive
demographic characteristics;

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51

- Upgrade network infrastructure for delivery of advanced broadband
solutions to consumers and businesses;

- Replicate our success with bundled services in the United Kingdom in
order to drive penetration of new products and maximize profitability per
subscriber; and

- Realize economies of scale through continued integration while
maintaining a regional focus on customer operations.

These investments to date highlight NTL Incorporated's strategy of focusing
European investment activity in desirable communications markets. NTL
Incorporated and its subsidiaries have a premier footprint across Europe,
including:

- Europe's three largest financial centers -- London, Paris and Frankfurt;

- Europe's wealthiest population -- Switzerland; and

- Europe's most advanced broadband market -- Sweden.

These investments offer substantial opportunities for growth by building on
our considerable market expertise and success in marketing and promoting
communication services in the United Kingdom. NTL Incorporated's goal in these
markets is to grow revenues from bundled subscriptions of digital cable
television, high-speed Internet and telephony services using our experience in
driving take-up through product bundling, value propositions, greater choice and
high levels of customer service. After giving effect to announced transactions
at March 31, 2001 NTL Incorporated and its subsidiaries had access, on a gross
basis, to 20.3 million homes across the United Kingdom, Ireland and Continental
Europe, and served approximately 8.5 million customers.

Each of NTL Incorporated's subsidiaries and investments in Europe has
experienced management teams. NTL Incorporated expects to continue emphasizing
local management teams, as this has been one of the hallmarks of our success in
the United Kingdom. To ensure a consistent and focused execution across all the
investments in Europe, NTL Incorporated recently assembled a management team
solely focused on overseeing and managing its operations and investments in
Europe. Bruno Claude has recently joined NTL as Chief Operating Officer Europe.
Steve Wagner and Hamid Heidary have also joined the European team as Managing
Director Consumer Services and Chief Technology Officer, respectively. Together,
Steve and Hamid have been in senior positions with NTL for over 14 years.

NTL'S BUSINESSES IN THE UNITED KINGDOM

We have expanded our U.K. operations significantly over the last few years,
predominantly through acquisitions. Between October 1998 and July 1999 we
acquired the U.K. broadband operations of Comcast U.K. Cable Partners, Diamond
Cable and ComTel as well as the Westminster and Milton Keynes cable franchises
of British Telecommunications plc, or BT. In May 2000, we dramatically increased
our U.K. operations by completing our acquisition of the residential broadband
and business cable operations of Cable & Wireless Communications, now known as
ConsumerCo.

In the United Kingdom, we provide a broad range of communication services:

- BUSINESS SERVICES, comprising business telecommunications, national and
international carrier telecommunications, Internet services and radio
communication services.

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52

CONSUMER SERVICES

We are the largest provider of broadband services in the United Kingdom. As
of March 31, 2001, we had approximately 2.8 million residential cable television
and telephony customers and over 4.9 million revenue generating units, which we
refer to as RGUs. At that date, our penetration rates were approximately 34%
telephone penetration, 30% cable television penetration and 37% customer
penetration. The average monthly churn across all of our U.K. operations during
the first quarter of 2001 was 1.5%.

We believe the most effective strategy to maximize revenues and penetration
for our residential offering is to bundle together telephone, cable television
and Internet services. Our product and pricing strategies emphasize choice,
value and quality and are designed to encourage subscription to multiple
services to maximize customer retention and average revenue per customer. We
believe our customers want a value proposition based upon packages of services.

NTL's Local Network in the United Kingdom

Including contributions made by the companies and businesses acquired by
NTL, the NTL U.K. group has spent approximately $11.2 billion on our network
infrastructure.

Our core network consists of optic fiber provided to distribution points,
or nodes, each serving up to 500 homes from where we provide coaxial cable and
two copper pair telephone wires into each home. This cabling enables the
provision of two telephone lines and television service into each customer's
home.

Our fiber network has the capability to carry plain ordinary telephone
services as well as high-speed data services such as an integrated services
digital network, or ISDN. The fiber network is also capable of supporting
digital subscriber lines, or DSL, which consists of a bi-directional 2Mb/s
connection capable of supporting 30 voice channels that enables the provision of
higher capacity services to business customers. Weare able to support digital
and interactive services as well as advanced video services over our network
through cable modems that enable Internet access at almost 10 times the speed of
conventional dial up access.

Through our cable modem program we are developing an additional set of
features which will support people who work from home and small businesses,
including enabling a link to a company's local area network, or LAN. We have
begun to construct and upgrade parts of our network to utilize the next
generation of network technology using Internet protocol, or IP, over optic
fiber cable technology. This technology, in which data is broken up into
discrete packets for transmission, enables more efficient use of network
capacity by removing bottlenecks created by conventional technology where data
is routed in a single stream from point to point.

The home distribution points are on average between 80 to 100 meters from
the customer's home. This relatively short distance improves transmission
quality by minimizing the need to install amplifiers which can distort signal
quality between a distribution point and a customer's home. This fiber-based
network provides a higher level of quality and service, because there is more
bandwidth from running fiber down to 500 home nodes compared with 2,500 home
nodes in the U.S.

Fiber To the Apartment/Fiber To the Home

We are in the process of developing a pilot program to bring fiber directly
into the homes of our customers. As part of this pilot program, we have deployed
fiber to a large block of apartments in the Pimlico district of Central London.
The fiber provides a high speed 10 Mb/s (Ethernet) connection to the Internet
with the ability to upgrade the throughput to individual apartments to 100 Mb/s.
If telephone modems are defined as the first generation of residential data
communications technology and cable modems/ADSL technologies are defined as
second generation technologies, then the fiber to the apartment technology we
have launched in Pimlico would be defined as the third generation of high speed
Internet to the home.

Franchise Customers

We first introduced a bundled cable service to our franchise customers in
1996, when we implemented a promotional pricing and packaging structure called
"Choices." Since then, we have continued to refine and

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enhance our offering. The packages we currently offer to our U.K. residential
franchise customers, excluding customers in Milton Keynes and Westminster and in
ConsumerCo franchises which only offer cable television, comprise:

- telephone service, including a second telephone line for an additional
charge unless the customer decides not to take television;

- narrowband Internet access service;

- broadband Internet access service, if the customer takes an additional
service;

- all of the current terrestrial television channels and access to
multi-channel television, including pay per view; and

- interactive television services.

Prices vary by package, but are typically below those of the equivalent
offerings of competitors. The packages are designed to provide customers with
the opportunity to add services according to their individual tastes and to
change various aspects of the bundle to meet their needs.

Cable Television

The selection of analog cable channels that we currently offer to our
franchise customers varies based on the particular franchise area. This
variation is a result of the different channel offerings we have inherited as a
result of our acquisitions of various cable franchises over the past several
years. Variance between franchise areas will increasingly be removed as digital
cable television is rolled-out offering the same channels, subject to regional
programming variations. In addition to offering many of the popular channels
available on BSkyB's satellite platform, we also offer to all of our franchise
customers, through our joint venture with Telewest, a cable-only movie, sport
and special events pay per view television service called "Front Row" that we
rolled-out to our customers beginning in March 1998. Our joint venture with
Telewest represented the first ever alternative in the United Kingdom to BSkyB
in the provision of films and sports events through pay television. Front Row
has signed content output contracts with major Hollywood studios, including
Warner Brothers, Sony Pictures Entertainment (Columbia/Tri-Star), the Walt
Disney Company (Walt Disney Studios, Miramax, Hollywood Pictures and
Touchstone), Dreamworks, MGM and Universal.

ConsumerCo launched digital cable television in July 1999 in some of its
franchise areas. In May 2000, we launched digital cable television throughout
Scotland, Northern Ireland and Wales. Digital cable television will be rolled
out to most of our remaining franchises during 2001 with the exception of some
franchises for which the roll out schedule is still being finalized.

Premium TV

Premium TV Limited, which is a wholly owned subsidiary of NTL Delaware, has
a joint venture with Eurosport, the pan-European basic tier sports channel, to
develop British Eurosport which is a version of Eurosport tailored to appeal to
U.K. viewers. This channel is now available to all U.K. pay television homes.

Premium TV has also entered into long-term joint ventures with a number of
U.K. football clubs including Rangers, Leicester, Middlesbrough and the Football
League, which represents 68 clubs, and has entered into five-year operating
agreements with Aston Villa and Newcastle football clubs. These joint ventures
will develop the football clubs' Internet and broadband rights which may include
audio-visual footage of matches on a delayed basis and live audio coverage of
matches. We believe that these ventures will provide valuable content to drive
penetration of broadband services in the United Kingdom and that there is also a
substantial international market for this content.

Telephony

In 1999, we launched the "NTL 3-2-1 call plan" for our residential
franchise customers where national and local calls cost only three pence per
minute during the day, evening calls are two pence per minute and weekend calls
are one pence per minute. We are able to offer the NTL 3-2-1 call plan by using
our national

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telecommunications and local networks and bypassing a portion of the wholesale
long distance fees which would otherwise be charged by BT and other carriers for
carrying calls to and from our local franchise networks.

Internet Access

In March 2000, we announced a plan to offer our residential franchise
customers throughout the United Kingdom free, unlimited Internet access via
their personal computers or, where available, televisions. This Internet service
is called "ntlworld" and became available to some of our customers beginning in
April 2000. As of March 31, 2001, we had approximately 514,700 ntlworld
customers within our local franchises and 87,700 customers outside of our
franchises.

In 1999, we were the first communications provider in the United Kingdom to
launch a high-speed cable modem Internet service, which links customers of our
local cable franchise networks to the Internet at up to ten times the speed
possible over standard telephone lines. As of March 31, 2001, we had
approximately 26,300 cable modem customers. Over 90% of our U.K. networks are
currently able to provide this service to our customers. Our high speed Internet
service currently operates at a speed of up to 2.0Mb/s and is offered at minimum
delivery speeds of 64Kb/s or 512Kb/s. The service is an "always on" service,
removing logging-on delays and the need to log off while using the telephone. It
uses the hybrid fiber coaxial cable portion of our broadband network, which
allows customers to simultaneously make or receive telephone calls while
accessing the Internet. This service is currently offered at a flat rate of
L24.99 per month, including the rental of a cable modem and installation.

Interactive Services

We have moved rapidly to take advantage of the convergence between the
Internet, television and the advent of digital cable television. We are
currently aggregating a broad range of interactive content into a seamless
service that can be deployed as part of our interactive television offering to
our residential customers. Our interactive offering comprises a free television
e-mail service, a "walled garden" of websites that have been specially
re-designed for television and an online customer service application that
allows select customers to see their NTL bill via the television.

We have established relationships with over 75 content providers to deliver
a wide range of interactive services, including education, shopping and banking,
finance, travel, entertainment, games, news, sports and local content.
Interactive content is organized into channels, including news, sports, travel,
financial affairs and investments, entertainment and retail. Our retail channel
includes content partners such as Iceland, QVC, W.H. Smith and Domino's Pizza,
the travel channel includes content partners such as British Airways and Thomas
Cook and the financial services channel features content partners such as
Barclays Bank, Abbey National and The Halifax.

We also offer additional channels providing games and educational content.
All of our contracts with content providers provide us with a commission on
e-commerce transactions. We have also set up a team to exploit the advertising
opportunities associated with our interactive service offering.

Enhanced Television Service

The next stage in the development of our consumer proposition is the
provision of enhanced television services. Enhanced television uses
communications technology to enable television programs to become interactive.
Enhanced television can be viewed as a modified form of interactive services
which are constantly "on supply" as the viewer watches television. Potential
applications include the ability to enable viewers to participate in game shows,
access further information in documentaries or respond directly to advertising.
Viewers use their remote controls to access the additional program information
on demand.

A major advantage of our cable technology is that these enhanced television
links are not restricted to information delivered in the broadcast stream, a
significant restriction of satellite delivered services. A broad range of
additional content can be delivered over the cable modem integrated in the
digital television set top box.

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We are working with a number of major broadcasters to develop an enhanced
television service and have demonstrated a number of program pilots. Examples of
these pilots were shown at the Edinburgh television Festival in August 2000.
Moreover, on August 1, 2000, the ITN News Channel, a joint venture between NTL
Delaware and ITN, launched and became the first television channel on our
Digital Cable network to offer enhanced programming. At the press of a button on
the remote, viewers can access more detailed information on news headlines and
features, as well as check their local weather report.

ADSL Technology

In addition to our high-speed cable modem service, we have the technology
to offer our services using Asynchronous Digital Subscriber Line, or ADSL
technology. Each drop wire into the customer's premises in our residential
service comprises a coaxial cable for broadband services and two copper pair
telephone wires for telephone service. An ADSL technology pilot is currently
running in one of our franchises, which exploits the pair of copper wires. At
this point in time, our high-speed cable modem service has shown itself to offer
a better service mix of price, speed and quality than the deployment of ADSL
technology but we are preparing ourselves in the event that ADSL gains
substantial acceptance among our customers.

Although we are not presently pursuing the use of ADSL technology outside
of our network, we can deploy ADSL technologies using BT's copper wire
infrastructure or by taking a managed data service from BT. Taking a managed
data service from BT would provide a ready means of providing an access service
to business customers that may have many sites situated within reach of our
hybrid-fiber network but also a few sites located outside the reach of our
network.

Non Franchise Customers

In 1999, we extended our consumer service offerings in the United Kingdom
beyond our cable franchise areas by launching a set of products and services
that allow us to provide telephone and Internet services to every home in the
United Kingdom with a BT telephone line and television. This retail offering has
allowed us to increase significantly our U.K. target market. Using indirect
access, customers retain their BT telephone lines, but their calls are
automatically routed to our switches and national network. We therefore receive
call revenues associated with the customers' voice traffic. As of March 31, 2001
we had approximately 435,200 customers subscribing to our "off-net" telephony
service.

Marketing & Branding

Since the re-launch of the NTL brand in 1999, we have been developing a
focused, marketing oriented approach. We position NTL as the brand offering
consumers more choice, better quality and more control over their television,
telephone and Internet service. Brand awareness is achieved through the use of
multiple media outlets and a consistent message. The re-launch of our brand has
created a stable platform which enabled the successful re-branding of ConsumerCo
into NTL over a three month period, and we achieved our target of 90% customer
awareness of the integration of ConsumerCo into NTL following the closing of the
acquisition.

Visually, the NTL brand is easy to recognize. We believe it conveys the
excitement and innovation of NTL, and reflects our focus on innovation, customer
service and entrepreneurial spirit. Given the pace of change in the market,
however, we have needed to reassess the positioning of our brand in order to
stand out in a crowded marketplace. We are accomplishing this repositioning by
demonstrating the benefits of our competitive position, in having the capability
to provide consumers with a single source solution for television, telephone and
Internet services emphasizing value. Put simply, our message to consumers is
"NTL utilizes technical innovation to create the practical, everyday tools that
people need to live their lives and run their businesses."

The series of high profile sponsorship deals we entered into throughout
2000 also helped to build recognition of NTL as a household name. The recent
sponsorship of the hit television show "Who Wants To Be a Millionaire" proved to
be a huge success for achieving a substantial increase in both product and brand
awareness giving NTL a prompted brand awareness of 87% compared to 35% in June
1999 (according to Millward Brown, November 2000). Sponsorship of football clubs
such as Celtic, Rangers, Aston Villa and Newcastle United provides us with
national reach, stature and appeal among a core target audience. This
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sponsorship also provides a solid base from which to sell more of our products
and services in key geographical areas.

We plan to continue to invest in advertising to maintain a strong brand
that unites all of our acquired companies and franchises under one umbrella in
order to increase both sales and brand equity.

In 2001, we aim to achieve our business objectives of increasing
subscribers and revenue by providing a first rate advanced technology service to
customers at a competitive price while at the same time bringing to life our
brand positioning through support of our products and services. We are working
to achieve this goal through the continuation of the multi-media approach to
advertising which began at the time of the re-launch and includes outdoor
posters, television, press, radio and a comprehensive online campaign. Our brand
advertising is supported by a strong tactical and targeted campaign using direct
response media such as direct mail, regional radio and press. The increased
coverage of our franchise areas following our recent acquisitions, and our
off-net indirect access services, will allow us to target a wider audience using
more efficient marketing campaigns.

Customer Management Systems

We are highly focused on customer service and invest significantly in our
employees, processes and advanced technology in order to provide the best
service to our customers. We use advanced billing and customer management
systems enabling us to control all aspects of a customer's account for both
telecommunication and television products. We currently operate a number of
billing systems inherited from the different cable franchises we have acquired.
We are in the process of merging these different systems onto a single platform
which we expect will reduce costs and improve customer satisfaction.

IT Services Outsourcing Deal with IBM

On May 24, 2001, we announced that we had signed a new strategic
outsourcing agreement with IBM. Under the agreement, IBM will provide IT
services for all of our operations in the United Kingdom and Ireland through
2012. We intend to retain control of our IT activities that are fundamental to
our competitive advantage and key to the development of our intellectual
property. We believe that this strategic alliance with IBM will create a
significant competitive advantage through the delivery of state-of-the-art
technology and a menu of support services. We further believe this alliance will
generate cost savings in excess of $450.0 million over the life of the
agreement, and will allow us flexibility to size our IT needs and resources to
generate further cost savings and create further competitive advantages over
time. With immediate effect, 483 of our IT employees will transfer from NTL to
IBM to coincide with the start of the service under the agreement.

Digital Media Center

We have invested approximately $66.0 million in a new media center which is
at the heart of our digital operations. The center serves as the marshalling
point for all digital content, both for television and interactive services.
Television and interactive services are brought to the center over satellite or
fiber telecommunication links. Currently, we produce a 55 channel near video on
demand service using advanced digital storage and server technology. A complete
sports channel, British Eurosport, is originated in the media center. In
addition to the interactive television elements, conditional access for pay
television and electronic program guide datastreams are created and played out
from the center.

The media center also houses the interactive servers for on-demand elements
and is the point at which the broadband cable modem path is routed to access the
Internet. The interactive system, scheduling and conditional access system are
directly integrated with our customer management system. This allows direct
customer interface through the television screen for billing, on-line help or
self-provisioning of new services. The system is controlled by a sophisticated
scheduling system and control room that monitors all channels. The resulting
service feed is carried from the center to each regional head-end, where the
cable signal originates, using ATM technology. This feed is then combined with
local content, such as regional television channels for delivery over that local
network. The system is capable of allowing full flexibility of the regional line
up of channels, to include regional services from the major broadcasters, such
as ITV, Channel 4 and the BBC.

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The media center is connected to our U.K. national network and linked to
our satellite hubs for both in-bound and out-bound traffic. The system
architecture and flexibility allows the delivery of a customized service to any
point connected to our fiber telecommunications network. For example, the
current reach of our network includes Dublin which allows us to connect
Cablelink's Dublin franchise to the media center.

Acquisition of ConsumerCo

On May 30, 2000, NTL Incorporated completed its acquisition of the
residential cable, business cable, indirect residential telephony, residential
Internet and digital television development and services businesses from Cable &
Wireless Communications plc. We have been integrating these operations and
facilities into our existing cable operations and franchise areas. On July 26,
1999, NTL Incorporated announced that with the support of France Telecom, it had
agreed to this acquisition.

NTL Incorporated issued as aggregate consideration approximately 85 million
shares of NTL common stock and paid approximately L2.92 billion in cash to Cable
& Wireless Communications stockholders, plus cash payments for fractional
shares. NTL Incorporated also repaid approximately L2.2 billion in Cable &
Wireless Communications' allocable net debt. In connection with the acquisition,
our subsidiaries entered into bank credit facilities comprising a L2.5 billion
credit agreement and a L1.3 billion credit agreement to refinance indebtedness
and for working capital purposes. See "Management's Discussion and Analysis of
Results of Operation and Financial Condition" -- "Liquidity and Capital
Resources."

On May 30, 2000, NTL Incorporated completed an investment by France Telecom
of $4.2 billion, which was previously announced on July 26, 1999. NTL
Incorporated issued and sold to France Telecom 42,229,730 shares of common stock
at a per share price of $59.20 and 2,000,000 shares of 5% cumulative
participating convertible preferred stock, series B, having an aggregate
liquidation preference of $2 billion, a conversion price of $80.00 per share and
a redemption price of $96.00 per share. NTL Incorporated used the proceeds from
the France Telecom investment, as well as existing cash resources, to fund the
cash portion of the payments to Cable & Wireless Communications stockholders.

BUSINESS SERVICES

The primary objective of our business services division in the United
Kingdom "NTL Business" is to provide a comprehensive range of voice, data and
application based communications solutions for our customers. Our business
strategy is to fully exploit our superior network capability and place an
increasing emphasis on broadband products and services. Rather than simply
offering our customers a lower price for their existing service, we offer a
package of services designed to address all their communications needs at a
price which offers good value. For our smaller business customers, we are
providing a range of bundled packages based on our standard services and
standard terms and conditions. For our larger customers, we offer services which
are tailored for their specific needs.

NTL Business has undergone a business transformation since the beginning of
2000 as we have moved away from a simple geographic or product based sales
approach to one where customers are grouped into specific market sectors. The
key element of this transformation program has been the integration of the
skills and abilities of employees from Workplace Technologies, X-tant and
ConsumerCo's small business team with those of the existing business telecom
operations, to create a single integrated customer support organization.

NTL Business is now focused on three key market sectors within the overall
U.K. communications market. These segments are "small and medium retail", "large
retail" and "wholesale". For organizational purposes, the first two of these are
further subdivided: "small and medium retail" into small businesses markets and
national markets, and "large retail" into public sector markets and enterprise
markets. The segmentation enables us to develop a deeper understanding of our
customers' businesses which enables us to craft specific solutions and trading
alliances appropriate for each specific market.

Following our analysis of published OFTEL statistics for telecommunications
services, and Gartner Group statistics for other communications services, we
estimate the size of the market in which we compete to be in

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excess of L24 billion for the year 2000. Of the total communications market, we
estimate that approximately L16.5 billion represented business
telecommunications and carrier telecommunications services.

Our network already passes more than 430,000 business premises in the
United Kingdom. However, as a result of the reach of our national network, we
can serve a substantial portion of the United Kingdom's approximately 1.2
million business premises through means such as indirect access. These premises
host approximately 1.5 million business customers. The architecture and reach of
our network infrastructure has positioned NTL Business to play a leading role in
the delivery of broadband services to U.K. businesses going forward. We plan to
exploit demand for broadband services primarily through our broadband cable
modem product which we expect to rollout in the second quarter 2001, and our E-1
Direct Internet Access Service, which we currently provide. We will continue to
market our standard products and services ranging from telephony and Internet
access to web hosting, data and e-commerce and managed services. These services
will be delivered via copper wire, coaxial cable, fiber and wireless.

Business Retail Markets

In our local retail markets, we describe ourselves as "thinking nationally
but acting locally." Our business purpose is to enable businesses to become more
efficient and effective. Our focus is on both large national businesses and
small businesses.

Our national business market team focuses on relationship management of the
large national or multi-national corporations that have their headquarters
within existing network footprint.

Our business model for dealing with small businesses has changed
dramatically over the last twelve months. In October 2000, we opened a new small
business call center which uses telephone account management techniques to sell
and service a range of simple business bundles for smaller businesses across the
United Kingdom. Under this new business model, we utilize direct mail and
marketing skills derived from our customer experience. In the second quarter of
2001, we plan to add broadband services to the business bundle and our
management of these accounts will be increasingly web-based.

Across these chosen market sectors, we believe that by utilizing our
national telecommunications broadband capability, and the expertise of our
market focused account management and technical support teams, we can target
specific business sectors and drive up our penetration of that sector. It was
with this goal in mind that NTL business launched its market sector focused
business approach in the third quarter of 2000.

As of March 31, 2001, we had approximately 76,600 business customers with
an average of 4.7 lines per customer for a total of approximately 362,900 retail
business telephony lines installed in the United Kingdom.

An example of our sector focused strategy is the success we have had
penetrating the public sector market, which includes education. We support
customers all across the education spectrum within the United Kingdom. One of
our education customers is the Hertfordshire County Council. We provide the
"Hertfordshire Grid for Learning," a managed network service for 566 schools in
Hertfordshire county. We deliver and manage the servers, network connectivity,
e-mail domain, security and filtering service for each of those 566 schools.
Similarly, we support the Technology Colleges Trust, for the Specialist Schools
national network, "Supergrid," which serves over 100 schools with a broadband
intranet and Internet service.

Another example in the public sector is our work with public safety service
providers. Our public safety business offers a full range of communications
services, including the design and operation of radio networks and the provision
of support, maintenance and facility management services to customers who
provide public safety services to the community. Our customers include primary
providers such as police, fire and ambulance and secondary providers such as the
H.M. Prison Service, the Coast Guard and the Royal National Lifeboat
Association. We have been servicing a substantial portion of the radio
installation and maintenance market for public safety in the United Kingdom for
many years and our public safety customers provide us with a steady source of
revenue.

We intend to further expand our activities in the public safety sector from
facilities and maintenance activities into complete outsourcing arrangements. We
are pioneering the evolution of Managed Communication

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Services in the public safety sector, and we believe that the majority of the
British Public Safety Services will in the foreseeable future move from their
current service arrangements into outsourcing and the provision of fully managed
services. We believe we have already established a strong position in
outsourcing services and facility management for these mission critical
customers, and we plan to continue to build on our existing relationships with
current customers. An example is the Metropolitan Police Authority (New Scotland
Yard), for which we manage communications services for over 25,000 police
officers.

An example of the success of our market sector approach in the enterprise
sector is our relationship with the electricity distribution company TXU. Our
relationship with TXU has evolved from our initial provision of switched voice
service to our current position in which we provide an element of each of our
other product offerings to TXU. We were able to broaden this relationship by
utilizing our relationship as TXU's trusted switched voice provider. We have
worked to develop a solution which reflects the developing utility business
model and addresses our customer's requirements for managed networks and
facilities outsourcing.

Our current relationship with TXU, which we hope to replicate with other
customers, comprises services ranging from traditional connectivity to
outsourced managed Wide Area Network (WAN) and Local Area Network (LAN) packaged
so as to provide an overall customer solution. These customer relationships tend
to have long-term arrangements (three to seven years) and also incorporate
services provided by third-party organizations and NTL partnerships.

We offer the following business products and services to our business
customers:

- ACCESS SERVICES that connect our customers to us for inbound and
outbound voice and data calls. These access services include additional
analog business exchange lines, or BELs, and digital business exchange
lines, or DELs. DEL services include basic rate access, also known as
ISDN2, and primary rate access, also known as ISDN30. These and other
direct and indirect access services are priced competitively and are
often in competition with similar services provided by a number of other
direct and indirect suppliers. In the second quarter of 2001, we plan to
launch a business cable modem service that will enable the delivery of
broadband services to our business customers.

- MANAGED VOICE SERVICES/VIRTUAL PRIVATE NETWORKS that are best
illustrated by our central exchange "Centrex" service. Through this
service we provide our customers with business exchange lines configured
as a "virtual PABX," where we provide the services normally associated
with a traditional PABX located at a customer's premises. We provide
these services on a rental basis thereby allowing our customers to avoid
the expense associated with an outright capital purchase and maintenance
costs.

- MANAGED DATA SERVICES that include point to point private circuits at
speeds of multiples of 64Kb/s and individually tailored 100 Mb/s and 155
Mb/s services. Other services include the provision of inter-site data
services with particular transmission protocols, such as Internet
Protocol also known as TCP/IP, Frame Relay and ATM. Our ability to
design, deploy and manage a customer's data services was greatly
enhanced by the acquisition of Workplace Technologies (now known as NTL
Business) in September 1999, which provides consultancy services to
assist in the design and installation of data, voice and video networks
and provides remote monitoring and support of these networks.

- MANAGED LOCAL AREA NETWORKS (LANS), in order to support the developing
needs of our business market, we have established significant
capabilities that enable us to fully manage LANs or to design, project
manage and integrate new LAN platforms for our customers.

- 08XX SERVICES that include free local and national call services
together with a range of other routing features based on our network.
These services enable our customers to manage inbound calls and
establish varying tariffs for their customers to contact them.

- INTERNET SERVICES, we provide our customers with the tools they require
to build their e-business services including dedicated, high-speed
Internet access services, web hosting services, and specific
individually tailored applications securing and protecting their
e-businesses. The range of services we provide also includes the
provision of simple inexpensive software to enable our customers to
begin doing business over the Internet.

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We have a variety of alternative methods to bring our national
telecommunications network over the "last mile" to the premises of those
customers which are located outside of our franchise area:

- As a licensed national public telecommunications operator, we can
readily obtain permits to construct telecommunications networks, and can
build out our network to reach our customers. Although this is often the
most costly means of reaching a customer, the expense can be justified
in the case of larger customers or where a significant level of traffic
is obtained from a customer. For example, we have extended our fiber
optic network within London to reach and support CNN's facilities.

- We can lease circuits on the local networks of other service providers
to connect to our customer's premises. Although this may reduce the
operating margin on a particular account, it requires significantly less
capital expenditure than a direct connection, can often be put in place
relatively quickly and can be replaced at a later date if traffic
volumes justify it.

- We have the ability to connect customers to our national
telecommunications network by implementing microwave radio links. We can
use our significant tower infrastructure to connect our network to our
customers, using digital point to point microwave radio links.
Alternatively, because we hold a license to operate radio fixed access
services on a national basis throughout the United Kingdom at the 10 Ghz
frequency, we could effectively use "wireless local loop" technology to
connect our network to our customers, although we are not currently
utilizing this approach to connect our customers. Either of these two
methods requires the installation of a mini-tower site on the roof of
the customer's premises to receive and broadcast data. "Wireless local
loop" connectivity would enable a radial transmission to a number of
sites surrounding the mini-tower whereas point to point connectivity
enables transmission between two points only.

Business Wholesale Markets

Our wholesale markets group's main area of business is supplying U.K.
infrastructure and bandwidth to national and international telecommunications
operators. Our national and local networks are used to interconnect these
carriers to cities in the United Kingdom and Ireland. NTL wholesale has seen
continued growth over the last five years, and has successfully positioned
itself as a key supplier of wholesale services. We expect to continue to serve
the wholesale marketplace through our strategy of providing high quality and
competitively priced services. Additionally, we continue to provide tailored
solutions necessary to serve this demanding market.

We believe that owning core infrastructure also opens up avenues for
international network expansion. Increasingly, network operators are looking at
minimizing capital outlay by swapping capacity on their infrastructure for new
nodes or additional capacity elsewhere.

Our customers include fixed wire line and mobile telecommunications
operators such as COLT, Energis and Global One, other cable operators, Internet
Service Providers, or ISPs, and various information technology and facilities
management companies. A dedicated team addresses the needs of the U.K. mobile
operators, and we are a major supplier to Vodafone and Orange. We have developed
a successful business supplying core interswitch network capacity to U.K. mobile
operators. We have commercial relationships with the four incumbent mobile
operators.

We have been instrumental in developing a new commercial and technical
model for the supply of networks to the mobile operators. These developments
culminated in our being awarded a five-year L150 million contract by Orange. A
key element of the contract is the extension of our existing core network. All
five third generation mobile operators will need to implement network and
services to support UMTS services, and we will work to define and co-ordinate
our company-wide strategy for supporting UMTS services.

A growing area of our wholesale business is selling voice termination to a
wider mix of operators, as well as using these relationships to reduce the
cost-base for our telephony traffic by:

- creating a self sustaining revenue stream in its own right,

- establishing commercial relationships with wholesale customers thus
enabling us to cross-sell and up-sell other products, and
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- generating revenue and cost reduction opportunities for other parts of
NTL and strategic relationships with, for example, NTL Ireland, NTL
Europe, and with international operators such as France Telecom.

The growth in the number of international operators building and operating
submarine cable systems has been substantial and continues to increase, with
many of the cables transiting the United Kingdom. We have considerably increased
physical connectivity to U.K. international cable landing stations and developed
products to address the needs of the international cable operators for carrier
services between the cable landing sites and the major U.K. international nodes
such as Telehouse, London, which services are also known as "backhaul" services.

We believe that the U.K. market for business wholesale data services is
significant and growing rapidly due to the fast growth in IP, Internet and other
data traffic. Utilizing our ATM national network, we have developed Frame Relay
and ATM wholesale products to meet this increasing demand for high-speed data
connectivity. Additionally, our core data network, local loop infrastructure and
connectivity to the main international nodes will allow us to address the needs
of international operators for the termination of U.K. bound and origination of
U.K. generated data traffic.

In addition to wholesale telecommunications and data services, we also
offer wholesale Internet access solutions including network services, call
center operations and customer provisioning and billing to U.K. ISPs and other
corporate customers that would like to expand their Internet presence. This
service was launched in 1995.

In 1996, we established the VirginNet joint venture with Virgin
Communications Limited. The joint venture is currently owned 49% by NTL and 51%
by Virgin. In July 2000, we announced our intention to acquire 100% of
VirginNet's ISP business with Virgin assuming ownership of VirginNet's content.
However, we have not yet reached an agreement with Virgin and we are exploring
other potential strategic alternatives. There can be no assurance that any
agreement on a transaction will be reached. We also run the network and
technical contact center for Which?Online, an independent consumer organization
as well as the technical contact center for Vizzavi, the mobile Internet portal
for Vodafone.

BROADCAST TRANSMISSION AND TOWER SERVICES

We are a leading independent owner and operator of wireless communication
and broadcast transmission infrastructure in the United Kingdom. We provide our
customers with enhanced products and services through our broadcast network,
state of the art equipment, and innovative facilities management expertise. Our
customer base includes over 1,000 companies, including all of the leading U.K.
mobile wireless operators and all major commercial television and radio
broadcasters.

We have a proven history of developing new products and services to meet
the needs of our customers and drive the growth of our business. These
developments include the implementation of Teletext, a text based data service
transmitted with the analog television signal, the implementation of NICAM in
the 1980s enabling the transmission of digital stereo and Dolby audio over
analog television transmissions, and most recently the design and implementation
of the world's first digital terrestrial television and digital audio
broadcasting networks and services for our broadcast customers.

We believe that the scope of our business allows us to differentiate
ourselves by providing products and services to three distinct market areas.

- SITE LEASING AND SERVICES. We operate the second largest independent
portfolio of wireless towers and sites available for lease in the United
Kingdom. In total we operate over [2,600] multi-user sites in the United
Kingdom, up from approximately 600 sites in May 1996. We have over
[4,000] leases on our towers and our lessees include all of the major
wireless operators in the United Kingdom and also offer unique services
such as In-Building wireless connectivity that can enhance their
wireless coverage in high-traffic areas such as shopping malls, office
buildings and conference centers.

- BROADCAST TRANSMISSION AND SERVICES. We own and operate one of two
television broadcasting infrastructure networks in the United Kingdom.
Additionally, we have national, regional, and local radio

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broadcast infrastructure networks in the United Kingdom. We developed the
first commercial digital terrestrial television service in 1998 and the
first all digital radio station in 1999. Because, unlike broadcasters in
the United States, we own and operate not only the towers but also the
broadcast transmission infrastructure, our broadcast customers rely on
our network and package of integrated turn-key services to distribute and
broadcast their content.

- SATELLITE AND MEDIA SERVICES. We provide satellite and media services
in the United Kingdom and value-added services such as playout, fixed
and mobile satellite uplinking, and a wide range of occasional
broadcasting services to generate incremental revenue.

Based on our track record of more than 50 years of providing broadcast
services to the United Kingdom and other markets and our expertise in digital
broadcasting, we believe that we are uniquely positioned to capitalize on the
trends towards privatization, outsourcing and digitalization of broadcast
transmission infrastructure and the tremendous growth opportunities in the
wireless communications industry.

We believe there is a global trend for governments and broadcasters to
divest their transmission networks. Similarly, wireless carriers have begun to
divest the tower portfolios as a means of monetizing what they believe to be
non-strategic assets. We are one of two companies with experience in the
transition of broadcast assets from public to private ownership and subsequently
operating the privatized broadcasting assets.

Site Leasing and Services.

We operate a wireless infrastructure network of approximately 2,600
multi-user sites as of December 31, 2000. We own, lease or manage approximately
1,800 sites and have access to approximately 800 undeveloped sites. Our primary
business is the leasing of antenna space on our sites to a diverse range of
wireless service providers, including providers of mobile telephony, paging,
specialized mobile radio, or SMR, and wireless local loop services. We have also
developed a range of complementary services that utilizes our tower expertise,
including infrastructure services, site selection and acquisition, design and
construction, antenna installation, network planning and management, and tower
maintenance.

Our network in the United Kingdom is national in scope and includes most of
the major population centers and highways. We operate 1,406 sites and have
access to 791 undeveloped sites in the United Kingdom Our wireless customers
currently include all of the U.K. mobile telephony operators, including Vodafone
AirTouch, BT Cellnet, Orange, One2One and Dolphin, all of the five major paging
companies, and many of the United Kingdom's largest wireless telephony carriers,
including BT, Cable & Wireless, and THUS plc. We also serve several utility
companies and emergency service organizations including British Gas, London
Ambulance and Her Majesty's Customs and Excise.

Second generation wireless services have been the major driver of our
growth to date, but the advent of third generation wireless services is expected
to drive further revenue growth. During 2000, the U.K. government awarded five
national Universal Mobile Telecommunications System, or UMTS, licenses each for
a duration of just over 20 years, continuing until December 31, 2021 unless
surrendered or revoked earlier. These licenses have been awarded to four
existing operators, all of whom are existing wireless customers of ours, and to
one new entrant. Under the terms of these licenses, each operator will provide
services to at least 80% of the U.K. population by December 2007. We believe
that each of these operators will require a complete national network based
around a radio site infrastructure of up to 4,000 sites by 2003 and potentially
up to 10,000 or more sites by 2010. Construction of these networks is
anticipated to begin in 2001 and is expected to generate significant demand for
suitable sites over the next few years as well as for existing sites. A major
reason that there will be an increase in the need for suitable sites for third
generation towers is due to the fact that third generation networks require a
greater density of towers than current second generation networks because of
their smaller range in relation to second generation technology.

The dramatic growth of wireless communications necessitates good cellular
coverage in all commercial areas, leading to a requirement for reliable wireless
communications infrastructure inside buildings. We believe this creates a new
type of radio site which, unlike towers, will exist within commercial buildings,
transport hubs, shopping malls and other large buildings. Our initial analysis
shows that there are approximately 2,000 of these

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types of commercial properties in the United Kingdom. To this end, we have won
contracts for 25 buildings including the exclusive contract to provide this
service inside Bluewater, Britain's largest shopping complex and recently, a
contract for Canada Square, part of London's Canary Wharf complex.

Building on the technology we developed for In-Building services, we are
exploring with UK mobile operators ways of using our fiber network to solve the
distance, coverage and power problems associated with UMTS rollout in urban
areas. Although in an early stage of development, we believe that a solution
utilizing small low-profile antennas, positioned on buildings and other street
level infrastructure and connected via our fiber network to remote base
stations, could improve coverage and service quality compared to more
traditional rooftop sites for UMTS technology. Furthermore, we would offer the
ability to backhaul base station calls through our fiber loop.

Broadcast Transmission and Services

We have been involved in broadcast television since the 1950s when we
designed and built the television transmission system for the United Kingdom's
first independent commercial television network. Through our national
infrastructure of owned and shared transmission sites and our owned network of
transmitters in the United Kingdom, we provide broadcast signals for the three
commercial national television channels in the United Kingdom and many of the
United Kingdom's independent local, regional and national radio broadcasters.

Our broadcast customers generally hold long-term licenses and enter into
service agreements with us that typically last 10 to 15 years. As a result, this
portion of our business is characterized by stable and predictable revenue
streams and currently has a forward order contract book of over $3.5 billion. An
attractive feature of our broadcast contracts is our ownership of both towers
and transmission equipment responsible for generating the broadcast signal. As a
result, the contracts increasingly have become end-to-end solutions including
all technical and service aspects of providing the transmission for the
broadcaster. In essence, TV and radio station owners are programmers and we are
the broadcaster. The nature of these arrangements, make it very difficult and
even cost prohibitive for broadcasters to switch to another service provider. We
have used this as an opportunity to develop strong relationships with our
customers, which in turn has helped us to better understand their needs and
customize new services for them.

Television broadcasting. We provide digital and analog broadcast
transmission services for national and regional television broadcasters,
covering 99.8% of the U.K. population, with approximately 3,500 broadcast
transmitters. Our extensive television broadcast customer base includes all of
the U.K. commercial terrestrial television broadcast companies consisting of the
ITV national network of 15 affiliated stations, the national services of Channel
4 and Channel 5, as well as the regional service S4C in the United Kingdom.

As one of the first companies to offer digital transmission services we
believe there are some significant first mover advantages. We provide digital
terrestrial broadcast transmission for two of the three commercial national
digital television services in the United Kingdom. These services carry up to 12
separate channels, including the ITV network, Channel Four, Channel Five and a
range of new digital channels and services such as pay per view. As of December
2000, we were operating 80 digital terrestrial television transmitting stations
reaching around 88% of the U.K. population. It is anticipated that the digital
network will ultimately grow to match the coverage of the analog system. In
order to achieve the same high level of coverage for digital, we believe that
the same number of sites as those for the existing analog services will be
required, which will represent a significant business expansion opportunity for
us.

Digital broadcast systems require a more complex engineering design than
their analog predecessors. We have exploited this by extending our range of
services to include tower leasing and transmission services (as with analog)
plus "end-to-end" system integration and service ranging from studio playout
centers to terrestrial transmission. This has the twin benefits of enlarging the
total market available from broadcasting and further differentiating us as a
unique provider able to offer towers, transmission and system integration
services for digital television.

Radio broadcasting. We are one of two major companies providing
transmission sites and services to the radio industry in the United Kingdom. We
offer a range of services to radio broadcasters including: target service

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area planning; site location; installation and commissioning; and equipment
selection, procurement, operation, monitoring and maintenance. We believe that
we are a supplier of transmission services to a substantial portion of the
addressable market. Our radio broadcast customer base includes two of the three
national commercial stations: Classic FM and Talk Radio, over 200 metropolitan,
regional and local stations and the first all digital radio station, Digital
One, of which we are a founding equity partner with a 37% equity interest. We
have a contract for the transmission of Digital One with a lifetime value in
excess of $75 million.

Satellite and Media Services

We own and operate satellite up-linking facilities consisting of 30 fixed
satellite uplink dishes able to access over 50 satellites with global coverage,
a network of mobile and transportable uplinks, management and control systems
and all associated operations and maintenance. We provide our satellite
customers with program and content distribution services for over 130 full-time
channels via satellite and fiber. In addition, we have facilities for playout
services, remote satellite news gathering, and full outside broadcast. Through
an alliance with Williams Communications, Inc., our customers also have access
to 48 cities in the United States.

We have expanded our service offerings over time to meet the growing needs
of our customer base as new technologies create new broadcast markets. As a way
to add incremental revenue, we have begun to integrate backwards with our
existing customers by offering value added services. Such service developments
include:

- establishment of playout services, which enable us to take ownership of
the customer's transmission needs from the point that it delivers the
program or content and needs a channel to be created. We then are
responsible for all the operational issues related to the broadcast of
that content. We have just recently completed construction of a
state-of-the-art playout facility outside of London and are in the
process of constructing a second to enhance our capabilities as demand
from broadcasters across Europe continues to rise.

- offering a range of occasional use broadcast services that allow media
content providers to outsource their off-site broadcasting needs,
whether it be for breaking news, sports events or music concerts, and
still deliver the desired content to their customers via our mobile
equipment.

Our Satellite and Media customers include programmers who own and operate
packages of content or channels, news agencies, sports broadcasters and
production companies. Our customer list includes such market leaders as AOL/Time
Warner (CNN, Turner, Cartoon Network), BBC, Discovery Channel, QVC, Reuters, the
Associated Press and British Sky Broadcasting.

NTL'S BUSINESSES IN THE REPUBLIC OF IRELAND

In July 1999, we acquired Cablelink Ltd. in the Republic of Ireland, which
passes over 417,000 franchise homes in Dublin, Galway and Waterford for
approximately IR pound 535 million (approximately $693 million).

Cablelink provides cable television services in Dublin, Galway and
Waterford to over 370,000 subscribers. As of March 31, 2001, Cablelink had an
88.4% penetration rate over its broadband cable network. Cablelink holds
licenses to provide analog and digital television services in its franchises for
the next 13 years with exclusive rights for the next three years. It also has a
full service license allowing it to provide public telephony, Internet and other
value-added services throughout Ireland.

We have already achieved the following key objectives since acquiring
Cablelink:

- We have re-branded all of the Cablelink franchises to NTL. NTL's audited
brand awareness has now grown to 90%.

- The service portfolio has now been expanded beyond basic cable
television to include telephony, dial-up Internet and cable modems.

- We have opened a new customer management center which has led to
significantly improved levels of customer service.

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- We have completed network upgrades for approximately 30,000 homes in
Dublin.

The main focus of activity for 2001 is to roll-out digital television
service in the three Irish franchise areas of Dublin, Waterford and Galway. We
anticipate that 115,000 homes will be capable of receiving a digital signal in
Dublin by September in compliance with our regulatory milestones. We expect that
digital service will be available in Waterford and Galway in the fourth quarter
of 2001.

COMPETITION

We face significant competition from established and new competitors in the
areas of residential telephony, business telecommunications services, Internet
and cable television. We believe that competition will intensify in each of
these business areas, particularly business telecommunications and Internet.

CONSUMER SERVICES

We compete primarily with BT in providing telephone services to residential
customers in the United Kingdom. BT occupies an established market position and
manages fully built networks and has resources substantially greater than ours.
According to the Office of Telecommunications, or OFTEL, in June 2000, BT
serviced 81.6% of U.K. residential telephone exchange line customers. Our growth
in telecommunications services, therefore, depends upon our ability to convince
BT's customers to switch to our telecommunications services. We believe that
value for money is currently one of the most important factors influencing the
decision of U.K. customers to switch from BT to a competitive telecommunications
service. BT has, however, introduced price reductions in some categories of
calls and, due to regulatory price controls, BT will be making further
reductions in its telecommunications prices. Accordingly, although we intend to
remain competitive, in the future we may be unable to offer residential
telephone services at rates lower than those offered by BT. In this case, we may
not achieve desired penetration rates and may experience a decline in total
revenues. There can be no assurance that any such decline in revenues or
penetration rates will not adversely affect us. In addition to BT, other
telecommunications competitors could prevent us from increasing our share of the
residential telecommunications market. In particular, BT is under a regulatory
obligation to introduce carrier pre-selection on its network, an initial phase
of which was introduced in December 2000 for national and international calls,
although the carrier pre-selection for all calls (except for certain special
categories) will not be launched until nearer the end of 2001. Carrier
pre-selection may increase the appeal of indirect access operators, whose
discounted call charges may undercut us.

We also compete with mobile networks. This technology may grow to become a
competitive threat to our networks, particularly if call charges are reduced
further on the mobile networks and wireless broadband becomes a viable
alternative to our broadband services. Our tower services group may enable us to
benefit from the growth in this technology. There can be no assurance, however,
that we will be able to compete successfully with such telecommunications
operators.

We believe that we have a competitive advantage in the residential market
because we offer integrated telephone, cable television, telecommunications
services (including Internet, interactive and on-line services) and
multi-product packages designed to encourage customers to subscribe to multiple
services. However, there can be no assurance that this competitive advantage
will continue. Indeed, BT and all other operators are permitted to provide and
convey cable television services throughout the United Kingdom from January 1,
2001, and exclusive franchises will no longer be awarded.

British Sky Broadcasting Limited, or BSkyB, currently markets
telecommunications services on an indirect access basis, which requires the
customer to dial additional digits before entering the primary telephone number,
thus diverting calls onto another operator's network. In addition, BSkyB has a
joint venture with BT that is known as Open (formerly British Interactive
Broadcasting). BSkyB increased its holding in Open to 80.1% in July 2000 as a
result of buying out HSBC and Matsushita. The joint venture could provide
additional competition.

Our cable television systems compete with direct reception over-the-air
broadcast television, DTH satellite services and satellite master antenna
systems. In addition, pay television and pay-per-view services offered by us
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compete to varying degrees with other communications and entertainment media,
including home video, cinema exhibition of feature films, live theater and newly
emerging multimedia services. We expect that, in the future, we may face
competition from programming provided by video-on-demand services.

In 1999, BSkyB and OnDigital dropped the practice of charging any upfront
fee for digital set-top boxes, although they still charge in some instances for
installation. Coupled with BSkyB's move to bundle free Internet access and
discounted indirect access telephony (with calls priced at a significant
discount to BT headline rates), these moves have reduced the competitive
advantages previously represented by our offerings. We believe that the
underlying technological advantages of our networks will allow us to continue to
offer competitively priced products and services in order to respond to such
moves by our competitors. Nevertheless, there can be no assurances that we will
be able to continue to compete successfully in all segments of the residential
markets.

BUSINESS TELECOMMUNICATIONS

BT is also our principal competitor in providing business
telecommunications services. In addition, we compete with Cable & Wireless plc,
Energis Communications Limited, Thus plc in Scotland and with other companies
that have been granted telecommunications licenses such as MCI-WorldCom and
COLT. In the future, we may compete with additional entrants to the business
telecommunications market. Competition is based on price, range and quality of
services, and we expect price competition to intensify if existing and other new
market entrants compete aggressively. Most of these competitors have substantial
resources and there can be no assurance that these or other competitors will not
expand their businesses in our existing markets or that we will be able to
continue to compete successfully with such competitors in the business
telecommunications market.

BROADCAST TRANSMISSION AND TOWER SERVICES

Crown Castle U.K. Ltd ("Crown"), a subsidiary of Crown Castle International
Corp., is NTL's primary competition in the terrestrial broadcast transmission
market in the United Kingdom. Crown provides analog transmission services to the
BBC. It also has been awarded the transmission contract for the new DTT
multiplex service for the BBC and OnDigital. Crown has diversified from its core
television broadcasting business using its transmission infrastructure to enter
into the radio transmission and telecommunications sectors.

Although Crown is our direct competitor, we each have reciprocal rights to
use each others' sites for broadcast transmission usage in order to enable each
of us to achieve the necessary country-wide coverage. This relationship is
formalized by the site-sharing agreement entered into in 1991 when those towers
were privatized.

Crown also offers site rental on a significant number of its sites (some of
which are managed on behalf of third parties). Like us, Crown offers a full
range of site-related services to its customers, including installation and
maintenance. In November 2000, Crown entered into an agreement with BT to
deliver roof space and grounds at an initial 4,000 BT exchange sites around the
United Kingdom. We believe our towers to be at least as well situated as Crown's
and that we will be able to continue expanding our own third-party site-sharing
penetration.

All four U.K. mobile operators own site infrastructure and lease space to
other users. Their openness to sharing with direct competitors varies by
operator. Cellnet and Vodafone have agreed to cut site costs by jointly
developing and acquiring sites in the Scottish Highlands. BT and Cable &
Wireless plc are both major site-sharing customers but also compete by leasing
their own sites to third parties. BT's position in the market is even larger
when considered in combination with its interest in Cellnet.

Several other companies compete in the market for site rental. These
include British Gas, Racal Network Systems, Aerial Sites Plc, Relcom Aerial
Services and the Royal Automobile Club. Some companies own sites initially
developed for their own networks, while others are developing sites specifically
to exploit this market.

We face competition from a large number of companies in the provision of
network services. The companies include CTL, specialty consultants and equipment
manufacturers such as Nortel and Ericsson.

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REGULATION

Telecommunications service industries in the United Kingdom are governed by
legislation under the Telecommunications Act 1984, the Broadcasting Act 1990,
and the Broadcasting Act 1996. The operator of a full-service telecommunications
system in the United Kingdom requires the following two principal non-exclusive
licenses:

- a telecommunications license, granted under the Telecommunications
Act by the Secretary of State and supervised by the Department to
Trade and Industry, or DTI, and OFTEL, which authorizes the
installation and operation of the telecommunications network used to
provide cable television and cable telephone services; and

- a cable television license granted under the Broadcasting Act and
supervised by the Secretary of State and the Independent Television
Commission, or ITC, which authorizes the provision of broadcasting
services.

Each type of license described above contains various conditions, and in
the event of the breach of such conditions, the Director General of
Telecommunications (the head of OFTEL) or the ITC, as appropriate, could issue
an enforcement order and ultimately commence proceedings to require compliance
or to revoke such licenses.

PRICE REGULATION

BT is currently subject to controls over the prices it may charge
customers. In particular, BT can only increase charges for certain services by a
capped amount based on the amount of the percentage change in the retail price
index. In Autumn 1999, OFTEL began the process of examining what price controls,
if any, should apply to BT after 2001. In February 2001, OFTEL announced that
current retail price controls would be extended until July 2002 with a roll over
provision for a further year.

NTL is not subject to the same scrutiny and control by OFTEL of its retail
telephone prices as BT, given its non-dominant status in the market. However,
NTL is subject to prohibitions on undue preference and undue discrimination in
its cable television pricing. NTL publishes its standard prices, terms and
conditions for all services offered to consumers.

NUMBER PORTABILITY

The European Union agreed in 1998 to a revision to the Interconnection
Directive that made it a requirement for Member States to mandate number
portability. Implementing regulations came into force in the United Kingdom on
January 19, 2000 requiring that number portability should be provided on request
to all customers switching between different operators and providers of fixed
telecommunications services. NTL has a process in place to comply with its
existing obligations and it is now in the process of negotiating more service
establishment arrangements with other operators.

LOCAL LOOP UNBUNDLING

In November 1999, an OFTEL policy statement mandated the unbundling of BT's
local loop to rival providers, enabling them to offer a range of high bandwidth
services using Digital Subscriber Line (DSL) technology. On August 8, 2000
conditions in BT's license were brought into force setting out the requirements
under which BT must provide services necessary for local loop unbundling. EC
legislation requiring BT to provide unbundled access to its local loop is set
out in Regulation EC 2887/2000, adopted by the European Parliament and Council
on December 18, 2000. OFTEL published the wholesale prices for BT's unbundled
local loops on December 29, 2000 and on February 21, 2000 a determination was
published setting out some of the terms on which shared access to the local loop
will be offered. BT published a revised reference offer on March 31, 2000, which
OFTEL is reviewing for compliance with the determination. OFTEL is also
investigating the cost of co-location facilities quoted by BT to determine
whether they are cost orientated.

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BT is currently rolling out ADSL over its own network. ADSL will allow
consumers access to high speed information services. The introduction of local
loop unbundling will give rise to opportunities for us, but could also give rise
to increased competition.

INTERCONNECTION

NTL Group Ltd. has Annex II status giving it rights of interconnection at
wholesale rates to other operators with similar status.

OPEN ACCESS TO CABLE INFRASTRUCTURE

In April 2000, OFTEL issued a public consultation document on regulated
access to cable infrastructure ("open access"). The conclusion reached by OFTEL
in April 2001 was that regulation to require open access to cable networks was
not currently justified. OFTEL has stated that it will continue to monitor the
situation.

CONDITIONAL ACCESS

Following joint advice given to the Government by OFTEL, the ITC and OFT on
options for ensuring that the digital television market does not develop in such
a way as to inhibit competition or set unnecessary barriers for consumers to
access new services such as e-commerce, OFTEL gave a commitment to review the
guidelines on conditional access pricing. On May 8, 2001 OFTEL announced that in
addition to reviewing current arrangements for public service broadcasters'
access to conditional access services, it will also consider whether different
types of tariff structure create a barrier to entry of new services, public
service or commercial. A consultation document on charging principles for
conditional access services is expected to be published in July 2001.

BSKYB CARRIAGE AGREEMENT

NTL's carriage agreement with BSkyB is subject to regulatory approval by
both the ITC and the U.K. Office of Fair Trading, or OFT. The agreement was
therefore notified to the OFT in Autumn 2000. In December 2000, the OFT
separately announced that it was commencing a six-month investigation under the
U.K. Competition Act into BSkyB's activities, in particular the wholesale prices
offered to rival distributors of pay television services. The launch of this
investigation in December 2000 has meant that the OFT's timetable for reviewing
NTL's carriage agreement with BSkyB has been extended.

INTERNET ACCESS

Pursuant to a Direction by the Director General of Telecommunications on
May 26, 2000, BT is required to convey all metered Internet traffic across its
trunk network and to provide wholesale unmetered Internet access from the
customer to its local exchange known as Flat Rate Internet Access Call
Origination (FRIACO). The direction did not include a provision for a flat rate
wholesale service between BT's local exchanges and its tandem switches (main
exchanges in the tandem network which act as single switching points for calls).
On February 15, 2001, the Director General made a determination that as from
February 26, 2001 BT must offer to provide a single tandem wholesale flat rate
Internet access service, known as Single Tandem Flat Rate Internet Access Call
Origination (STFRIACO), by publishing an appropriate product specification. The
determinations may intensify competition in the market to supply Internet
access.

COMPETITION ACT 1998

The Competition Act, which came into force in March 2000, introduced a
prohibition on the abuse of a dominant position and on anti-competitive
agreements and introduced third party rights, stronger investigative powers,
interim measures and effective enforcement powers (including fines of up to 10%
of U.K. turnover). The Competition Act enables third parties to bring
enforcement actions directly against telecommunications operators who are in
breach of the prohibitions and seek damages, rather than have to wait for the
Director General of Telecommunications to make an enforcement order.

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In January 2000, OFTEL issued specific guidance on the application of the
Competition Act in the telecommunications sector. This guidance states that
OFTEL would follow closely the general principles of competition law in its
application of the new prohibitions. In addition, the regulators must not reach
decisions which are inconsistent with EC law.

BROADCAST SERVICES

A portion of our total revenue is attributable to the provision of
television and radio transmission and distribution services. In the United
Kingdom, the provision of such services is governed by the Telecommunications
Act 1984 and The Wireless Telegraphy Act 1949. The Radiocommunications Agency,
an executive agency of the Department of Trade and Industry is charged with
administering spectrum licences. The Secretary of State issues spectrum
licences. NTL's Wireless Telegraphy Act licences contain conditions relating to
the revocation of the licences and notifications to the Secretary of State.

TELECOMMUNICATIONS ACT AND BROADCASTING ACT LICENSES

NTL's licenses contain conditions and provisions which, among other things:

- require us to publish our charges and terms and conditions of business
and not to show undue preference to or exercise undue discrimination
against particular persons in the provision of certain
telecommunications services;

- impose on us an obligation to share our transmission sites with other
transmission operators;

- restrict the prices which we are allowed to charge for the provision of
some services;

- prohibit us from cross-subsidizing the unregulated side of our business;
and

- impose a requirement for separate accounts to be produced in relation to
both the regulated and unregulated parts of our business. However, we
are not obliged to do anything "not reasonably practicable."

PRICE CAP REVIEW

Our regulated business may be divided into two categories: Price Regulated
Business and Applicable Rate Business. Price Regulated Business comprises those
telecommunication services which we are obliged to provide pursuant to our
Transmission License and in respect of which price controls are imposed. Our
Applicable Rate Business comprises those telecommunications services which we
are obliged to provide but which do not fall within the definition of Price
Regulated Business. Charges for Applicable Rate Business are agreed between us
and the relevant customer. If despite all reasonable efforts an agreement cannot
be reached between us and a significant proportion of our customers in respect
of any particular telecommunications service, the charge will be determined by
the Director General.

In respect of any services provided by us which are not Price Regulated
Business or Applicable Rate Business, our prices are wholly unregulated, except
for the overriding duty not to engage in any pricing policy which constitutes
undue preference or undue discrimination against any person or class of persons
in respect of telecommunications services. Our unregulated income would include,
for example, charges for site rentals to PCN operators.

Our Price Regulated Business consists of the television transmission
service provided to the ITV (Channel 3) companies and Channel 4/S4C including
the operation and maintenance of transmission equipment and the provision to
third party transmission operators of the accommodation, masts and antennae
necessary for the operation of broadcast transmission services.

On December 24, 1996, the Director General of Telecommunications varied our
Telecommunications Act Licenses to effect the price controls which are to apply
to us for the period from January 1, 1997 to December 31, 2002. The Price Cap
Review had two purposes: (1) to establish a new "P0" (allowable revenues for the
first year of the next control period, 1997, in respect of our Maximum Price
Regulated Business) and (2) to establish a new

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"X" (the percentage by which such revenues must, after allowing for consumer
price inflation, be reduced each year thereafter). The Director General's review
concluded that, on assumptions at the time (1996), the new P0 was (U.K. Pound)
53.4 million and the new X was 4.0%.

EUROPEAN UNION LEGISLATION

Our business is further regulated by the EU under various European
Commission Directives. In July 2000, the European Commission adopted a package
of legislative proposals which sets out a new framework for electronic
communication and ensures that the legislation is more technology neutral. The
proposed new framework consists of five harmonization Directives, including a
framework Directive and four specific Directives on authorization, access and
interconnection, universal service and users' rights, and data protection in
telecommunications services, a Regulation on unbundling the local loop, a draft
liberalization Directive and a decision on Community radio spectrum policy. At
meetings of the Council on Transport and Telecommunications on April 4, 2001 and
April 5, 2001, the Council reached a common position with a view to adopting the
framework Directive, the Directive on access and interconnection and the
Directive on authorisation.

COMMUNICATIONS BILL

A White Paper issued in December 2000 -- A New Future for Communications
- -- Proposed the creation of a new body "OFCOM" to regulate the communications
industry. This will merge the functions of OFTEL, the Radiocommunications Agency
and ITC, among others, and it is intended that it will provide a more flexible
framework for regulating a converging industry. Consistent with the proposed
European Commission regulatory framework for electronic communications, the
White Paper proposes that individual licenses be replaced by general
authorisations wherever possible.

RESEARCH AND DEVELOPMENT

Our research and development activities involve the analysis of
technological developments affecting our cable television, telephone and
telecommunications business, the evaluation of existing services and sales and
marketing techniques and the development of new services and techniques.

PATENTS, COPYRIGHTS AND LICENSES

We do not have any material patents or copyrights nor do we believe that
patents play a material role in our business. We are substantially dependent on
the licenses and franchises granted by the legislative agencies which regulate
our respective businesses. The loss of any one or more of our licenses or
franchises could have a material adverse effect on our business and financial
condition. There are no material intellectual property licenses used by us, the
loss of which would have such an effect.

CUSTOMERS

Except for our broadcast services business in the United Kingdom, no
material part of our business is dependent upon a single customer or a few
customers, the loss of any one or more of which would have a materially adverse
effect on us. The broadcast services business in the United Kingdom is, however,
substantially dependent on the revenues we receive pursuant to contracts with
the ITV companies, Channel 4/S4C and Channel 5, the loss of one or more of which
may have a material adverse effect on the broadcast services business.

EMPLOYEES

At December 31, 2000, we had approximately 21,200 employees, including
subcontractors, in the United Kingdom and 640 in Ireland. Approximately 3,340
employees are covered by union recognition agreements with the Broadcasting,
Entertainment, Cinematographic and Theatre Union in the United Kingdom and
Ireland. None

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of our employees is otherwise represented by any labor organization. We believe
that our relationship with our employees is good.

PROPERTIES

We own, lease or occupy under license 43 offices, warehouses and shops
throughout the United Kingdom and our corporate head-office in Hook, Hampshire.
In addition, we own or lease approximately 500 switching centers/head-ends and
operational hub-sites together with other non-operational properties, as well as
various cable television, telephone and telecommunications equipment used in
each of our regional systems.

In addition, we have licensed access to 679 transmitter sites which are
owned by Castle Transmission and shared between the two organizations pursuant
to a site sharing agreement.

We maintain offices under lease for our corporate staff in New York City.

We believe that our facilities are presently adequate for their current
use. We intend to continue to expand the systems in accordance with the
requirements of the network build schedules and acquire new sites as part of the
ongoing expansion of our transmission networks.

LEGAL PROCEEDINGS

We are involved in, or have been involved in, certain disputes and
litigation arising in the ordinary course of business, including claims
involving contractual disputes and claims for damages to property and personal
injury resulting from the construction of our networks and the maintenance and
servicing of our transmission masts, none of which are expected to have a
material adverse effect on our financial position or results of operations or
cash flows.

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MANAGEMENT

The following are our current directors and executive officers and their
ages as of May 18, 2001.

NAME AGE POSITION
- ---- --- --------

George S. Blumenthal........... 57 Chairman of the Board, Treasurer and Director
Barclay Knapp.................. 44 President, Chief Executive Officer and Director
Michael Bertinetto............. 60 Director
Robert T. Goad................. 46 Director
Bernard Izerable............... 44 Director
Sidney R. Knafel............... 70 Director
Ted H. McCourtney.............. 63 Director
Del Mintz...................... 73 Director
Alan J. Patricof............... 66 Director
Warren Potash.................. 69 Director
Jean-Louis Vinciguerra......... 57 Director
Michael S. Willner............. 49 Director
Lauren Hochman Blair........... 38 Vice President - Assistant General Counsel
Stephen Carter................. 37 Senior Vice President - Chief Operating Officer of U.K.
Operations
Gregg N. Gorelick.............. 42 Vice President - Controller
John F. Gregg.................. 37 Senior Vice President - Chief Financial Officer
Richard J. Lubasch............. 54 Executive Vice President - General Counsel and Secretary
Bret Richter................... 31 Vice President - Corporate Finance and Development
Steven L. Wagner............... 49 Vice President - Consumer Services

George S. Blumenthal has been our Chairman, Treasurer and a director since
our formation. Mr. Blumenthal was also our Chief Executive Officer until October
1996. Mr. Blumenthal was President of Blumenthal Securities, Inc. (and its
predecessors), a member firm of The New York Stock Exchange, from 1967 until
1992. Mr. Blumenthal was Chairman, Treasurer and a director of Cellular
Communications, Inc. ("CCI"), which positions he held since CCI's founding in
1981 until its merger in August 1996 into a subsidiary of AirTouch
Communications, Inc. (the "CCI Merger") Mr. Blumenthal is also Chairman and a
director of CoreComm Limited, and is a director of Sotheby's Holdings, Inc.

Barclay Knapp is our President and Chief Executive Officer, as well as a
director. He has held these positions since our formation with the exception
that Mr. Knapp was Chief Operating Officer until October 1996 when he was
appointed Chief Executive Officer and he was Chief Financial Officer until June
1999. In addition, Mr. Knapp was also Executive Vice President, Chief Operating
Officer, Chief Financial Officer and a director of CCI until the CCI Merger and
was Executive Vice President and Chief Operating Officer of Cellular
Communications International, Inc. until June 1998. Mr. Knapp was also
President, Chief Executive Officer and a director of Cellular Communications of
Puerto Rico ("CCPR") until its sale in August 1999, and is President, Chief
Executive Officer, Chief Financial Officer and a director of CoreComm. Mr. Knapp
is a director of Bredbandsbolaget, a Swedish company in which NTL Delaware holds
a 41% interest and eKabel Hessen GmbH, a German company in which NTL Delaware
holds a 32.5% interest.

Michael Bertinetto has been a director since May 2000. Mr. Bertinetto is
Executive Vice President of France Telecom Centre Europe (FTCE). From 1989 until
1999, Mr. Bertinetto was Chief Executive Officer of France Telecom Mobiles
Division (FTM).

Robert T. Goad has been a director since March 1999. Mr. Goad was a
director and the Chief Executive Officer of Diamond Cable Communications Plc
from May 1994 to March 8, 1999, and served as Chief Financial Officer from May
1994 until July 1995. Mr. Goad is a founder of and principal in ECE Management
International, LLC and has been President of Columbia Management, Inc. since
1984. Mr. Goad is also a director of B/G Communications, LLC, B/G Enterprises,
LLC, B/G Properties, LLC, Diveo Broadband Networks, Inc. and Grupo Clarin, S.A.

Bernard Izerable, has been a director since May 2000. Mr. Izerable has been
International Executive Vice President of France Telecom since January 2000.
From March 1996 until December 1999 Mr. Izerable was Senior Vice President for
Europe within France Telecom's International Development Division. Prior to
March

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1996, Mr. Izerable served in various positions at France Telecom since 1982,
other than from 1989 to 1991 when Mr. Izerable worked in the Strategic Planning
and Market Analysis Division of Nynex (USA) as part of a two year exchange
program between the two companies.

Sidney R. Knafel, a director since our formation, has been Managing Partner
of SRK Management Company, a private investment company, since 1981. In
addition, Mr. Knafel is Chairman of Insight Communications, Inc. and BioReliance
Corporation. Mr. Knafel is also a director of General American Investors
Company, Inc., IGENE Biotechnology, Inc., IGENE Biotechnology, Inc., Source
Media, Inc. and some privately-owned companies.

Ted H. McCourtney, a director since our formation, retired on June 30, 2000
as a General Partner of Venrock Associates, a venture capital investment
partnership, a position he had held since 1970. Mr. McCourtney also serves as a
director of CareMart RX, Inc. and Visual Networks, Inc.

Del Mintz, a director since our formation, is President of Cleveland Mobile
TeleTrak, Inc. and Cleveland Mobile Radio Sales, Inc. and Ohio Mobile TeleTrak,
Inc., companies providing telephone answering and radio communications services
in Cleveland and Columbus, respectively. Mr. Mintz has held similar positions
with the predecessor of these companies since 1967. Mr. Mintz is President of
several other companies, and was President and a principal stockholder of
Cleveland Mobile Cellular Telephone, Inc. before that company was acquired
through a merger with CCI's predecessor in 1985. Mr. Mintz is also a director of
CoreComm and several privately owned companies.

Alan J. Patricof, a director since our formation, is Chairman of the Board
of Directors of Patricof & Co. Ventures, Inc., the company he founded in 1969.
Mr. Patricof also serves as a director of CoreComm and Boston Properties, Inc.,
which are publicly held, and Johnny Rockets Group, Inc., which is a privately
held company. In addition, Mr. Patricof has served as Chairman of the White
House Commission on Small Business and was a member of the Blue Ribbon
Commission of the National Association of Corporate Directors.

Warren Potash has been a director since our formation. He retired in 1991
as President and Chief Executive Officer of the Radio Advertising Bureau, a
trade association, a position he held since February 1989. Prior to that time
and beginning in 1986, he was President of New Age Communications, Inc., a
communications consultancy firm. Until his retirement in 1986, Mr. Potash was a
Vice President of Capital Cities/ABC Broadcasting, Inc., a position he held
since 1970. Mr. Potash is also a director of CoreComm Limited.

Jean-Louis Vinciguerra, has been a director since August 1999. Mr.
Vinciguerra has been Senior Executive Vice President and the Chief Financial
Officer, France Telecom since 1998. Mr. Vinciguerra was an executive officer of
BZW from 1995 until 1996 and served as the representative to Asia for Credit
Agricole Indosuez from 1997 until 1998.

Michael S. Willner, a director since October 1993, is President and Chief
Executive Officer and a director of Insight Communications, Inc., the eighth
largest cable company in the United States. Mr. Willner is also a director of
Source Media, Inc. C-SPAN, CableLabs and Commerce TV, and is the Vice Chairman
and member of the executive committee of the board of directors of the National
Cable Television Association.

Lauren Hochman Blair is Vice President - Assistant General Counsel of NTL
Communications Corp. and Senior Assistant General Counsel of NTL Incorporated
and Corecomm Limited. Ms. Blair held this position at Cellular Communications,
Inc., Cellular Communications International, Inc. and Cellular Communications of
Puerto Rico, Inc. from July 1991 until the sale of each company in 1996, 1999
and 1999, respectively.

Stephen Carter is our Senior Vice President and Chief Operating Officer of
U.K. and Ireland Operations. Before joining NTL in November 2000, Mr. Carter was
with J. Walter Thompson, having been appointed Managing Director of J. Walter
Thompson's London Office in 1994, and, three years later took overall control as
Chief Executive Officer of J. Walter Thompson's UK and Ireland Group. Mr. Carter
is also a non-Executive Director of Trucost Plc and a Trustee of Raleigh
International, a registered U.K. charity.

Gregg N. Gorelick has been our Vice President - Controller since our
formation. From 1981 to 1986 he was employed by Ernst & Whinney (now known as
Ernst & Young LLP). Mr. Gorelick is a certified public accountant and was Vice
President - Controller of CCI from 1986 until the CCI Merger. He also holds that
position at

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CoreComm (where he is also Treasurer) and held that position at Cellular
Communications International, Inc. until its sale in March 1999 and at Cellular
Communications of Puerto Rico until the CCPR Acquisition.

John F. Gregg has been our Senior Vice President -- Chief Financial Officer
since June 1999 and Vice President of Corporate Development since August 1996.
Mr. Gregg joined us in 1994 as Managing Director of Corporate Development. He is
Vice Chairman and a director of Virgin Net, a joint venture between NTL
Incorporated and Virgin Communications Group, a director of Bredbandsbolaget, a
Swedish company in which NTL Delaware holds a 41% interest and a director of
eKabel Hessen GmbH, a German company in which NTL Delaware holds a 32.5%
interest. Mr. Gregg is also a director of Into Networks and Two Way TV, an
interactive programming company. Prior to his employment with us, Mr. Gregg was
employed by Golder, Thoma & Cressey, a venture capital firm.

Richard J. Lubasch has been our Executive Vice President - General Counsel
and Secretary since June 1999. Prior to that time he was Senior Vice
President - General Counsel and Secretary since our formation. Mr. Lubasch was
Vice President - General Counsel and Secretary of CCI from July 1987 until the
CCI Merger. Mr. Lubasch is also Senior Vice President - General Counsel and
Secretary of CoreComm and held those positions at Cellular Communications
International, Inc. until its sale in March 1999 and at Cellular Communications
of Puerto Rico until the CCPR Acquisition.

Bret Richter is Vice President - Corporate Finance and Development and is
primarily responsible for strategic initiatives and capital raising activities.
Prior to joining us in September 1994, Mr. Richter was a member of the media and
telecommunications investment banking group at Salomon Brothers where he
specialized in mergers and acquisitions.

Steven L. Wagner is our Vice President - Consumer Services and is Group
Managing Director of the National Media Services division in our U.K. operations
and part of the European team as Managing Director Consumer Services. Mr. Wagner
joined us in February 1994 as Group Director of Consumer Services of our U.K.
operations and was appointed Vice President - Consumer Services of NTL in June
1994. Mr. Wagner has spent the past fifteen years in consumer and business
related activities. Most recently, Mr. Wagner served as Vice President, Eastern
Region for the Walt Disney Company's premium television service, the Disney
Channel.

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DESCRIPTION OF THE NOTES

GENERAL

The new notes will be issued pursuant to an indenture, dated as of January
24, 2001, the closing date, between NTL and The Chase Manhattan Bank, as
Trustee. The following summary of selected provisions of the Indenture is not
complete and is qualified in its entirety by reference to the Indenture,
including the definitions therein of certain terms used below. The definitions
of certain terms used in the following summary are set forth below under
"-- Certain Definitions." In this "Description of the Notes," the term "NTL"
refers to NTL Communications Corp. and not any of its subsidiaries.

The notes will be unsecured obligations of NTL, ranking equal in right of
payment with all senior unsecured Indebtedness of NTL and senior in right of
payment to all subordinated Indebtedness of NTL.

The operations of NTL are conducted through its subsidiaries. NTL is
dependent upon the cash flow of its subsidiaries to meet its obligations,
including its obligations under the notes. As a result, the notes will be
effectively subordinated to all existing and future indebtedness and other
liabilities and commitments of NTL's subsidiaries with respect to the cash flow
and assets of those subsidiaries.

NTL Incorporated and NTL Delaware have no obligations under the notes.

Application will be made to list the new notes on the Luxembourg Stock
Exchange.

PRINCIPAL, MATURITY AND INTEREST

From the date of issuance of E200.0 million of old notes on January 24,
2001 and E100.0 million of old notes on February 8, 2001, the new notes to be
issued in this exchange offer will be limited in aggregate principal amount to
E300.0 million. Up to an additional E100.0 million aggregate principal amount of
notes (the "Additional Notes") may be issued at any time after the offering,
subject to the provisions of the Indenture described below under the caption "--
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock". If the
Additional Notes are issued more than one year after the closing date, NTL will
prepare an updated listing memorandum to facilitate the listing of the
Additional Notes with the Luxembourg Stock Exchange. The notes will accrue
interest at the rate of 12 3/8% per annum and will be payable in cash,
semi-annually in arrears, on February 1 and August 1 of each year, beginning on
August 1, 2001, to the holders of record on the immediately preceding January 15
and July 15, respectively. Interest on the notes will accrue from and including
the date of issuance, or the most recent date to which interest has been paid or
duly provided for, up to and including the date immediately preceding the date
on which interest is paid or duly provided for.

Interest on overdue principal and to the extent permitted by law on overdue
installments of interest will accrue at a rate equal to the rate borne by the
notes. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. A reference to a payment of interest in respect of the
notes includes a payment of special interest, if any, and a reference to a
payment of principal includes a reference to a payment of premium, if any.

The notes will be payable both as to principal and interest on presentation
of such notes if in certificated form at the offices or agencies of NTL
maintained for such purpose within the City and State of New York and/or London,
England or, at the option of NTL, payment of interest may be made by check
mailed to the holders of the notes at their respective addresses set forth in
the register of holders of notes or, if a holder so requests, by wire transfer
of immediately available funds to an account previously specified in writing by
such holder to NTL and the Trustee. Until otherwise designated by NTL, NTL's
office or agency in New York and London, respectively, will be the offices of
the Trustee maintained for such purpose. In addition, as described under the
caption "Listing," so long as the notes are listed on the Luxembourg Stock
Exchange, an agent for making payments on, and transfers of, notes will be
maintained in Luxembourg. The notes will be payable on maturity on February 1,
2008 at 100% of their principal amount and will be issued in registered form,
without coupons, and in denominations of E1,000 and integral multiples thereof.

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OPTIONAL REDEMPTION

Except as referred to herein under "-- Covenants -- Additional Amounts;
Optional Tax Redemption," the notes are not redeemable at NTL's option.

In the case of a redemption of any class of notes referred to herein under
"-- Covenants -- Additional Amounts; Optional Tax Redemption," redemption of
such notes shall be made at the redemption prices specified in the Indenture
plus accrued and unpaid interest, if any, to the applicable redemption date.

MANDATORY REDEMPTION AND REPURCHASE

NTL is not required to make mandatory redemption or sinking fund payments
with respect to the notes. NTL is required to make a Change of Control Offer (as
defined below) and an Asset Sale Offer (as defined below) with respect to a
repurchase of the notes under the circumstances described under the captions
"Change of Control" and "Asset Sale," respectively.

CHANGE OF CONTROL

If a Change of Control Triggering Event occurs, each holder of notes shall
have the right to require NTL to repurchase all or any part of such holder's
notes equal to E1,000 or an integral multiple thereof pursuant to the offer
described below (the "Change of Control Offer") at a purchase price equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase. The payment shall be referred to as the Change of
Control Payment. Within 40 days following any Change of Control Triggering
Event, NTL shall mail a notice to each holder, and, if and as long as the notes
are listed on the Luxembourg Stock Exchange, publish a notice in one leading
newspaper with circulation in Luxembourg, stating:

(1) that the Change of Control Offer is being made pursuant to the covenant
entitled "Change of Control" and that all notes tendered will be
accepted for payment;

(2) the purchase price and the purchase date, which shall be no earlier
than 30 days nor later than 40 days from the date such notice is
mailed. This date is referred to as the "Change of Control Payment
Date";

(3) that any notes not tendered will continue to accrue interest;

(4) that, unless NTL defaults in the payment of the Change of Control
Payment, all notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;

(5) that holders electing to have any notes purchased pursuant to a Change
of Control Offer will be required to surrender the notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
notes completed, to the paying agent at the address specified in the
notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date;

(6) that holders will be entitled to withdraw their election if the paying
agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
holder, the principal amount of notes delivered for purchase, and a
statement that such holder is withdrawing his election to have such
notes purchased; and

(7) that holders whose notes are being purchased only in part will be
issued new notes equal in principal amount to the unpurchased portion
of the notes surrendered, which unpurchased portion must be equal to
E1,000 in principal amount or an integral multiple of E1,000.

NTL will comply with the requirements of Rules 13e-4 and 14e-1 under the
Securities Exchange Act of 1934, and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with the repurchase of the notes in connection with a Change of Control
Triggering Event.

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On the Change of Control Payment Date, NTL will, to the extent lawful:

(1) accept for payment notes or portions thereof tendered pursuant to the
Change of Control Offer;

(2) deposit with the paying agent an amount equal to the Change of Control
Payment in respect of all notes or portions thereof so tendered; and

(3) deliver or cause to be delivered to the Trustee the notes so accepted
together with an Officers' Certificate stating the notes or portions of
the notes tendered to NTL.

The paying agent shall promptly mail to each holder of notes so accepted
or, if such a holder requests, wire transfer immediately available funds to an
account previously specified in writing by such holder to NTL and the paying
agent, payment in an amount equal to the purchase price for such notes, and, if
such notes are in certificated form, payment may be made at the office of the
paying agent in Luxembourg. The Trustee shall promptly authenticate and mail to
each holder a new note equal in principal amount to any unpurchased portion of
the notes surrendered, if any; provided that each such new note shall be in a
principal amount of E1,000 or an integral multiple of E1,000. NTL will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.

Except as described above with respect to a Change of Control Triggering
Event, the Indenture does not contain any other provision that permits the
holders of the notes to require that NTL repurchase or redeem the notes in the
event of a takeover, recapitalization or similar restructuring. The Indenture
contains covenants which may afford holders of the notes protection in the event
of a highly leveraged transaction, reorganization, restructuring, merger or
similar transaction, including the Change of Control provision described above
and the provisions described under "-- Incurrence of Indebtedness and Issuance
of Preferred Stock" and "-- Merger, Consolidation or Sale of Assets" below. Each
of those covenants is, however, subject to exceptions which may permit NTL to be
involved in a highly leveraged transaction that may adversely affect the holders
of the notes.

The Change of Control Offer requirement of the notes may, in certain
circumstances, make more difficult or discourage a takeover of NTL, and, thus,
the removal of incumbent management. Management has not entered into any
agreement or plan involving a Change of Control, although it is possible that
NTL would decide to do so in the future. Subject to the limitations discussed
below, NTL could, in the future, enter into various transactions including
acquisitions, refinancings or other recapitalizations, that would not constitute
a Change of Control Triggering Event under the Indenture, but that could
increase the amount of indebtedness outstanding at such time or otherwise affect
NTL's capital structure or credit ratings.

The indentures for our other outstanding notes also contain change of
control provisions.

NTL's ability to pay cash to the holders of notes pursuant to a Change of
Control Offer may be limited by NTL's then existing financial resources. See
Risk Factors "-- Our substantial leverage could adversely affect the financial
health of the company", "-- We are a holding company that is dependent upon cash
flow from our subsidiaries to meet our obligations -- our ability to access that
cash flow may be limited in some circumstances" and "In some circumstances
involving a change of control of our parent, we will be required to repurchase
some of our indebtedness including the notes -- if this occurs, we may not have
the financial resources necessary to make those repurchases". Any future credit
agreements or other agreements relating to indebtedness of NTL may, contain
prohibitions or restrictions on NTL's ability to effect a Change of Control
Payment. In the event a Change of Control Triggering Event occurs at a time when
such prohibitions or restrictions are in effect, NTL could seek the consent of
its lenders to the purchase of notes and other Indebtedness containing change of
control provisions or could attempt to refinance the borrowings that contain
such prohibition. If NTL does not obtain such a consent or repay such
borrowings, NTL will be effectively prohibited from purchasing notes. In such
case, NTL's failure to purchase tendered notes would constitute an Event of
Default under the Indenture. Moreover, the events that constitute a Change of
Control or require an Asset Sale Offer under the Indenture may also constitute
events of default under existing or future debt instruments or credit agreements
of NTL or NTL's subsidiaries. Such events of default may permit the lenders
under such debt instruments or credit agreements to accelerate the debt and, if
such debt is not paid or repurchased, to enforce their security interests in
what may be all or substantially all of the assets of NTL's Subsidiaries. Any
such enforcement may limit NTL's ability to raise cash to repay or repurchase
the notes.
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NTL will not be required to make a Change of Control Offer in the event NTL
enters into a transaction with management or their affiliates who are Permitted
Holders. The definition of Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of all or substantially
all of NTL's assets. Although there is a developing body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of notes to require NTL to repurchase such notes as a result of a sale,
lease, transfer, conveyance or other disposition of less than all of the assets
of NTL and its Subsidiaries to another Person may be uncertain.

ASSET SALE

The Indenture provides that NTL will not and will not permit any of its
Restricted Subsidiaries to cause, make or suffer to exist any Asset Sale,
unless:

(1) no Default exists or is continuing immediately prior to and after
giving effect to such Asset Sale;

(2) NTL, or the Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to
the fair market value (evidenced for purposes of this covenant by
a resolution of the Board of Directors set forth in an Officers'
Certificate delivered to the Trustee) of the assets sold or
otherwise disposed of; and

(3) at least 80% of the consideration therefor received by NTL or
such Restricted Subsidiary is in the form of:

(a) Cash Equivalents;

(b) Replacement Assets;

(c) publicly traded Equity Interests of a Person who is, directly
or indirectly, engaged primarily in one or more Cable
Businesses; provided, however, that NTL or the Restricted
Subsidiary shall Monetize the Equity Interests by sale to one
or more Persons (other than to NTL or a Subsidiary thereof) at
a price not less than the fair market value thereof within 180
days of the consummation of the Asset Sale; or

(d) any combination of the foregoing clauses (a) through (c);

provided, however, that the amount of:

(x) any liabilities, as shown on NTL's or the Restricted
Subsidiary's most recent balance sheet or in the notes
thereto, of NTL or any Restricted Subsidiary, other than
liabilities that are by their terms subordinated to the
notes, that are assumed by the transferee of any such
assets; and

(y) any notes or other obligations received by NTL or any
Restricted Subsidiary from such transferee that are within
five Business Days converted by NTL or the Restricted
Subsidiary into cash, shall be deemed to be Cash
Equivalents, to the extent of the Cash Equivalents received
in such conversion, for purposes of this clause (3).

Within 360 days after any Asset Sale, NTL, or the Restricted Subsidiary, as
the case may be, will cause the Net Proceeds from the Asset Sale:

(1) to be used to permanently reduce Indebtedness of a Restricted
Subsidiary; or

(2) to be invested or reinvested in Replacement Assets.

Pending final application of the Net Proceeds, NTL may temporarily reduce
revolving credit borrowings or otherwise invest the Net Proceeds in any manner
that is not prohibited by the Indenture.

Any Net Proceeds from any Asset Sale that are not used or reinvested as
provided in the preceding sentence constitute Excess Proceeds. When the
aggregate amount of Excess Proceeds exceeds $15.0 million, NTL will make an
Asset Sale Offer to all holders of notes and Other Qualified Notes to purchase
the maximum principal amount of notes and Other Qualified Notes, determined on a
pro rata basis according to the accreted value or
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principal amount, as the case may be, of the notes and the Other Qualified Notes
that may be purchased out of the Excess Proceeds:

(1) with respect to the Other Qualified Notes, based on the terms set
forth in the indenture related to each issue of the Other Qualified
Notes; and

(2) with respect to the notes, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus
accrued and unpaid interest, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth
in the Indenture.

To the extent that the aggregate principal amount or accreted value, as the
case may be, of notes and Other Qualified Notes tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, NTL may use such deficiency for
general corporate purposes. If the aggregate principal amount or accreted value,
as the case may be, of notes and Other Qualified Notes surrendered by holders
thereof exceeds the amount of Excess Proceeds then the remaining Excess Proceeds
will be allocated pro rata according to accreted value or principal amount, as
the case may be, to the notes and each issue of the Other Qualified Notes, and
the Trustee will select the notes to be purchased from the amount allocated to
the notes on the basis set forth under "Selection and Notice" below. Upon
completion of such offers to purchase each of the notes and the Other Qualified
Notes, the amount of Excess Proceeds will be reset at zero.

Notwithstanding the foregoing, NTL and its Subsidiaries may:

(1) sell, lease, transfer, convey or otherwise dispose of assets or
property acquired after October 14, 1993, by NTL or any Subsidiary
in a sale-and-leaseback transaction so long as the proceeds of such
sale are applied within five Business Days to permanently reduce
Indebtedness of a Restricted Subsidiary or if there is no such
Indebtedness or such proceeds exceed the amount of such
Indebtedness then such proceeds or excess proceeds are reinvested
in Replacement Assets within 360 days after such sale, lease,
transfer, conveyance or disposition;

(2) (x) swap or exchange assets or property with a Cable Controlled
Subsidiary; or

(y) issue, sell, lease, transfer, convey or otherwise dispose of
equity securities of any of NTL's Subsidiaries to a Cable
Controlled Subsidiary, in each of cases (x) and (y) so long as

(A) the ratio of Indebtedness to Annualized Pro Forma EBITDA of
NTL after such transaction is equal to or less than the ratio
of Indebtedness to Annualized Pro Forma EBITDA of NTL
immediately preceding such transaction; provided, however,
that if the ratio of Indebtedness to Annualized Pro Forma
EBITDA of NTL immediately preceding such transaction is 6:1
or less, then the ratio of Indebtedness to Annualized Pro
Forma EBITDA of NTL may be 0.5 greater than such ratio
immediately preceding such transaction; and

(B) either:

(I) the assets so contributed consist solely of a license
to operate a Cable Business and the Net Households
covered by all of the licenses to operate cable and
telephone systems held by NTL and its Restricted
Subsidiaries immediately after and giving effect to
such transaction equals or exceeds the number of Net
Households covered by all of the licenses to operate
cable and telephone systems held by NTL and its
Restricted Subsidiaries immediately prior to such
transaction; or

(II) the assets so contributed consist solely of Cable
Assets and the value of the Capital Stock received,
immediately after and giving effect to such
transaction, as determined by an investment banking
firm of recognized standing with knowledge of the Cable
Business, equals or exceeds the value of the Cable
Assets exchanged for such Capital Stock; or

(3) issue, sell, lease, transfer, convey or otherwise dispose of Equity
Interests of NTL, or any Capital Stock Sales Proceeds therefrom, to
any Person including Non-Restricted Subsidiaries.

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SELECTION AND NOTICE

If less than all of the notes are to be redeemed at any time, selection of
notes for redemption will be made by the Trustee in compliance with the
requirements of any securities exchange on which the notes are listed. In the
absence of any requirements of any securities exchange or if the notes are not
so listed, selection of the notes to be redeemed will be made on a pro rata
basis, provided that no notes of E1,000 or less shall be redeemed in part.
Notice of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of notes to be
redeemed at its registered address. If any note is to be redeemed in part only,
the notice of redemption that relates to such note shall state the portion of
the principal amount thereof to be redeemed. A new note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original note. On and after the redemption
date, interest ceases to accrue on notes or portions of them called for
redemption.

If the notes are listed on the Luxembourg Stock Exchange, NTL will publish
any redemption notice in a daily newspaper with general circulation in
Luxembourg.

COVENANTS

RESTRICTED PAYMENTS

The Indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any distribution on account of
NTL's or any of its Restricted Subsidiaries' Equity Interests,
other than:

(x) dividends or distributions payable in Equity Interests, other
than Disqualified Stock, of NTL or such Restricted Subsidiary;

(y) dividends or distributions payable to NTL or any Wholly Owned
Subsidiary of NTL; or

(z) pro rata dividends or pro rata distributions payable by a
Restricted Subsidiary;

(2) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of NTL, other than any such Equity Interests
owned by NTL or any Wholly Owned Subsidiary of NTL;

(3) voluntarily purchase, redeem or otherwise acquire or retire for
value any Indebtedness that is subordinated to the notes; or

(4) make any Restricted Investment.

All such payments and other actions set forth in clauses (1) through (4)
above are collectively referred to as Restricted Payments.

NTL or the Restricted Subsidiary may make a Restricted Payment if, at the
time of such Restricted Payment:

(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and

(b) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by NTL and its Restricted
Subsidiaries after the Issuance Date, including Restricted
Payments permitted by clauses (2) through (10) of the next
succeeding paragraph, is less than the sum of:

(x) the difference between Cumulative EBITDA and 1.5 times
Cumulative Interest Expense; plus

(y) Capital Stock Sale Proceeds; plus

(z) cash received by NTL or a Restricted Subsidiary from a
Non-Restricted Subsidiary (other than cash which is or is
required to be repaid or returned to such Non-Restricted
Subsidiary); provided, however, that to the extent that
any Restricted Investment that was made after the date of
the Indenture is sold for cash or otherwise

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liquidated or repaid for cash, the amount credited
pursuant to this clause (z) shall be the lesser of:

(A) the cash received with respect to such sale,
liquidation or repayment of such Restricted
Investment, less the cost of such sale, liquidation or
repayment, if any; and

(B) the initial amount of such Restricted Investment, in
each case as determined in good faith by NTL's Board
of Directors.

The foregoing provisions will not prohibit:

(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would have complied with the provisions of the Indenture;

(2) (x) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of NTL or any Restricted Subsidiary; or

(y) an Investment in any Person;

in each case, in exchange for, or out of the proceeds of, the
substantially concurrent sale, other than to a Restricted Subsidiary
of NTL, of other Equity Interests other than any Disqualified Stock)
of NTL provided that NTL delivers to the Trustee:

(A) with respect to any transaction involving in excess of
$5.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such
transaction is approved by a majority of the directors on
the Board of Directors; and

(B) with respect to any transaction involving in excess of
$25.0 million, an opinion as to the fairness to NTL or the
Restricted Subsidiary from a financial point of view
issued by an investment banking firm of national standing
with high yield experience, together with an Officers'
Certificate to the effect that such opinion complies with
this clause (2);

(3) Investments by NTL or any Restricted Subsidiary in a Non-Controlled
Subsidiary which:

(A) has no Indebtedness on a consolidated basis other than
Indebtedness incurred to finance the purchase of equipment used
in a Cable Business;

(B) has no restrictions (other than restrictions imposed or
permitted by the Indenture or the indentures governing the Other
Qualified Notes or any other instrument governing unsecured
indebtedness of NTL which is pari passu with the notes) on its
ability to pay dividends or make any other distributions to NTL
or any of its Restricted Subsidiaries;

(D) uses the proceeds of such Investment for constructing a Cable
Business or the working capital needs of a Cable Business;

(4) the redemption, purchase, defeasance, acquisition or retirement of
Indebtedness that is subordinated to the notes (including premium,
if any, and accrued and unpaid interest) made by exchange for, or
out of the proceeds of the substantially concurrent sale, other
than to a Restricted Subsidiary of NTL, of:

(A) Equity Interests of NTL; or

(B) Refinancing Indebtedness permitted to be incurred under the
"Incurrence of Indebtedness and Issuance of Preferred Stock"
covenant;

(5) Investments by NTL or any Restricted Subsidiary in a Non-Controlled
Subsidiary which is or will be a Cable Business in an amount not to
exceed $100.0 million in the aggregate plus the sum of:

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(A) cash received by NTL or a Restricted Subsidiary from a
Non-Restricted Subsidiary (other than cash which is or is
required to be repaid or returned to such Non-Restricted
Subsidiary); and

(B) Capital Stock Sale Proceeds, excluding the aggregate net sale
proceeds to be received upon conversion of the Convertible
Subordinated Notes;

(6) Investments by NTL or any Restricted Subsidiary in Permitted
Non-Controlled Assets;

(7) Investments by NTL or any Restricted Subsidiary in SDN Limited, a
joint venture organized to operate a digital terrestrial television
multiplex, in an amount not exceeding L11.4 million;

(8) the extension by NTL or any Restricted Subsidiary of trade credit
to a Non-Restricted Subsidiary extended on usual and customary
terms in the ordinary course of business, provided that the
aggregate amount of such trade credit shall not exceed $25.0
million at any one time;

(9) the payment of cash dividends on the Preferred Stock accruing on or
after February 15, 2004 or any mandatory redemption or repurchase
of the Preferred Stock, in each case, in accordance with the
Certificate of Designations therefor; and

(10) the exchange of all of the outstanding shares of Preferred Stock
for Subordinated Debentures in accordance with the Certificate of
Designation for the Preferred Stock.

Any Investment in a Subsidiary, other than the issuance, transfer or other
conveyance of Equity Interests of NTL or any Capital Stock Sales Proceeds
therefrom, that is designated by the Board of Directors as a Non-Restricted
Subsidiary shall become a Restricted Payment made on the date of such
designation in the amount of the greater of:

(x) the book value of such Subsidiary on the date such Subsidiary
becomes a Non-Restricted Subsidiary; and

(y) the fair market value of such Subsidiary on such date as
determined:

(A) in good faith by the Board of Directors of such Subsidiary if
such fair market value is determined to be less than $25.0
million; and

(B) by an investment banking firm of national standing with high
yield underwriting expertise if such fair market value is
determined to be in excess of $25.0 million.

Not later than the fifth Business Day after making any Restricted Payment
(other than those referred to in sub-clause (8) of the second paragraph
preceding this paragraph), NTL shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant "Restricted
Payments" were computed, which calculations may be based upon NTL's latest
available financial statements.

INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK

The Indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable with respect
to any Indebtedness, including Acquired Debt, and that NTL will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock that is Disqualified Stock; provided,
however, that NTL may incur Indebtedness or issue shares of Disqualified Stock
and any of its Restricted Subsidiaries may issue shares of preferred stock that
is Disqualified Stock if after giving effect to such issuance or incurrence on a
pro forma basis, the sum of:

(x) Indebtedness of NTL and its Restricted Subsidiaries, on a
consolidated basis;

(y) the liquidation value of outstanding preferred stock of Restricted
Subsidiaries; and

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(z) the aggregate amount payable by NTL and its Restricted
Subsidiaries, on a consolidated basis, upon redemption of
Disqualified Stock to the extent such amount is not included in the
preceding clause (y)

shall be less than the product of Annualized Pro Forma EBITDA for the latest
fiscal quarter for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued multiplied by 7.0, determined on
a pro forma basis, including a pro forma application of the net proceeds
therefrom, as if the additional Indebtedness had been incurred, or the
Disqualified Stock or preferred stock had been issued, as the case may be, at
the beginning of such quarter.

The foregoing limitations will not apply to:

(a) the incurrence by NTL or any Restricted Subsidiary of Indebtedness
pursuant to the Credit Facility;

(b) the issuance by any Restricted Subsidiary of preferred stock (other
than Disqualified Stock) to NTL, any Restricted Subsidiary of NTL
or the holders of Equity Interests in any Restricted Subsidiary on
a pro rata basis to such holders;

(c) the incurrence of Indebtedness or the issuance of preferred stock
by NTL or any of its Restricted Subsidiaries the proceeds of which
are (or the credit support provided by any such Indebtedness is),
in each case, used to finance the construction, capital expenditure
and working capital needs of a Cable Business (including, without
limitation, payments made pursuant to any License), the acquisition
of Cable Assets or the Capital Stock of a Qualified Subsidiary;

(d) the incurrence by NTL or any of its Restricted Subsidiaries of
additional Indebtedness in an outstanding aggregate principal
amount not to exceed $100.0 million at any time;

(e) the incurrence by NTL or any Restricted Subsidiary of any Permitted
Acquired Debt;

(f) the incurrence by NTL or any Subsidiary of Indebtedness issued in
exchange for, or the proceeds of which are used to extend,
refinance, renew, replace, or refund the notes, Existing
Indebtedness or Indebtedness referred to in clauses (a), (b), (c),
(d) or (e) above or Indebtedness incurred pursuant to the preceding
paragraph (the "Refinancing Indebtedness"); provided, however,
that:

(1) the principal amount of, and any premium payable in respect of,
such Refinancing Indebtedness shall not exceed the principal
amount of Indebtedness so extended, refinanced, renewed,
replaced or refunded (plus the amount of reasonable expenses
incurred in connection therewith);

(2) the Refinancing Indebtedness shall have:

(A) a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness
being extended, refinanced, renewed, replaced or refunded;
and

(B) a stated maturity no earlier than the stated maturity of,
the Indebtedness being extended, refinanced, renewed,
replaced or refunded; and

(3) the Refinancing Indebtedness shall be subordinated in right of
payment to the notes as and to the extent of the Indebtedness
being extended, refinanced, renewed, replaced or refunded;

(g) the issuance of the Preferred Stock in lieu of payment of cash
interest on the Subordinated Debentures or the incurrence by NTL of
Indebtedness represented by the Subordinated Debentures upon the
exchange of the Preferred Stock in accordance with the Certificate
of Designations therefor;

(h) Indebtedness under Exchange Rate Contracts, provided that such
Exchange Rate Contracts are related to payment obligations under
Existing Indebtedness or Indebtedness incurred under this

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paragraph or the preceding paragraph that are being hedged thereby,
and not for speculation and that the aggregate notional amount
under each such Exchange Rate Contract does not exceed the
aggregate payment obligations under such Indebtedness;

(i) Indebtedness under Interest Rate Agreements, provided that the
obligations under such agreements are related to payment
obligations on Existing Indebtedness or Indebtedness otherwise
incurred pursuant to this paragraph or the preceding paragraph, and
not for speculation;

(j) the incurrence of Indebtedness between NTL and any Restricted
Subsidiary, between or among Restricted Subsidiaries and between
any Restricted Subsidiary and other holders of Equity Interests of
such Restricted Subsidiary (or other Persons providing funding on
their behalf) on a pro rata basis and on substantially identical
principal financial terms, provided, however, that if any such
Restricted Subsidiary that is the payee of any such Indebtedness
ceases to be a Restricted Subsidiary or transfers such Indebtedness
(other than to NTL or a Restricted Subsidiary of NTL), such events
shall be deemed, in each case, to constitute the incurrence of such
Indebtedness by NTL or by a Restricted Subsidiary, as the case may
be, at the time of such event; and

(k) Indebtedness of NTL and/or any Restricted Subsidiary in respect of
performance bonds of NTL or any Subsidiary or surety bonds provided
by NTL or any Restricted Subsidiary received in the ordinary course
of business in connection with the construction or operation of a
Cable Business.

Any redesignation of a Non-Restricted Subsidiary as a Restricted Subsidiary
shall be deemed for purposes of the foregoing covenant to be an incurrence of
Indebtedness by NTL and its Restricted Subsidiaries of the Indebtedness of such
Non-Restricted Subsidiary as of the time of such redesignation to the extent
such Indebtedness does not already constitute Indebtedness of NTL or one of its
Restricted Subsidiaries.

LIENS

The Indenture provides that neither NTL nor any of its Restricted
Subsidiaries may directly or indirectly create, incur, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired, or any income or profits
therefrom or assign or convey any right to receive income therefrom, except:

(1) Permitted Liens;

(2) Liens securing Indebtedness and related obligations incurred under
clauses (a), (c), (d), (e), (h), (i) and (k) of the second
paragraph of the "Incurrence of Indebtedness and Issuance of
Preferred Stock" covenant;

(3) Liens on the assets acquired or leased with the proceeds of
Indebtedness permitted to be incurred under the "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant; and

(4) Liens securing Refinancing Indebtedness permitted to be incurred
under the "Incurrence of Indebtedness and Issuance of Preferred
Stock" covenant; provided that the Refinancing Indebtedness so
issued and secured by such Lien shall not be secured by any
property or assets of NTL or any of its Restricted Subsidiaries
other than the property or assets subject to the Liens securing
such Indebtedness being refinanced.

DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES

The Indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to:

(1) (a) pay dividends or make any other distributions to NTL or any of
its Subsidiaries:

(A) on its Capital Stock; or

(B) with respect to any other interest or participation in, or
measured by, its profits; or

(b) pay any indebtedness owed to NTL or any of its Subsidiaries; or

(2) make loans or advances to NTL or any of its Subsidiaries; or

(3) transfer any of its properties or assets to NTL or any of its
Subsidiaries,

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except for such encumbrances or restrictions existing under or by reason of:

(a) Existing Indebtedness as in effect on the Issuance Date;

(b) the Indenture relating to the notes;

(c) any agreement covering or relating to Indebtedness permitted to be
incurred under clause (a), (b), (c), (d), (e), (h) or (i) (but
only, in the case of clause (h) or (i), to the extent contemplated
by the then-existing Credit Facility) of the second paragraph of
the "Incurrence of Indebtedness and Issuance of Preferred Stock"
covenant, provided that the provisions of such agreement permit any
action referred to in clause (1) above in aggregate amounts
sufficient to enable the payment of interest and principal and
mandatory repurchases pursuant to the terms of the Indenture and
the notes but provided further that:

(x) any such agreement may nevertheless encumber, prohibit or
restrict any action referred to in clause (1) above if an
event of default under such agreement has occurred and is
continuing or would occur as a result of any such action; and

(y) any such agreement may nevertheless contain:

(I) restrictions limiting the payment of dividends or the
making of any other distributions to all or a portion of
excess cash-flow (or any similar formulation thereof);
and

(II) subordination provisions governing Indebtedness owed to
NTL or any Restricted Subsidiary;

(d) applicable law;

(e) any instrument governing Indebtedness or Capital Stock of a Person
acquired by NTL or any of its Subsidiaries as in effect at the time
of such acquisition (except to the extent such Indebtedness was
incurred in connection with such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or
assets of the Person, so acquired; provided that the EBITDA of such
Person is not taken into account in determining whether such
acquisition was permitted by the terms of the Indenture;

(f) customary nonassignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;

(g) provisions of joint venture or stockholder agreements, so long as
such provisions are determined by a resolution of the Board of
Directors to be, at the time of such determination, customary for
such agreements;

(h) with respect to clause (3) above, purchase money obligations for
property acquired in the ordinary course of business or the
provisions of any agreement with respect to any Asset Sale (or
transaction which, but for its size, would be an Asset Sale),
solely with respect to the assets being sold; or

(i) permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Refinancing Indebtedness
are determined by a resolution of the Board of Directors to be no
more restrictive than those contained in the agreements governing
the Indebtedness being refinanced.

MERGER, CONSOLIDATION OR SALE OF ASSETS

The Indenture provides that NTL may not consolidate or merge with or into,
whether or not NTL is the surviving corporation, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions to, another corporation, Person or
entity unless:

(1) NTL is the surviving corporation or the entity or the Person formed
by or surviving any such consolidation or merger, if other than
NTL, or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made is a corporation
organized or existing under
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the laws of the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands or of the United States,
any state thereof or the District of Columbia;

(2) the entity or Person formed by or surviving any such consolidation
or merger, if other than NTL, or the entity or Person to which such
sale, assignment, transfer, lease, conveyance or other disposition
will have been made assumes all the Obligations, including the due
and punctual payment of Additional Amounts as defined in the
Indenture if the surviving corporation is a corporation organized
or existing under the laws of the United Kingdom, the Netherlands,
the Netherlands Antilles, Bermuda or the Cayman Islands, of NTL,
pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee, under the notes and the Indenture;

(3) immediately after such transaction no Default or Event of Default
exists;

(4) NTL or any entity or Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been
made will have a ratio of Indebtedness to Annualized Pro Forma
EBITDA equal to or less than the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL immediately preceding the
transaction provided, however, that if the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL immediately preceding such
transaction is 6:1 or less, then the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL may be 0.5 greater than such
ratio immediately preceding such transaction; and

(5) such transaction would not result in the loss of any material
authorization or Material License of NTL or its Subsidiaries.

ADDITIONAL AMOUNTS; OPTIONAL TAX REDEMPTION

The Indenture provides that the "Payment of Additional Amounts" provision
in the Indenture, relating to United Kingdom, Netherlands, Netherlands Antilles,
Bermuda and Cayman Islands withholding and other United Kingdom, Netherlands,
Netherlands Antilles, Bermuda and Cayman Islands taxes, and the "Optional Tax
Redemption" provision in the Indenture relating to NTL's option to redeem the
notes under specified circumstances if Additional Amounts are payable, apply to
the notes in specified circumstances. The provisions of the Indenture relating
to the payment of Additional Amounts will only apply in the event that NTL
becomes, or a successor to NTL is, a corporation organized or existing under the
laws of the United Kingdom, the Netherlands, the Netherlands Antilles, Bermuda
or the Cayman Islands. In such circumstances, all payments made by NTL on the
notes will be made without deduction or withholding, for or on account of, any
and all present or future taxes, duties, assessments, or governmental charges of
whatever nature unless the deduction or withholding of such taxes, duties,
assessments or governmental charges is then required by law. If any deduction or
withholding for or on account of any present or future taxes, assessments or
other governmental charges of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands, or any political
subdivision or taxing authority thereof or therein, shall at any time be
required in respect of any amounts to be paid by NTL under the notes, NTL will
pay or cause to be paid such additional amounts ("Additional Amounts") as may be
necessary in order that the net amounts received by a holder of the notes after
such deduction or withholding shall be not less than the amounts specified in
the notes to which the holder of such notes is entitled; provided, however, that
NTL shall not be required to make any payment of Additional Amounts for or on
account of:

(1) any tax, assessment or other governmental charge to the extent
such tax, assessment or other governmental charge would not have
been imposed but for:

(a) the existence of any present or former connection between such
holder, or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such holder, if
such holder is an estate, nominee, trust, partnership or
corporation, other than the holding of the notes or the receipt
of amounts payable in respect of the notes and the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or
the Cayman Islands or any political subdivision or taxing
authority thereof or therein, including, without limitation,
such

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holder or such fiduciary, settlor, beneficiary, member,
shareholder or possessor, being or having been a citizen or
resident thereof or being or having been present or engaged in
trade or business therein or having had a permanent
establishment therein; or

(b) the presentation of the notes, where presentation is required,
for payment on a date more than 30 days after the date on which
such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later, except to
the extent that the holder would have been entitled to
Additional Amounts had the notes been presented on the last day
of such period of 30 days;

(2) any governmental charge that is imposed or withheld by reason of
the failure to comply by the holder of the notes or, if different,
the beneficial owner of the interest payable on the notes, with a
timely request of NTL addressed to such holder or beneficial owner
to provide information, documents or other evidence concerning the
nationality, identity or connection with the taxing jurisdiction of
such holder or beneficial owner which is required or imposed by a
statute, regulation or administrative practice of the taxing
jurisdiction as a precondition to exemption from all or part of
such tax assessment or governmental charge;

(3) any estate, inheritance, gift, sales, transfer, personal property
or similar tax assessment or other governmental charge;

(4) any tax assessment or other governmental charge which is
collectible otherwise than by withholding from payments of
principal amount, redemption amount, Change of Control Payment or
interest with respect to a note or withholding from the proceeds of
a sale or exchange of a note;

(5) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal amount,
redemption amount, Change of Control Payment or interest with
respect to a note, if such payment can be made, and is in fact
made, without such withholding by any other paying agent located
inside the United States;

(6) any tax, assessment or other governmental charge imposed on a
holder that is not the beneficial owner of a note to the extent
that the beneficial owner would not have been entitled to the
payment of any such Additional Amounts had the beneficial owner
directly held the note; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above;

nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on the notes to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the holder of the notes.

The notes may be redeemed at the option of NTL, in whole but not in part,
upon not less than 30 nor more than 60 days notice, at any time upon the
circumstances set forth below. The redemption price will be equal to the
principal amount thereof plus accrued and unpaid interest to the date fixed for
redemption if after the Issuance Date there has occurred any change in or
amendment to the laws or any regulations or official rulings promulgated
thereunder of the United Kingdom, the Netherlands, the Netherlands Antilles,
Bermuda or the Cayman Islands, or any political subdivision or taxing authority
thereof or therein, or any change in or amendment to the official application or
interpretation of such laws, regulation or rulings which becomes effective after
the Issuance Date, as a result of which NTL is or would be so required on the
next succeeding Interest Payment Date to pay Additional Amounts with respect to
the notes with respect to withholding taxes imposed by the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands, or any
political subdivision or taxing authority thereof or therein, a "Withholding
Tax" and such Withholding Tax is imposed at a rate that exceeds the rate (if
any) at which any Withholding Tax was imposed on the Issuance Date provided
that:

(1) this paragraph shall not apply to the extent that, at the Relevant
Date, it was known or would have been known had professional advice
of a nationally recognized accounting firm in the United Kingdom,
Netherlands, Netherlands Antilles, Bermuda or the Cayman Islands,
as the case may

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be, been sought, that a Change in Tax Law in the United Kingdom,
the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands, was to occur after the Issuance Date;

(2) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which NTL would be obliged to pay
such Additional Amounts were a payment in respect of the notes then
due;

(3) at the time such notice of redemption is given, such obligation to
pay such Additional Amount remains in effect; and

(4) the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures available to NTL.

The notes may also be redeemed, in whole but not in part, at any time upon
the circumstances set forth below. The redemption price will be equal to the
principal amount of the notes plus accrued and unpaid interest to the date fixed
for redemption if the person formed after the Issuance Date by a consolidation,
amalgamation, reorganization, reconstruction or other similar arrangement of NTL
or the person into which NTL is merged after the Issuance Date or to which NTL
conveys, transfers or leases its properties and assets after the Issuance
substantially as an entirety (collectively, a "Subsequent Consolidation") is
required, as a consequence of such Subsequent Consolidation and as a consequence
of a Change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands occurring after the date of such
Subsequent Consolidation to pay Additional Amounts with respect to notes with
respect to Withholding Tax and such Withholding Tax is imposed at a rate that
exceeds the rate, if any, at which Withholding Tax was or would have been
imposed on the date of such Subsequent Consolidation. This paragraph shall not
apply to the extent that, at the date of such Subsequent Consolidation it was
known or would have been known had professional advice of a nationally
recognized accounting firm in the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands, as the case may be, been
sought, that a Change in Tax Law in the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands, was to occur after such
date.

NTL will also pay, or make available for payment, to holders on the
redemption date any Additional Amounts resulting from the payment of such
redemption price.

TRANSACTIONS WITH AFFILIATES

The Indenture provides that NTL will not, and will not permit any of its
Restricted Subsidiaries to, sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or amend any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless:

(1) such Affiliate Transaction is on terms that are no less favorable
to NTL or the relevant Subsidiary than those that could have been
obtained in a comparable transaction by NTL or such Subsidiary with
an unrelated Person; and

(2) NTL delivers to the Trustee:

(a) with respect to any Affiliate Transaction involving aggregate
payments in excess of $5.0 million or any series of Affiliate
Transactions with an Affiliate involving aggregate payments in
excess of $5.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (1) above and such
Affiliate Transaction is approved by a majority of the
disinterested directors on the Board of Directors; and

(b) with respect to any Affiliate Transaction or any series of
Affiliate Transactions involving aggregate payments in excess of
$25.0 million, an opinion as to the fairness to NTL or such
Subsidiary from a financial point of view issued by an
investment banking firm of national standing with high yield
experience together with an Officers' Certificate to the effect
that such opinion complies with this clause (b);
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provided, however, that notwithstanding the foregoing provisions, the
following shall not be deemed to be Affiliate Transactions:

(1) any employment agreement entered into by NTL or any of its
Subsidiaries in the ordinary course of business and consistent with
the past practice of NTL or its predecessor or such Subsidiary;

(2) transactions between or among NTL and/or its Restricted
Subsidiaries;

(3) transactions permitted by the provisions of the Indenture described
above under the covenant "Restricted Payments";

(4) Liens permitted under the Liens covenant which are granted by NTL
or any of its Subsidiaries to an unrelated Person for the benefit
of NTL or any other Subsidiary of NTL;

(5) any transaction pursuant to an agreement in effect on the Issuance
Date;

(6) the incurrence of Indebtedness by a Restricted Subsidiary where
such Indebtedness is owed to the holders of the Equity Interests of
such Restricted Subsidiary on a pro rata basis and on substantially
identical principal financial terms;

(7) management, operating, service or interconnect agreements entered
into in the ordinary course of business with any Cable Business in
which NTL or any Restricted Subsidiary has an Investment and which
is not a Cable Controlled Subsidiary, and of which no Affiliate of
NTL is an Affiliate other than as a result of such Investment; and

(8) any tax sharing agreement.

REPORTS

Whether or not required by the rules and regulations of the SEC, so long as
any notes are outstanding, NTL will file with the SEC and furnish to the holders
of notes all quarterly and annual financial information required to be contained
in a filing with the SEC on Forms 10-Q and 10-K, or the equivalent of those
reports under the Exchange Act for foreign private issuers in the event NTL
becomes a corporation organized under the laws of the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands, including
a "Management's Discussion and Analysis of Results of Operations and Financial
Condition" and, with respect to the annual information only, a report by NTL's
certified independent accountants, in each case, as required by the rules and
regulations of the SEC as in effect on the Issuance Date. If and so long as the
notes are listed on the Luxembourg Stock Exchange, copies of such reports will
be available at the specified office of the listing agent in Luxembourg. NTL
does not publish unconsolidated financial reports.

EVENTS OF DEFAULT AND REMEDIES

The Indenture provides that each of the following constitutes an Event of
Default:

(1) default for 30 days in the payment when due of interest and
Additional Amounts, if applicable, on the notes;

(2) default in payment when due of principal on the notes;

(3) failure by NTL to comply with the provisions described under the
covenants "Change of Control," "Restricted Payments" or "Incurrence
of Indebtedness and Issuance of Preferred Stock";

(4) failure by NTL for 60 days after notice to comply with certain
other covenants and agreements contained in the Indenture or the
notes;

(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by NTL or any of its Restricted
Subsidiaries, or the payment of which is guaranteed by NTL or any
of its Restricted

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Subsidiaries, whether such Indebtedness or guarantee now exists, or
is created after the Issuance Date, which default:

(a) is caused by a failure to pay when due principal or interest on
such Indebtedness within the grace period provided in such
Indebtedness, which Payment Default continues beyond any
applicable grace period; or

(b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more;

(6) failure by NTL or any Restricted Subsidiary of NTL to pay final
judgments (other than any judgment as to which a reputable
insurance company has accepted full liability) aggregating in
excess of $5.0 million, which judgments are not stayed within 60
days after their entry;

(7) certain events of bankruptcy or insolvency with respect to NTL or
any of its Material Subsidiaries; and

(8) the revocation of a Material License.

If any Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of then outstanding notes may
declare all the notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to NTL or any Material Subsidiary, all
outstanding notes will become due and payable without further action or notice.
Holders of the notes may not enforce the Indenture or the notes except as
provided in the Indenture. Subject to certain limitations, holders of a majority
in principal amount of outstanding notes may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from holders of the notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.

The holders of a majority in aggregate principal amount of each class of
notes then outstanding by notice to the Trustee may on behalf of the holders of
all of the applicable class of notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the notes.

NTL is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and NTL is required, upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS

No director, officer, employee, incorporator or shareholder of NTL, as
such, shall have any liability for any Obligations of NTL under the notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each holder of the notes by accepting a note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. Such waiver may not be effective to
waive liabilities under the federal securities laws, and it is the view of the
SEC that a waiver of such liabilities is against public policy.

DEFEASANCE AND DISCHARGE OF THE INDENTURE AND THE NOTES

NTL may cause the defeasance of the notes if NTL irrevocably deposits, or
causes to be deposited, in trust with the Trustee or the paying agent, at any
time prior to the stated maturity of the notes or the date of redemption of all
the outstanding notes, as trust funds in trust, legal tender in the countries
constituting the European Monetary Union, or EEA Government Obligations in an
amount sufficient, in the opinion of a nationally recognized firm of independent
public accountants, without reinvestment thereof, to pay timely and discharge
the

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entire principal of the then outstanding notes of such class and all interest
due thereon to maturity or redemption. The Indenture will then cease to be of
further effect as to all outstanding notes except, among other things, as to:

(1) remaining rights of registration of transfer and substitution and
exchange of the notes of such class;

(2) rights of holders to receive payment of principal of and interest
on the notes; and

(3) the rights, obligations and immunities of the Trustee.

In order to exercise Defeasance:

(1) NTL shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that:

(a) NTL has received from, or there has been published by, the
Internal Revenue Service, a ruling; or

(b) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon, such Opinion of Counsel shall confirm
that the holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result
of such Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as
would have been the case if such Defeasance had not occurred;

(2) no Event of Default shall have occurred and be continuing on the
date of such deposit (other than an Event of Default resulting from
the borrowing of funds to be applied to such deposit) or insofar as
Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after
the date of deposit;

(3) such Defeasance shall not result in a breach or violation of, or
constitute a default under, any material agreement or instrument
(other than the Indenture) to which NTL or any of its Subsidiaries
is a party or by which NTL or any of its Subsidiaries is bound;

(4) NTL shall have delivered to the Trustee an Opinion of Counsel to
the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;

(5) NTL shall have delivered to the Trustee an Officers' Certificate
stating that the deposit was not made by NTL with the intent of
preferring the holders of notes over the other creditors of NTL
with the intent of defeating, hindering, delaying or defrauding
creditors of NTL or others;

(6) the deposit shall not result in NTL, the Trustee or the trust being
subject to the Investment Company Act of 1940;

(7) holders of the notes will have a valid, perfected and unavoidable
(under applicable bankruptcy or insolvency laws), subject to the
passage of time referred to in clause (4) above, first priority
security interest in the trust funds; and

(8) NTL shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions
precedent relating to the Defeasance have been complied with.

UNCLAIMED MONEY, PRESCRIPTION

If money deposited with the Trustee or paying agent for the payment of
principal or interest remains unclaimed for two years, the Trustee and the
paying agent shall pay the money back to NTL at its written request. After that,
holders of notes entitled to the money must look to NTL for payment unless an
abandoned property law designates another person and all liability of the
Trustee and such paying agent shall cease. Other than as set forth in this
paragraph, the Indenture does not provide for any prescription period for the
payment of interest and principal on the notes.

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TRANSFER AND EXCHANGE

A holder may transfer or exchange interests in the notes in accordance with
procedures described in "Book-Entry; Delivery and Form." The registrar and the
Trustee may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and NTL may require a holder to pay any
taxes and fees required by law or permitted by the Indenture. The Company is not
required to transfer or exchange any note selected for redemption. Also, NTL is
not required to transfer or exchange any note for a period of 15 days before a
selection of notes to be redeemed. All transfers or exchanges of certificated
notes may be effected at the offices of the transfer agent in Luxembourg.

The registered holder of a note will be treated as the owner of it for all
purposes.

AMENDMENT, SUPPLEMENT AND WAIVER

Except as provided in the next succeeding paragraph, the Indenture or notes
may be amended or supplemented with the consent of the holders of at least a
majority in principal amount of the then outstanding notes (including consents
obtained in connection with a tender offer or exchange offer for such notes),
and any existing default or compliance with any provision of the Indenture or
the notes may be waived with the consent of the holders of a majority in
principal amount of the then outstanding notes, including consents obtained in
connection with a tender offer or exchange offer for such notes.

Without the consent of each holder affected, an amendment or waiver may
not, with respect to any notes held by a non-consenting holder of notes:

(1) reduce the amount of notes whose holders must consent to an
amendment, supplement or waiver;

(2) reduce the principal of or change the fixed maturity of any note or
alter the provisions with respect to the redemption of the notes
except for repurchases of the notes pursuant to the covenants
described above under the captions "-- Asset Sale" and "-- Change
of Control";

(3) reduce the rate of or change the time for payment of interest on
any note;

(4) waive a default in the payment of principal of or interest on any
notes, except a rescission of acceleration of the notes by the
holders of at least a majority in aggregate principal amount of the
notes and a waiver of the payment default that resulted from such
acceleration;

(5) make any note payable in money other than that stated in the notes;

(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of holders of notes to
receive payments of principal of or interest on the notes;

(7) waive a redemption payment with respect to any note; or

(8) make any change in the foregoing amendment and waiver provisions.

Notwithstanding the foregoing, without the consent of any holder of notes,
NTL and the Trustee may amend or supplement the Indenture or the notes to cure
any ambiguity, defect or inconsistency, to provide for uncertificated notes in
addition to or in place of certificated notes, to provide for the assumption of
NTL's obligations to holders of the notes in the case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the holders of the notes or that does not adversely affect the legal
rights under the Indenture of any such holder, or to comply with requirements of
the SEC in order to maintain the qualification of the Indenture under the Trust
Indenture Act.

Any notice or communication to a holder of notes shall be mailed by
first-class mail to such holder's address as shown in the register kept by the
registrar. If a notice or communication is mailed in the manner provided in the
preceding sentence within the time period prescribed, it is duly given, whether
or not the addressee receives it. If the notes are listed on the Luxembourg
Stock Exchange, NTL will publish a notice in a daily newspaper with general
circulation in Luxembourg.

GOVERNING LAW AND JUDGMENTS

The notes and the Indenture will be governed exclusively by the laws of the
State of New York. Under the Judiciary Law of the State of New York, a judgment
or decree in an action based upon an obligation denominated
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in a currency other than U.S. dollars will be rendered in the foreign currency
of the underlying obligation and converted into U.S. dollars at a rate of
exchange prevailing on the date of entry of the judgment or decree.

CONCERNING THE TRUSTEE

The Indenture contains limitations on the rights of the Trustee, should it
become a creditor of NTL, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.

The Indenture will provide that the holders of a majority in principal
amount of then outstanding notes will have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy available to
the Trustee under the Indenture, subject to certain exceptions. The Indenture
provides that in case an Event of Default shall occur (which shall not be
cured), the Trustee will be required, in the exercise of its power, to use the
degree of care of a prudent man in the conduct of his own affairs. The Indenture
will provide that subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any holder of notes, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.

The Chase Manhattan Bank is also the trustee for all of the Existing Notes
and the Convertible Notes.

LISTING

Application will be made to list the new notes on the Luxembourg Stock
Exchange. The legal notice relating to the issue of the notes and the articles
of association of NTL will be registered prior to the listing with the Registrar
of the District Court in Luxembourg, where such documents are available for
inspection and where copies thereof can be obtained upon request. In addition,
if and as long as the notes are listed on the Luxembourg Stock Exchange, an
agent for making payments on, and transfers of, notes will be maintained in
Luxembourg. NTL has initially designated Chase Manhattan Bank Luxembourg S.A. as
its agent for such purposes.

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BOOK-ENTRY, DELIVERY AND FORM

FORM OF NOTES

All certificates representing the notes will be issued in fully registered
form without interest coupons. The notes sold in offshore transactions in
reliance on Regulation S under the Securities Act are represented by one or more
global notes in definitive, fully registered form, without interest coupons
(each a "Regulation S Global Note"), deposited with the applicable trustee, as
common depositary for, and registered in the name of a nominee of, Euroclear or
Clearstream.

Notes sold in reliance on Rule 144A are represented by either (1) one or
more permanent global notes in definitive, fully registered form without
interest coupons (each a "Euroclear Restricted Global Note") and were deposited
with the applicable trustee as depositary for, and registered in the name of a
nominee of, Euroclear or Clearstream or (2) one or more permanent global notes
in definitive, fully registered form without interest coupons (each a "DTC
Restricted Global Note") and were deposited with the applicable trustee as
custodian for, and registered in the name of a nominee of DTC.

Notes issued in exchange (1) for the Regulation S Global Notes will be
represented by one or more permanent global notes in definitive, fully
registered form without interest coupons and deposited with the applicable
trustee as common depositary for, and registered in the name of, Euroclear and
Clearstream, (2) for the Euroclear Restricted Global Notes, will be represented
by one or more permanent global notes in definitive fully registered form
without interest coupons and deposited with the applicable trustee as depositary
for, and registered in the name of a nominee of Euroclear, and (3) for the DTC
Restricted Global Notes, will be represented by one or more permanent global
notes in fully registered form without interest coupons and deposited with the
applicable trustee custodian for, and registered in the name of a nominee of
DTC. Each of the global notes so issued in exchange are referred to as Global
Notes.

Ownership of beneficial interests in a Global Note is limited to persons
who have accounts with DTC or Euroclear and Clearstream ("participants"), or
persons who hold interests through participants. Ownership of beneficial
interests in a Global Note is shown on, and the transfer of that ownership is
effected only through, records maintained by DTC, Euroclear or Clearstream, as
applicable, or their respective nominees (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants). Qualified institutional buyers may hold their
interests in a Restricted Global Note, directly through DTC, if they are
participants in such system, or indirectly through organizations which are
participants in such system.

Note holders may hold their interests in a Regulation S Global Note,
directly through Euroclear or Clearstream, if they are participants in such
systems, or indirectly through organizations that are participants in such
systems.

So long as DTC, Euroclear or Clearstream, as applicable, or any nominee, is
the registered owner or holder of a Global Note, DTC, Euroclear or Clearstream,
or such nominee, as the case may be, will be considered the sole owner or holder
of the notes represented by such Global Note for all purposes under the
indentures pursuant to which the notes were issued. No beneficial owner of an
interest in a Global Note is permitted to transfer that interest except in
accordance with DTC's, Euroclear's or Clearstream's applicable procedures, in
addition to those provided for under the indentures.

PAYMENTS ON GLOBAL NOTES

Payments made with respect to a Global Note are made to DTC, Euroclear or
Clearstream, as applicable, or their nominees, as the registered owner thereof.
Neither NTL, the trustee nor any paying agent has any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

We expect that DTC, Euroclear or Clearstream, as applicable, or their
nominees, upon receipt of any payment in respect of a Global Note, will credit
participants' accounts with payments in amounts proportionate to
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their respective beneficial interests in such Global Note as shown on their
respective records. We also expect that payments by participants to owners of
beneficial interests in such Global Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.

All amounts payable under the notes are payable in Euro, except as may
otherwise be agreed between any applicable securities clearing system and any
holders and except as otherwise provided below. Payments are subject in all
cases to any fiscal or other laws and regulations applicable thereto. None of
NTL, the trustee or any paying agent shall be liable to any holder of a global
note or other person for any commissions, costs, losses or expenses in relation
to or resulting from any currency conversion or rounding effected in connection
therewith.

Qualified institutional buyers who hold beneficial interests in a note,
directly or indirectly, through DTC (a "DTC Global Note") will be paid in U.S.
dollars converted from such payments in Euro by the paying agent unless the
registered holder, on behalf of any such owner of beneficial interests, elects
to receive payments in Euro. All costs of conversion, if any, will be borne by
holders of beneficial interests in the DTC Global Notes, by deduction from such
payments.

An owner of a beneficial interest in a DTC Global Note may receive payment
in Euro by notifying the DTC participant through which its beneficial interest
in the DTC Global Note is held on or prior to the record date of (1) such
investor's election to receive payment in Euro and (2) wire transfer
instructions to an account entitled to receive the relevant payment. If complete
instructions are received by the DTC participant and forwarded by the DTC
participant to DTC and by DTC to the paying agent, each in a timely manner, such
investor will receive payment in Euro outside DTC; otherwise only U.S. dollar
payments will be made by the paying agent. All costs of such payment by wire
transfer will be borne by registered holders receiving such payments by
deduction from such payments.

Holders may be subject to foreign exchange risks that may have important
economic and tax consequences to them.

The Global Notes may be transferred only to a successor to the relevant
depositary.

ACTION BY OWNERS OF BOOK-ENTRY INTERESTS

DTC, Euroclear and Clearstream have advised NTL that they will take any
action permitted to be taken by a holder of notes (including the tender of notes
for repurchase as described above) only at the direction of one or more
participants to whose account the Book-Entry Interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of notes as to which such participant or participants has or have given such
direction. The relevant depositary will not exercise any discretion in the
granting of consents, waivers or the taking of any other action in respect of
the Global Notes. However, if there is an Event of Default under the notes, each
depositary reserves the right to exchange the Global Notes for notes in
definitive registered form ("definitive registered notes") in certificated form,
and to distribute such notes to its participants.

INFORMATION CONCERNING DTC, EUROCLEAR AND CLEARSTREAM

NTL understands as follows with respect to DTC, Euroclear and Clearstream:

DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities of its participants and to facilitate the
clearance and settlement of transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC participants include securities brokers and dealers (including
the Initial Purchasers), banks, trust companies, clearing corporations and
certain other organizations, some of whom (and/or their representatives) own
DTC. Access to the DTC book-entry system is also available to others,

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such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly.

Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants and certain banks, the ability of an owner of a
book-entry interest to pledge such interest to persons of entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be limited by the lack of a definitive certificate for such
interest. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability to transfer
book-entry interests to such persons may be limited. In addition, beneficial
owners of Book-Entry Interests through the DTC system will receive distributions
attributable to the DTC Global Notes only through DTC participants.

Euroclear and Clearstream each hold securities for their customers and
facilitate the clearance and settlement of securities transactions by electronic
book-entry transfer between their respective account holders. Euroclear and
Clearstream provide various services including safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Euroclear and Clearstream also deal with domestic
securities markets in several countries through established depositary and
custodial relationships. Euroclear and Clearstream have established an
electronic bridge between their two systems across which their respective
participants may settle trades with each other.

Euroclear and Clearstream customers are world-wide financial institutions
including underwriters, securities brokers and dealers, banks trust companies
and clearing corporations. Indirect access to Euroclear and Clearstream is
available to other institutions that clear through or maintain a custodian
relationship with an account holder of either system.

GLOBAL CLEARANCE AND SETTLEMENT UNDER THE BOOK-ENTRY SYSTEM

Transfers between participants in DTC are effected in accordance with DTC's
procedures, and are settled in same-day funds. Transfers between participants in
Euroclear and Clearstream are effected in the ordinary way in accordance with
their respective rules and operating procedures. Transactions settled through
DTC, Euroclear and Clearstream are settled on a T+3 basis.

Subject to compliance with the transfer restrictions applicable to the
Global Notes, cross-market transfers between the participants in DTC, on the one
hand, and Euroclear or Clearstream participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of each of
Euroclear or Clearstream by its common depositary; however, such cross-market
transactions will require delivery of instructions to Euroclear or Clearstream
by the counterparty in such system in accordance with the rules and procedures
and within the established deadlines (Brussels time) of such system. Euroclear
or Clearstream will, if the transaction meets its settlement requirements,
deliver instructions to its common depositary to take action to effect final
settlement on its behalf by delivering or receiving interests in the Global
Notes in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Euroclear
participants and Clearstream participants may not deliver instructions directly
to the common depositary for Euroclear or Clearstream.

Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a Global Note from a
participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. Cash received in
Euroclear and Clearstream as a result of sales of interest in a Global Note by
or through a Euroclear or Clearstream participant to a participant in DTC will
be received with value on the settlement date of DTC but will be available in
the relevant Euroclear or Clearstream cash account only as of the business day
for Euroclear or Clearstream following DTC's settlement date.

Although DTC, Euroclear and Clearstream are expected to follow the
foregoing procedures in order to facilitate transfers of interests in the Global
Notes among participants of DTC, Euroclear or Clearstream, as the case may be,
they are under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time. None of NTL, the Trustee or
the paying agent will have any

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responsibility for the performance by DTC, Euroclear or Clearstream or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.

DEFINITIVE REGISTERED NOTES

Under the terms of the Indenture, owners of book-entry interests in the
Global Notes will receive definitive registered notes if:

(1) DTC notifies NTL that it is unwilling or unable to continue to act as
depositary, or Euroclear and Clearstream cease to be a clearing agency
for the Global Notes and, in either case, a successor depositary or
clearing agency is not appointed by NTL within 90 days; or

(2) an Event of Default under the Indenture has occurred and is
continuing.

Upon the occurrence of an event described in clauses (1)-(2) of the
preceding paragraph, the registrar will issue definitive registered notes,
registered in the name or names and issued in any approved denominations,
requested by or on behalf of DTC or Euroclear and Clearstream, as applicable (in
accordance with their respective customary procedures and based upon directions
received from participants reflecting the beneficial ownership of book-entry
interests).

If definitive registered notes are issued and such notes are then listed on
the Luxembourg Stock Exchange, transfers of such notes will have to be cleared
through a clearing system or a method approved by the rules and regulations of
the Luxembourg Stock Exchange in order to continue to be listed on the
Luxembourg Stock Exchange.

To the extent permitted by law, NTL, the Trustee, the paying agent and the
registrar shall be entitled to treat the Holder of any note as the absolute
owner thereof.

NTL will not impose any fees or other charges in respect of the notes;
however, holders of the book-entry interests may incur fees normally payable in
respect of the maintenance and operation of accounts in DTC, Euroclear and
Clearstream.

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DEFINITIONS

Set forth below are selected defined terms used in the Indenture. Reference
is made to the Indenture for a full definition of all terms, as well as any
other capitalized terms used in the descriptions of the notes for which no
definition is provided.

"12 3/4% notes" means 12 3/4% Senior Deferred Coupon Notes due April 15,
2005, principal amount at maturity of $277.8 million, interest payable
semiannually beginning on October 15, 2000, redeemable at our option on or after
April 15, 2000;

"1996 11 1/2% deferred coupon notes" means 11 1/2% Senior Deferred Coupon
Notes due February 1, 2006, principal amount at maturity of $1,050.0 million,
interest payable semiannually beginning on August 1, 2001, redeemable at our
option on or after February 1, 2001;

"10% notes" means 10% Senior Notes due February 15, 2007, principal amount
at maturity of $400.0 million, interest payable semiannually from August 15,
1997, redeemable at our option on or after February 15, 2002;

"9 1/2% notes" means 9 1/2% Senior Sterling Notes due April 1, 2008,
principal amount at maturity of L125.0 million ($184.8 million), interest
payable semiannually from October 1, 1998, redeemable at our option on or after
April 1, 2003;

"10 3/4 notes" means 10 3/4% Senior Deferred Coupon Sterling Notes due April
1, 2008, principal amount at maturity of L300.0 million ($443.6 million),
interest payable semiannually beginning on October 1, 2003, redeemable at our
option on or after April 1, 2003;

"1998 9 3/4% notes" means 9 3/4% Senior Deferred Coupon Notes due April 1,
2008, principal amount at maturity of $1,300.0 million, interest payable
semiannually beginning on October 1, 2003, redeemable at our option on or after
April 1, 2003;

"1999 9 3/4% notes" means 9 3/4% Senior Deferred Coupon Sterling Notes due
April 15, 2009, principal amount at maturity of L330.0 million ($488.0 million),
interest payable semiannually beginning on October 15, 2004, redeemable at our
option on or after April 15, 2004;

"11 1/2% notes" means 11 1/2% Senior Notes due October 1, 2008, principal
amount at maturity of $625.0 million, interest payable semiannually from April
1, 1999, redeemable at our option on or after October 1, 2003;

"12 3/8% notes" means 12 3/8% Senior Deferred Coupon Notes due October 1,
2008, principal amount at maturity of $450.0 million, interest payable
semiannually beginning on April 1, 2004, redeemable at our option on or after
October 1, 2003;

"9 1/4 notes" means 9 1/4% Senior Euro Notes due November 15, 2006,
principal amount at maturity of E250.0 million ($220.9 million), interest
payable semiannually from May 15, 2000;

"9 7/8% notes" means 9 7/8% Senior Euro Notes due November 15, 2009,
principal amount at maturity of E350.0 million ($309.3 million), interest
payable semiannually from May 15, 2000, redeemable at our option on or after
November 15, 2004;

"1999 11 1/2% deferred coupon notes" means 11 1/2% Senior Deferred Coupon
Euro Notes due November 15, 2009, principal amount at maturity of E210.0 million
($185.6 million), interest payable semiannually beginning on May 15, 2005,
redeemable at our option on or after November 15, 2004;

"11 7/8% notes" means 11 7/8% Senior Notes Due October 1, 2010, principal
amount at maturity of $500.0 million, interest payable semiannually beginning on
April 1, 2001, redeemable at our option on or after October 1, 2005.

"Acquired Debt" means, with respect to any specified Person, Indebtedness
of any other Person (the "Acquired Person") existing at the time such Acquired
Person merged with or into or became a Subsidiary of

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such specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such Acquired Person merging with or into or becoming a
Subsidiary of such specified Person.

"Acquired Person" has the meaning specified in the definition of Acquired
Debt.

"Adjusted Total Assets" means the total amount of assets of NTL and its
Restricted Subsidiaries, including the amount of any Investment in any
Non-Restricted Subsidiary, except to the extent resulting from write-ups of
assets, other than write-ups in connection with accounting for acquisitions in
conformity with GAAP, after deducting therefrom

(1) all current liabilities of NTL and its Restricted Subsidiaries, and

(2) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as calculated
in conformity with GAAP.

For purposes of this Adjusted Total Assets definition,

(a) assets shall be calculated less applicable accumulated
depreciation, accumulated amortization and other valuation
reserves, and

(b) all calculations shall exclude all intercompany items.

"Adjusted Total Controlled Assets" means the total amount of assets of NTL
and its Cable Controlled Subsidiaries, except to the extent resulting from
write-ups of assets, other than write-ups in connection with accounting for
acquisitions in conformity with GAAP, after deducting therefrom

(1) all current liabilities of NTL and such Cable Controlled
Subsidiaries; and

(2) all goodwill, trade names, trademarks, patients, unamortized debt
discount and expense and other like intangibles of NTL and such
Restricted Subsidiaries, all as calculated in conformity with GAAP;

provided that Adjusted Total Controlled Assets shall be reduced (to the extent
not otherwise reduced in accordance with GAAP) by an amount equal to the
aggregate amount of all Investments of NTL or any such Cable Controlled
Subsidiaries in any Person other than a Cable Controlled Subsidiary, except Cash
Equivalents. For purposes of this Adjusted Total Controlled Assets definition,

(a) assets shall be calculated less applicable accumulated
depreciation, accumulated amortization and other valuation
reserves, and

(b) all calculations shall exclude all intercompany items.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control",
including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with", as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.

"Annualized Pro Forma EBITDA" means, with respect to any Person, such
Person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four.

"Asset Sale" means

(1) any sale, lease, transfer, conveyance or other disposition of any
assets, including by way of a sale-and-leaseback, other than the
sale or transfer of inventory or goods held for sale in the
ordinary course of business, provided that the sale, lease,
transfer, conveyance or other disposition of all or substantially
all of the assets of NTL shall be governed by the provisions of the
Indenture described under the captions "Change of Control" or
"Merger, Consolidation or Sale of Assets", or

(2) any issuance, sale, lease, transfer, conveyance or other
disposition of any Equity Interests of any of the NTL's Restricted
Subsidiaries to any Person;

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in either case other than

(a) to

(A) NTL,

(B) any Wholly Owned Subsidiary, or

(C) any Subsidiary which is a Subsidiary of NTL on the Issuance
Date provided that at the time of and after giving effect to
such issuance, sale, lease, transfer, conveyance or other
disposition to such Subsidiary, NTL's ownership percentage
in such Subsidiary is equal to or greater than such
percentage on the Issuance Date, or

(b) the issuance, sale, transfer, conveyance or other disposition of
Equity Interests of a Subsidiary in exchange for capital
contributions made on a pro rata basis by the holders of the
Equity Interests of such Subsidiary.

"Cable Assets" means tangible or intangible assets, licenses, including,
without limitation, Licenses, and computer software used in connection with a
Cable Business.

"Cable Business" means

(i) any Person directly or indirectly operating, or owning a license
to operate, a cable and/or television and/or telephone and/or
telecommunications system or service principally within the United
Kingdom and/or the Republic of Ireland, and

(ii) any Cable Related Business.

"Cable Controlled Property" means a Cable Controlled Subsidiary or a Cable
Asset held by a Cable Controlled Subsidiary.

"Cable Controlled Subsidiary" means any Restricted Subsidiary which is
primarily engaged, directly or indirectly, in one or more Cable Businesses.

"Cable Related Business" means a Person which directly or indirectly owns
or provides a service or product used in a Cable Business, including, without
limitation, any television programming, production and/or licensing business or
any programming guide or telephone directory business or content or software
related thereto.

"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents, however designated, of corporate stock, including, without
limitation, partnership interests.

"Capital Stock Sale Proceeds" means the aggregate net sale proceeds,
including from the sale of any property received for the Capital Stock or the
fair market value of such property, as determined by an independent appraisal
firm, received by NTL or any Subsidiary of NTL from the issue or sale, other
than to a Subsidiary, by NTL of any class of its Capital Stock after October 14,
1993, including Capital Stock of NTL issued after October 14, 1993 upon
conversion of or in exchange for other securities of NTL.

"Cash Equivalents" means

(1) Permitted Currency,

(2) securities issued or directly and fully guaranteed or insured by
the U.S. government, a European Union member government or any
agency or instrumentality thereof having maturities of not more
than six months and two days from the date of acquisition,

(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any commercial bank(s)
domiciled in the United States, the United Kingdom, the Republic of
Ireland or any other European Union member having capital and
surplus in excess of $500.0 million,

(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3)
entered into with any financial institution meeting the
qualifications specified in clause (3) above,

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(5) commercial paper rated P-1 or the equivalent thereof by Moody's or
A-1 or the equivalent thereof by S&P and in each case maturing
within six months and two days after the date of acquisition and

(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1)-(5) of this
definition.

"Change of Control" means

(1) the sale, lease or transfer of all or substantially all of the
assets of NTL to any "Person" or "group", within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting
for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act,
other than any Permitted Holder,

(2) the approval by the requisite stockholders of NTL of a plan of
liquidation or dissolution of NTL,

(3) any "Person" or "group", within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, other than any Permitted
Holder, becomes the "beneficial owner", as defined in Rule 13d-3
under the Exchange Act, of more than 50% of the total voting power
of all classes of the voting stock of NTL and/or warrants or
options to acquire such voting stock, calculated on a fully diluted
basis, unless, as a result of such transaction, the ultimate direct
or indirect ownership of NTL is substantially the same immediately
after such transaction as it was immediately prior to such
transaction, or

(4) during any period of two consecutive years, individuals who at the
beginning of such period constituted NTL's Board of Directors,
together with any new directors whose election or appointment by
such board or whose nomination for election by the shareholders of
NTL was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of NTL's
Board of Directors then in office.

"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Ratings Decline.

"Consolidated Interest Expense" means, for any Person, for any period, the
amount of interest in respect of Indebtedness, including amortization of
original issue discount, amortization of debt issuance costs, and non-cash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness, the amount of Redeemable Dividends, Restricted Subsidiary
Preferred Stock Dividends and the interest component of rentals in respect of
any capital lease obligation paid, in each case whether accrued or scheduled to
be paid or accrued by such Person and its Subsidiaries, other than Non-
Restricted Subsidiaries, during such period to the extent such amounts were
deducted in computing Consolidated Net Income, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
capital lease obligation shall be deemed to accrue at an interest rate
reasonably determined by such Person to be the rate of interest implicit in such
capital lease obligation in accordance with GAAP consistently applied.

"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries, other than
Non-Restricted Subsidiaries, for such period, on a consolidated basis,
determined in accordance with GAAP; provided, that

(1) the Net Income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid
to the referent Person or a Wholly Owned Subsidiary,

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(2) the Net Income of any Person that is a Subsidiary, other than a
Subsidiary of which at least 80% of the Capital Stock having
ordinary voting power for the election of directors or other
governing body of such Subsidiary is owned by the referent Person
directly or indirectly through one or more Subsidiaries, shall be
included only to the extent of the amount of dividends or
distributions paid to the referent Person or a Wholly Owned
Subsidiary,

(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded, and

(4) the cumulative effect of a change in accounting principles shall be
excluded.

"Convertible Subordinated Notes" means NTL's 7% Convertible Subordinated
Notes due 2008 issued pursuant to an indenture dated as of December 16, 1998
between NTL and The Chase Manhattan Bank, as trustee, as supplemented by a first
supplemental indenture dated as of March 31, 1999 between NTL, NTL Incorporated
and The Chase Manhattan Bank, as further supplemented by a second supplemental
indenture dated as of March 16, 2000 between NTL, NTL Incorporated and The Chase
Manhattan Bank and as further supplemented by a third supplemental indenture
dated as of May 17, 2000 between NTL, NTL Incorporated and NTL Holdings
Incorporated.

"Credit Facility" means the Facilities Agreement dated October 17, 1997
between NTL (UK) Group Inc., as principal guarantor, Chase Manhattan plc, as
arranger, Chase Manhattan International Limited, as agent and security trustee
and The Chase Manhattan Bank as issuer, as such Facilities Agreement may be
supplemented, amended, restated, modified, renewed, refunded, replaced or
refinanced, in whole or in part, from time to time in an aggregate outstanding
principal amount not to exceed the greater of

(1) L555.0 million and

(2) the amount of the aggregate commitments thereunder as the same may
be increased after March 13, 1998 as contemplated by the Facilities
Agreement as amended or supplemented to March 13, 1998, but in no
event greater than L875.0 million, less, in each case, the
aggregate amount of all Net Proceeds of Asset Sales that have been
applied to permanently reduce Indebtedness under the Credit
Facility pursuant to the covenant described above under "-- Asset
Sale".

Indebtedness that may otherwise be incurred under the indenture may, but need
not, be incurred under the Credit Facility without regard to the limit set forth
in the preceding sentence. Indebtedness outstanding under the Credit Facility on
the date of the indenture shall be deemed to have been incurred on such date in
reliance on the exception provided by clause (a) of the second paragraph of the
covenant described above under "-- Incurrence of Indebtedness and Issuance of
Preferred Stock".

"Cumulative EBITDA" means the cumulative EBITDA of NTL from and after the
Issuance Date to the end of the fiscal quarter immediately preceding the date of
a proposed Restricted Payment, or, if such cumulative EBITDA for such period is
negative, minus the amount by which such cumulative EBITDA is less than zero;
provided, however, that EBITDA of Non-Restricted Subsidiaries shall not be
included.

"Cumulative Interest Expense" means the aggregate amount of Consolidated
Interest Expense paid, accrued or scheduled to be paid or accrued by NTL from
the Issuance Date to the end of the fiscal quarter immediately preceding a
proposed Restricted Payment, determined on a consolidated basis in accordance
with GAAP.

"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.

"Diamond Notes" means the 10% Diamond Senior Notes due 2008, the 9 1/8%
Diamond Senior Notes due 2008, the 10 3/4% Diamond Senior Discount Notes due
2007, the 11 3/4% Diamond Senior Discount Notes due 2005 and the 13 1/4% Diamond
Senior Discount Notes due 2004.

"Disqualified Stock" means any Capital Stock which, by its terms, or by the
terms of any security into which it is convertible or for which it is
exchangeable, or upon the happening of any event, matures or is

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mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date on which the notes mature.

"EBITDA" means, for any Person, for any period, an amount equal to

(1) the sum of

(a) Consolidated Net Income for such period, exclusive of any
gain or loss realized in such period upon an Asset Sale, plus

(b) the provision for taxes for such period based on income or
profits to the extent such income or profits were included in
computing Consolidated Net Income and any provision for taxes
utilized in computing net loss under clause (a) hereof, plus

(d) depreciation for such period on a consolidated basis, plus

(e) amortization of intangibles for such period on a consolidated
basis, plus

(f) any other non-cash item reducing Consolidated Net Income for
such period, excluding any such non-cash item to the extent
that it represents an accrual of or reserve for cash expenses
in any future period or amortization of a prepaid cash
expense that was paid in a prior period,

minus

(2) all non-cash items increasing Consolidated Net Income for such
period, all for such Person and its Subsidiaries determined in
accordance with GAAP consistently applied.

"EEA Government Obligation" means direct non-callable obligations of, or
non-callable obligations guaranteed by, any European Union member for the
payment of which obligation or guarantee the full faith and credit of the
respective nation is pledged; provided that such nation has a credit rating at
least equal to that of the highest rated member nation of the European Economic
Area.

"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any Indebtedness that is
convertible into, or exchangeable for, Capital Stock.

"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office as operator of the Euroclear system.

"European Union member" means any country that is or becomes a member of
the European Union or any successor organization thereto.

"Exchange Rate Contract" means, with respect to any Person, any currency
swap agreements, forward exchange rate agreements, foreign currency futures or
options, exchange rate collar agreements, exchange rate insurance and other
agreements or arrangements, or combination thereof, the principal purpose of
which is to provide protection against fluctuations in currency exchange rates.
An Exchange Rate Contract may also include an Interest Rate Agreement.

"Existing Indebtedness" means Indebtedness of NTL and its Subsidiaries in
existence on the Issuance Date, until such amounts are repaid, including,
without limitation, the Existing Notes.

"Existing Notes" means the Old Notes and the Convertible Subordinated
Notes.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date and are applied on a consistent basis.

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"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.

"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit, or
reimbursement agreements in respect thereof, or representing the balance
deferred and unpaid of the purchase price of any property, including pursuant to
capital leases and sale-and-leaseback transactions, or representing any hedging
obligations under an Exchange Rate Contract or an Interest Rate Agreement,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness, other than obligations
under an Exchange Rate Contract or an Interest Rate Agreement, would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
and also includes, to the extent not otherwise included, the Guarantee of items
which would be included within this definition. The amount of any Indebtedness
outstanding as of any date shall be the accreted value thereof, in the case of
any Indebtedness issued with original issue discount.

"Interest Rate Agreement" means, with respect to any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement the principal purpose of which is to protect the
party indicated therein against fluctuations in interest rates.

"Investment Grade" means BBB- or higher by S&P or Baa3 or higher by Moody's
or the equivalent of such ratings by S&P or Moody's. In the event that NTL shall
be permitted to select any other Rating Agency, the equivalent of such ratings
by such Rating Agency shall be used.

"Investments" means, with respect to any Person, all investments by such
Person in other Persons, including Affiliates, in the forms of loans, including
Guarantees, advances or capital contributions, excluding commission, travel and
similar advances and loans, joint property ownership and other arrangements, in
each case, made to officers and employees made in the ordinary course of
business, purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.

"Issuance Date" means the date on which the notes are first authenticated
and issued.

"License" means any license issued or awarded pursuant to the Broadcasting
Act 1990, the Cable and Broadcasting Act 1984, the Telecommunications Act 1984
or the Wireless Telegraphy Act 1948, in each case, as such Acts may, from time
to time be, amended, modified or re-enacted, or equivalent statutes of any
jurisdiction, to operate or own a Cable Business.

"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code, or equivalent or successor statutes, of any
jurisdiction.

"Material License" means a License held by NTL or any of its Subsidiaries
which License at the time of determination covers a number of Net Households
which equals or exceeds 5% of the aggregate number of Net Households covered by
all of the Licenses held by NTL and its Subsidiaries at such time.

"Material Subsidiary" means

(1) NTL UK Group, Inc., formerly known as OCOM Sub II, Inc., NTLIH, NTL
Group Limited, CableTel Surrey Limited, CableTel Cardiff Limited,
CableTel Glasgow, CableTel Newport and CableTel Kirklees and

(2) any other Subsidiary of NTL which is a "significant subsidiary" as
defined in Rule 1-02(v) of Regulation S-X under the Securities Act
and the Exchange Act, as such Regulation is in effect on the date
of the indenture.

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"Monetize" means a strategy with respect to Equity Interests that generates
an amount of cash equal to the fair value of such Equity Interests.

"Moody's" means Moody's Investors Service, Inc. and its successors.

"Net Households" means the product of

(1) the number of households covered by a License in the United Kingdom
and

(2) the percentage of the entity holding such License which is owned
directly or indirectly by NTL.

"Net Income" means, with respect to any Person for a specific period, the
net income (loss) of such Person during such period, determined in accordance
with GAAP, excluding, however, any gain, but not loss, during such period,
together with any related provision for taxes on such gain, but not loss,
realized during such period in connection with any Asset Sale, including,
without limitation, dispositions pursuant to sale-and-leaseback transactions,
and excluding any extraordinary gain, but not loss, during such period, together
with any related provision for taxes on such extraordinary gain, but not loss.

"Net Proceeds" means the aggregate cash proceeds received by NTL or any of
its Subsidiaries in respect of any Asset Sale, net of the direct costs relating
to such Asset Sale, including, without limitation, legal, accounting and
investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets.

"Non-Controlled Subsidiary" means an entity which is not a Cable Controlled
Subsidiary.

"Non-Recourse Debt" means Indebtedness or that portion of Indebtedness as
to which none of NTL, nor any Restricted Subsidiary:

(1) provides credit support, including any undertaking, agreement or
instrument which would constitute Indebtedness;

(2) is directly or indirectly liable; or

(3) constitutes the lender.

"Non-Restricted Subsidiary" means

(1) a Subsidiary that

(a) at the time of its designation by the Board of Directors as a
Non-Restricted Subsidiary has not acquired any assets, other
than as specifically permitted by clause (5) of "Permitted
investments" or by the "Restricted Payments" covenant, at any
previous time, directly or indirectly from the Company or any of
its Restricted Subsidiaries,

(b) has no Indebtedness other than Non-Recourse Debt and

(c) that at the time of such designation, after giving pro forma
effect to such designation, the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL is equal to or less than the
ratio of Indebtedness to Annualized Pro Forma EBITDA of NTL
immediately preceding such designation, provided, however, that
if the ratio of Indebtedness to Annualized Pro Forma EBITDA of
NTL immediately preceding such designation is 6:1 or less, then
the ratio of Indebtedness to Annualized Pro Forma EBITDA of NTL
may be 0.5 greater than such ratio immediately preceding such
designation;

(2) any Subsidiary which

(a) has been acquired or capitalized out of or by Equity Interests
of NTL or Capital Stock Sales Proceeds therefrom,

(b) has no Indebtedness other than Non-Recourse Debt and

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(c) is designated as a Non-Restricted Subsidiary by the Board of
Directors or is merged, amalgamated or consolidated with or
into, or its assets or capital stock is to be transferred to, a
Non-Restricted Subsidiary; or

(3) any Subsidiary of a Non-Restricted Subsidiary.

"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"Old Notes" means the 12 3/8% notes, the 11 1/2% notes, the 12 3/4% notes,
the 1996 11 1/2% deferred coupon notes, the 10 3/4% notes, the 10% notes, the
1998 9 3/4% notes, the 1999 9 3/4 notes, the 9 1/2% notes, the 9 1/4% notes, the
9 7/8% notes, the 1999 11 1/2% deferred coupon notes and the 11 7/8% notes.

"Other Qualified Notes" means any outstanding senior indebtedness of NTL
issued pursuant to an indenture having a provision substantially similar to the
Asset Sale Offer provision contained in the Indenture, including, without
limitation, the old notes and the new notes, the Old Notes and the Diamond
Notes.

"Permitted Acquired Debt" means, with respect to any Acquired Person,
including, for this purpose, any Non-Restricted Subsidiary at the time such
Non-Restricted Subsidiary becomes a Restricted Subsidiary, Acquired Debt of such
Acquired Person and its Subsidiaries in an amount, determined on a consolidated
basis, not exceeding the sum of

(1) amount of the gross book value of property, plant and equipment of
the Acquired Person and its Subsidiaries as set forth on the most
recent consolidated balance sheet of the Acquired Person, which may
be unaudited, prior to the date it becomes an Acquired Person and

(2) the aggregate amount of any Cash Equivalents held by such Acquired
Person at the time it becomes an Acquired Person.

"Permitted Currency" means the lawful currency of the United States or a
European Union member.

"Permitted Designee" means

(1) a spouse or a child of a Permitted Holder,

(2) trusts for the benefit of a Permitted Holder or a spouse or child
of a Permitted Holder,

(3) in the event of the death or incompetence of a Permitted Holder,
his estate, heirs, executor, administrator, committee or other
personal representative or

(4) any Person so long as a Permitted Holder owns at least 50% of the
voting power of all classes of the voting stock of such Person.

"Permitted Holders" means George S. Blumenthal, J. Barclay Knapp and their
Permitted Designees.

"Permitted Investments" means

(1) any Investments in NTL or in a Cable Controlled Property or in a
Qualified Subsidiary, including, without limitation,

(a) Guarantees of Indebtedness of NTL, a Cable Controlled Subsidiary
or a Qualified Subsidiary,

(b) Liens securing such Indebtedness or Guarantees or

(2) any Investments in Cash Equivalents;

(3) Investments by NTL in Indebtedness of a counter-party to an
Exchange Rate Contract for hedging a Permitted Currency exchange
risk that are made, for purposes other than speculation, in
connection with such contract to hedge not more than the aggregate
principal amount of the Indebtedness being hedged, or, in the case
of Indebtedness issued with original issue discount, based on the
amounts payable after the amortization of such discount;

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(4) Investments by NTL or any Subsidiary of NTL in a Person, if as a
result of such Investment

(a) such Person becomes a Cable Controlled Subsidiary or

(b) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or
is liquidated into, NTL or a Wholly Owned Subsidiary of NTL; and

(5) any issuance, transfer or other conveyance of Equity Interests in
NTL, or any Capital Stock Sales Proceeds therefrom, to a Subsidiary
of NTL.

"Permitted Liens" means

(1) Liens in favor of NTL;

(2) Liens on property of a Person existing at the time such Person is
merged into or consolidated with NTL or any Subsidiary of NTL;
provided, that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not secure any
property or assets of NTL or any of its Subsidiaries other than the
property or assets subject to the Liens prior to such merger or
consolidation;

(3) liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or are being contested in good faith and by
appropriate proceedings;

(4) Liens existing on the Issuance Date;

(5) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently
concluded; provided, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have
been made therefor and

(6) easements, rights of way, restrictions and other similar easements,
licenses, restrictions on the use of properties or minor
imperfections of title that, in the aggregate, are not material in
amount, and do not in any case materially detract from the
properties subject thereto or interfere with the ordinary conduct
of the business of NTL or its Restricted Subsidiaries.

"Permitted Non-Controlled Assets" means Equity Interests in any Person
primarily engaged, directly or indirectly, in one or more Cable Businesses if
such Equity Interests

(1) were acquired by NTL or any of its Restricted Subsidiaries in
connection with any Asset Sale or any Investment otherwise
permitted under the terms of the Indenture and

(2) to the extent that, after giving pro forma effect to the
acquisition thereof by NTL or any of its Restricted Subsidiaries,
Adjusted Total Controlled Assets is greater than 80% of Adjusted
Total Assets based on the most recent consolidated balance sheet of
NTL.

"Pro Forma EBITDA" means for any Person, for any period, the EBITDA of such
Person as determined on a consolidated basis for such Person and its
Subsidiaries in accordance with GAAP after giving effect to the following:

(1) if, during or after such period, such Person or any of its
Subsidiaries shall have made any Asset Sale, Pro Forma EBITDA of
such Person and its Subsidiaries for such period shall be reduced
by an amount equal to the Pro Forma EBITDA, if positive, directly
attributable to the assets which are the subject of such Asset Sale
for the period or increased by an amount equal to the Pro Forma
EBITDA, if negative, directly attributable thereto for such period
and

(2) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business
which immediately after such acquisition is a Subsidiary of such
Person or whose assets are held directly by such Person or a
Subsidiary of such Person, Pro Forma EBITDA

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shall be computed so as to give pro forma effect to the acquisition
of such Person or business, without giving effect to clause (3) of
the definition of Consolidated Net Income;

and provided further that, with respect to NTL, all of the foregoing references
to "Subsidiary" or "Subsidiaries" shall be deemed to refer only to a "Restricted
Subsidiary" or "Restricted Subsidiaries" of NTL.

"Qualified Subsidiary" means a Wholly Owned Subsidiary, or an entity that
will become a Wholly Owned Subsidiary after giving effect to the transaction
being considered, that at the time of and after giving effect to the
consummation of the transaction under consideration,

(1) is a Cable Business or holds only Cable Assets,

(2) has no Indebtedness (other than Indebtedness being incurred to
consummate such transaction) and

(3) has no encumbrances or restrictions, other than such encumbrances
or restrictions imposed or permitted by the Indenture, the
indentures governing the Old Notes or any other instrument
governing unsecured indebtedness of NTL which is pari passu with
the notes, on its ability to pay dividends or make any other
distributions to NTL or any of its Subsidiaries.

"Rating Agencies" means

(1) S&P,

(2) Moody's and

(3) if S&P or Moody's or both shall not make a rating of the notes
publicly available, a nationally recognized securities rating
agency or agencies, as the case may be, selected by NTL, which
shall be substituted for S&P or Moody's or both, as the case may
be.

"Rating Category" means

(1) with respect to S&P, any of the following categories: BB, B, CCC,
CC, C and D, or equivalent successor categories,

(2) with respect to Moody's, any of the following categories: Ba, B,
Caa, Ca, C and D, or equivalent successor categories, and

(3) the equivalent of any such category of S&P or Moody's used by
another Rating Agency.

In determining whether the rating of the notes has decreased by one or more
gradations, gradations within Rating Categories + and - for S&P; 1, 2 and 3 for
Moody's; or the equivalent gradations for another Rating Agency shall be taken
into account e.g., with respect to S&P, a decline in a rating from BB to BB-, as
well as from BB- to B+, will constitute a decrease of one gradation.

"Rating Date" means that date which is 90 days prior to the earlier of

(1) a Change of Control and

(2) public notice of the occurrence of a Change of Control or of the
intention by NTL or any Permitted Holder to effect a Change of
Control.

"Ratings Decline" means the occurrence of any of the following events on,
or within six months after, the date of public notice of the occurrence of a
Change of Control or of the intention of NTL or any Person to effect a Change of
Control, which period shall be extended so long as the rating of any of NTL's
debt securities is under publicly announced consideration for possible downgrade
by any of the Rating Agencies:

(1) in the event that any of NTL's debt securities are rated by both of
the Rating Agencies on the Rating Date as Investment Grade, the
rating of such securities by either of the Rating Agencies shall be
below Investment Grade,

(2) in the event that any of NTL's debt securities are rated by either,
but not both, of the Rating Agencies on the Rating Date as
Investment Grade, the rating of such securities by both of the
Rating Agencies shall be below Investment Grade, or
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(3) in the event any of NTL's debt securities are rated below
Investment Grade by both of the Rating Agencies on the Rating Date,
the rating of such securities by either Rating Agency shall be
decreased by one or more gradations, including gradations within
Rating Categories as well as between Rating Categories.

"Redeemable Dividend" means, for any dividend with regard to Disqualified
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate, expressed as a decimal number
between 1 and 0, then applicable to the issuer of such Disqualified Stock.

"Replacement Assets" means

(1) Cable Assets,

(2) Equity Interests of any Person engaged, directly or indirectly,
primarily in a Cable Business, which Person is or will become on
the date of acquisition thereof a Restricted Subsidiary as a result
of NTL's acquiring such Equity Interests,

(3) Permitted Non-Controlled Assets or

(4) any combination of the foregoing.

"Restricted Investment" means an Investment other than a Permitted
Investment.

"Restricted Subsidiary" means any Subsidiary of NTL which is not a
Non-Restricted Subsidiary.

"Restricted Subsidiary Preferred Stock Dividend" means, for any dividend
with regard to preferred stock of a Restricted Subsidiary, the quotient of the
dividend divided by the difference between one and the maximum statutory federal
income tax rate, expressed as a decimal number between 1 and 0, then applicable
to the issuer of such preferred stock.

"S&P" means Standard & Poor's Ratings Group and its successors.

"Subordinated Debentures" means the debentures exchangeable by NTL for the
Preferred Stock in accordance with the Certificate of Designation therefor.

"Subsidiary" means any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled, without regard to the occurrence of any contingency, to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing

(1) the sum of the products obtained by multiplying

(a) the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect thereof, by

(b) the number of years, calculated to the nearest one-twelfth, that
will elapse between such date and the making of such payment, by

(2) the then outstanding principal amount of such Indebtedness.

"Wholly Owned Subsidiary" means, at any time, a Restricted Subsidiary all
of the Capital Stock of which, except directors' qualifying shares, is at the
time owned directly or indirectly by NTL.

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REGISTRATION RIGHTS

The following summary of the registration rights provided in the
registration rights agreements and the notes is not complete. You should refer
to the registration rights agreements and the notes for a full description of
the registration rights that apply to the notes. The registration rights
agreements are filed as exhibits to the registration statement of which this
prospectus forms a part.

Under the registration rights agreements, we agreed to file with the SEC a
registration statement, including a prospectus, on the appropriate form under
the Securities Act with respect to an offer to exchange the old notes for new
notes registered under the Securities Act with terms substantially identical to
those of the old notes. If:

(1) on or prior to the time the exchange offer is completed existing SEC
interpretations are changed such that the debt securities received by
holders other than restricted holders in the exchange offer for
registrable securities are not or would not be, upon receipt,
transferable by each such holder without restriction under the
Securities Act,

(2) the exchange offer has not been completed by September 1, 2001 or

(3) the exchange offer is not available to any holder of the notes,

we will file with the SEC a shelf registration statement to cover resales of the
notes by the holders who satisfy certain conditions relating to the provision of
information in connection with the shelf registration statement. We will use our
best efforts to cause the applicable registration statement to be declared
effective as promptly as practicable by the SEC.

The registration rights agreements provide that:

(a) we will file an exchange registration statement with the SEC by May
24, 2001,

(b) we will use our best efforts to have the exchange registration
statement declared effective by the SEC by July 23, 2001,

(c) unless the exchange offer would not be permitted by applicable law or
SEC policy, we will commence the exchange offer and use our best
efforts to issue on or prior to September 1, 2001, new notes in
exchange for all old notes tendered before that date in the exchange
offer and

(d) if obligated to file the shelf registration statement, we will use our
best efforts to file the shelf registration statement with the SEC as
promptly as practicable after such filing obligation arises and to
cause the shelf registration to be declared effective by the SEC
within 180 days after the filing of such shelf registration statement.

If, with respect to the notes:

(1) we fail to file the exchange registration statement or the shelf
registration statement on or before the date specified for such
filing,

(2) the exchange registration statement is not declared effective by July
23, 2001 or the shelf registration statement is not declared effective
within 180 days from the date such shelf registration statement is
filed,

(3) we fail to complete the exchange offer within the specified time frame
or

(4) the exchange registration statement or the shelf registration
statement is filed and declared effective but is thereafter either
withdrawn or becomes subject to an effective stop order suspending the
effectiveness (except as specifically permitted in the registration
rights agreements) without being succeeded immediately by an
additional registration statement which becomes effective,

then we will pay special interest pursuant to provisions of the registration
rights agreements and the notes to each holder of the notes.

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Special interest will accrue from:

(1) the date specified for such filing, in the case of clause (1)
above,

(2) the date specified for effectiveness in the case of clause (2)
above,

(3) the date specified for completion of the exchange offer, in the
case of clause (3) above or

(4) the date such exchange registration statement or shelf
registration statement ceases to be effective, in the case of
clause (4) above (each such period referred to in clauses (1)-(4)
above an "Accrual Period"),

at a rate per annum equal to 0.25% for the first 90 days of the Accrual Period;
0.50% for the second 90 days of the Accrual Period; 0.75% for the third 90 days
of the Accrual Period and 1.0% for the remaining portion of the Accrual Period
of the principal amount of the notes. In the event that any special interest is
required to be paid, a notice which sets forth the special interest rate and
other relevant details will be published in Luxembourg and delivered to the
Luxembourg Stock Exchange.

All accrued special interest will be paid by us on each interest payment
date to the applicable Global Note holder by wire transfer of immediately
available funds or by federal funds check and to holders of certificated
securities by wire transfer to the accounts specified by them in writing or by
mailing checks to their registered addresses if no such accounts have been
specified in writing. Following the cure of all registration defaults, the
accrual of special interest will cease.

Special interest on the notes, if any, will be computed on the basis of a
360-day year comprised of twelve 30-day months.

Holders of notes will be required to make certain representations to us as
described in the registration rights agreements in order to participate in the
exchange offer and will be required to deliver information to be used in
connection with the shelf registration statement and to provide comments on the
shelf registration statement within the time periods set forth in the
registration rights agreements in order to have their notes included in the
shelf registration statement and benefit from the provisions regarding special
interest pursuant to provisions of the notes, as set forth above.

Application will be made to list the new notes on the Luxembourg Stock
Exchange. All notices relating to the exchange offer will be published in
Luxembourg and will be delivered to the Luxembourg Stock Exchange. All
documentation in connection with the exchange offer will be available at and all
actions necessary in connection with the exchange offer will be able to be
carried out through the office of an exchange agent located in Luxembourg. A
prospectus supplement will be prepared and delivered to the Luxembourg Stock
Exchange which will confirm the results of the exchange offer.

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DESCRIPTION OF OTHER INDEBTEDNESS

Each of the following are summaries of NTL's or its subsidiaries' existing
debt instruments. You should refer to the relevant agreements for a full
description of the terms of those debt instruments. See "Where you can find more
information about us." Capitalized terms used and not defined below have the
meanings set forth in such debt instruments.

THE 12 3/4% NOTES

In April 1995, we issued $277,803,500 aggregate principal amount at
maturity of our 12 3/4% senior deferred coupon notes due 2005, the "old 12 3/4%
notes", at a discount to their aggregate principal amount to generate gross
proceeds to us of approximately $150.0 million. The old 12 3/4% notes were
issued and sold in a transaction exempt from the registration requirement of the
Securities Act pursuant to Rule 144A under the Securities Act or in transactions
complying with Regulation S under the Securities Act. On August 18, 1995 we
issued $277,803,500 aggregate principal amount at maturity of the 12 3/4% series
A senior deferred coupon notes due 2005, the "12 3/4% notes", in exchange for
the old 12 3/4% notes pursuant to the indenture relating thereto, the "12 3/4%
notes indenture". The terms of the 12 3/4% notes are identical in all material
respects to the old 12 3/4% notes except for certain transfer restrictions and
registration rights applicable to the old 12 3/4% notes.

The 12 3/4% notes accrete at a rate of 12 3/4% computed on a semiannual
bond equivalent basis to an aggregate principal amount at maturity of
$277,803,500. Cash interest on the 12 3/4% notes began to accrue on April 15,
2000 at the rate of 12 3/4% per annum on the principal amount. Interest on the
12 3/4% notes is payable semiannually on April 15 and October 15 of each year to
holders of record on the immediately preceding April 1, and October 1. The
12 3/4% notes mature on April 15, 2005. The 12 3/4% notes are redeemable, at our
option at any time, in whole or in part, on or after April 15, 2000 at the
redemption prices set forth in the 12 3/4% notes indenture, plus any unpaid
interest, if any, to the date of redemption. The 12 3/4% notes may also be
redeemed at our option in whole but not in part in some circumstances where
additional amounts, as defined in the 12 3/4% notes indenture, are payable under
the 12 3/4% notes. In those circumstances the 12 3/4% notes to be repurchased
must be repurchased at 100% of Accreted Value, or, as the case may be, principal
amount thereof. Upon a Change of Control Triggering Event, as defined in the
12 3/4% notes indenture, holders of the 12 3/4% notes have the right to require
us to repurchase all or any part of the 12 3/4% notes at a repurchase price
equal to 101% of the accreted value thereof plus accrued and unpaid interest, if
any. Subject to various conditions, we are obligated to offer to purchase the
12 3/4% notes and other Qualified Senior Notes, as defined in the 12 3/4% notes
indenture, with the Excess Proceeds of some Asset Sales at a redemption price of
100% of the accreted value or, as the case may be, principal amount thereof plus
accrued and unpaid interest. The 12 3/4% notes indenture contains restrictions
with respect to, among other things, the payment of dividends, the repurchase of
stock and the making of certain other Restricted Payments, the incurrence of
additional Indebtedness, the creation of certain Liens, certain Asset Sales,
transactions with Subsidiaries and other Affiliates and mergers and
consolidations.

The 12 3/4% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all of our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

In January 1996, we obtained the necessary consents of the registered
holders of the 12 3/4% notes to certain proposed amendments to the 12 3/4% notes
indenture. On January 22, 1996, NTL and Chemical Bank, now known as The Chase
Manhattan Bank, as trustee, executed a first supplemental indenture to effect
those amendments. In general, the amendments modified the 12 3/4% notes
indenture by amending the covenant entitled "Limitations on Dividend and Other
Payment Restrictions Affecting Subsidiaries" and other provisions to facilitate
the arrangement of our then proposed credit facilities and other financings and
make certain conforming and other changes to the 12 3/4% notes indenture.

In October 1998, we received the necessary consents of registered holders
of the 12 3/4% notes to amend the 12 3/4% notes indenture so as to allow us to
take certain actions that were previously prohibited under the 12 3/4% notes
indenture, particularly regarding the financing of our business and pending and
future acquisitions, including our acquisition of NTL Bermuda. In addition, the
amendment eliminated some, but not all, of certain differences between the
covenants in the 12 3/4% notes indenture and the existing 10 3/4% notes, 9 3/4%
notes and

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9 1/2% notes indentures. On October 14, 1998, we and The Chase Manhattan Bank,
as trustee, executed a second supplemental indenture to effect such amendment.

THE 11 1/2% DEFERRED COUPON NOTES

In January 1996, we issued $1,050.0 million aggregate principal amount at
maturity of 11 1/2% series A senior deferred coupon notes due 2006, the "old
11 1/2% deferred coupon notes", at a discount to their aggregate principal
amount to generate gross proceeds to us of approximately $600,127,500. The old
11 1/2% deferred coupon notes were issued and sold in a transaction exempt from
the registration requirement of the Securities Act pursuant to Rule 144A under
the Securities Act. On May 23, 1996, we issued $1,050.0 million aggregate
principal amount at maturity of the 11 1/2% series B senior deferred coupon
notes due 2006, the "11 1/2% deferred coupon notes", in exchange for the old
11 1/2% deferred coupon notes pursuant to the indenture relating thereto, the
"11 1/2% deferred coupon notes indenture". The terms of the 11 1/2% deferred
coupon notes are identical in all material respects to the old 11 1/2% deferred
coupon notes except for certain transfer restrictions and registration rights
applicable to the old 11 1/2% deferred coupon notes.

The 11 1/2% deferred coupon notes accrete at a rate of 11 1/2% computed on
a semiannual bond equivalent basis to an aggregate principal amount at maturity
of $1,050.0 million. Cash interest on the 11 1/2% deferred coupon notes began to
accrue on February 1, 2001 at the rate of 11 1/2% per annum on the principal
amount. Interest on the 11 1/2% deferred coupon notes is payable semiannually on
February 1 and August 1 of each year, to holders of record on the immediately
preceding January 15, and July 15. The 11 1/2% deferred coupon notes mature on
February 1, 2006. The 11 1/2% deferred coupon notes are redeemable, at our
option at any time, in whole or in part, on or after February 1, 2001 at the
redemption prices set forth in the 11 1/2% deferred coupon notes indenture plus
any accrued unpaid interest to the date of redemption. The 11 1/2% deferred
coupon notes may also be redeemed at our option in whole but not in part in some
circumstances where "Additional Amounts", as defined in the 11 1/2% deferred
coupon notes indenture, are payable under the 11 1/2% notes. In those
circumstances, the 11 1/2% deferred coupon notes to be repurchased must be
repurchased at 100% of accreted value or, as the case may be, principal amount
thereof plus accrued and unpaid interest. Upon a Change of Control Triggering
Event, as defined in the 11 1/2% deferred coupon notes indenture, holders of the
11 1/2% deferred coupon notes have the right to require us to repurchase all or
any part of the 11 1/2% deferred coupon notes at a repurchase price equal to
101% of the accreted value or, as the case may be, principal amount thereof plus
accrued and unpaid interest, if any. Subject to various conditions, we are
obligated to offer to purchase the 11 1/2% deferred coupon notes and other
Qualified Senior Notes, as defined in the 11 1/2% deferred coupon notes
indenture, with the Excess Proceeds of certain Asset Sales at a redemption price
of 100% of the accreted value or, as the case may be, principal amount thereof
plus accrued and unpaid interest, if any. The 11 1/2% deferred coupon notes
indenture contains restrictions with respect to, among other things, the payment
of dividends, the repurchase of stock and the making of some other Restricted
Payments, the incurrence of additional Indebtedness, the creation of some Liens,
some sales of assets, transactions with Subsidiaries and other Affiliates and
mergers and consolidations.

In October 1998, we received the necessary consents of registered holders
of the 11 1/2% deferred coupon notes to amend the 11 1/2% deferred coupon notes
indenture so as to allow us to take certain actions that were previously
prohibited under the 11 1/2% deferred coupon notes indenture, particularly
regarding the financing of our business and pending and future acquisitions,
including our acquisition of NTL Bermuda. In addition, the amendment eliminated
some, but not all, of certain differences between the covenants in the 11 1/2%
deferred coupon notes indenture and the existing 10 3/4% notes, 9 3/4% notes and
9 1/2% notes indentures. On October 14, 1998, NTL and The Chase Manhattan Bank,
as trustee, executed a first supplemental indenture to effect such amendment.

The 11 1/2% deferred coupon notes are our senior unsecured obligations of
ranking equal in right of payment of principal and interest with all of our
other existing and future senior unsecured obligations and rank senior to all of
our other existing and future subordinated debt.

THE 10% NOTES

In February 1997, we issued $400.0 million aggregate principal amount of
our 10% series A senior notes due 2007, the "old 10% notes". The old 10% notes
were issued and sold in a transaction exempt from the

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registration requirement of the Securities Act pursuant to Rule 144A under the
Securities Act. On June 27, 1997 we issued $400.0 million aggregate principal
amount at maturity of its 10% series B senior notes due 2007, the "10% notes",
in exchange for the old 10% notes pursuant to the indenture relating thereto,
the "10% notes indenture". The terms of the 10% notes are identical in all
material respects to the old 10% notes except for certain transfer restrictions
and registration rights applicable to the old 10% notes.

The 10% notes accrue interest in cash at the rate of 10% per annum on the
principal amount payable semiannually on February 15 and August 15 of each year,
to holders of record on the immediately preceding February 1 and August 1. The
10% notes mature on February 15, 2007. The 10% notes are redeemable, at our
option at any time, in whole or in part, on or after February 15, 2002 at
redemption prices set forth in the 10% notes indenture, plus any accrued unpaid
interest to the date of redemption. The 10% notes may also be redeemed at our
option in whole but not in part in some circumstances where "Additional
Amounts", as defined in the 10% notes indenture, are payable under the 10%
notes. In those circumstances, the 10% notes to be repurchased must be
repurchased at 100% of the principal amount thereof plus accrued and unpaid
interest. Upon a Change of Control Triggering Event, as defined in the 10% notes
indenture, holders of the 10% notes have the right to require us to repurchase
all or any part of the 10% notes at a repurchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any. Subject to
various conditions, we are obligated to offer to purchase the 10% notes and
other Qualified Senior Notes, as defined in the 10% notes indenture, with the
Excess Proceeds of some Asset Sales at a redemption price of 100% of the
principal amount thereof plus accrued and unpaid interest, if any. The 10% notes
indenture contains restrictions with respect to, among other things, the payment
of dividends, the repurchase of stock and the making of some other Restricted
Payments, the incurrence of additional Indebtedness, the creation of some Liens,
some sales of assets, transactions with Subsidiaries and other Affiliates and
mergers and consolidations.

In October 1998, we received the necessary consents of registered holders
of the 10% notes to amend the 10% notes indenture so as to allow us to take
certain actions that were previously prohibited under the 10% notes indenture,
particularly regarding the financing of our business and pending and future
acquisitions, including our acquisition of Partners. In addition, the amendment
eliminated some, but not all, differences between the covenants in the 10% notes
indenture and the existing 10 3/4% notes, the 9 3/4% notes and the 9 1/2% notes
indentures. On October 14, 1998, NTL and The Chase Manhattan Bank, as trustee,
executed a first supplemental indenture to effect such amendment.

The 10% notes are our senior unsecured obligations ranking equal in right
of payment of principal and interest with all of our other existing and future
senior unsecured obligations and rank senior to all of our other existing and
future subordinated debt.

THE 9 1/2% NOTES

In March 1998 we issued L125.0 million ($184.8 million) aggregate principal
amount of our 9 1/2% senior notes due 2008, the "old 9 1/2% notes". The old
9 1/2% notes were issued and sold in a transaction exempt from the registration
requirement of the Securities Act pursuant to Rule 144A under the Securities
Act. On December 24, 1998 we closed an exchange offer exchanging L123,686,000
principal amount of the 9 1/2% series B senior notes due 2008, the "new 9 1/2%
notes" and, together with the old 9 1/2% notes, the "9 1/2% notes", registered
under the Securities Act for a like principal amount of the old 9 1/2% notes.
The terms of the new 9 1/2% notes are identical in all material respects to the
old 9 1/2% notes except for some transfer restrictions and registration rights
applicable to the old 9 1/2% notes.

The 9 1/2% notes accrue interest in cash at the rate of 9 1/2% per annum on
the principal amount payable semiannually on April 1, and October 1 of each
year, to holders of record on the immediately preceding March 15 and September
15. The 9 1/2% notes mature on April 1, 2008. The 9 1/2% notes are redeemable at
our option at any time, in whole or in part, on or after April 1, 2003 at
redemption prices set forth in the 9 1/2% notes indenture, plus any accrued
unpaid interest to the date of redemption. The 9 1/2% notes may also be redeemed
at our option in whole but not in part in some circumstances where "Additional
Amounts", as defined in the 9 1/2% notes indenture, are payable under the 9 1/2%
notes. In those circumstances, the 9 1/2% notes to be repurchased must be
repurchased at 100% of the principal amount thereof plus accrued and unpaid
interest. Upon a Change of Control Triggering Event, as defined in the 9 1/2%
notes indenture, holders of the 9 1/2% notes have the right to

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require us to repurchase all or any part of the 10% notes at a repurchase price
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any. Subject to various conditions, we are obligated to offer to purchase the
9 1/2% notes and other Qualified Senior Notes, as defined in the 9 1/2% notes
indenture, with the Excess Proceeds of certain Asset Sales at a redemption price
of 100% of the principal amount thereof plus accrued and unpaid interest, if
any. The 9 1/2% notes indenture contains restrictions with respect to, among
other things, the payment of dividends, the repurchase of stock and the making
of some other Restricted Payments, the incurrence of additional Indebtedness,
the creation of some Liens, some sales of assets, transactions with Subsidiaries
and other Affiliates and mergers and consolidations.

The 9 1/2% notes are senior unsecured obligations of NTL ranking equal in
right of payment of principal and interest with all of its other existing and
future senior unsecured obligations and rank senior to all of its other existing
and future subordinated debt.

THE 10 3/4% NOTES

In March 1998, we issued L300.0 million ($443.6 million) aggregate
principal amount of maturity of our 10 3/4% senior deferred coupon notes due
2008, the "old 10 3/4% notes", at a discount to their aggregate principal amount
to generate gross proceeds to us of approximately L124,587,000. The old 10 3/4%
notes were issued and sold in a transaction exempt from the registration
requirement of the Securities Act pursuant to Rule 144A under the Securities
Act. On December 24, 1998 we closed an exchange offer exchanging L300.0 million
principal amount at maturity of the 10 3/4% series B senior deferred coupon
notes due 2008, the "new 10 3/4% notes" and, together with the old 10 3/4%
notes, the "10 3/4% notes", registered under the Securities Act for a like
principal amount at maturity of the old 10 3/4% notes. The terms of the new
10 3/4% notes are identical in all material respects to the old 10 3/4% notes
except for some transfer restrictions and registration rights applicable to the
old 10 3/4% notes.

The 10 3/4% notes accrete at a rate of 10 3/4% computed on a semiannual
bond equivalent basis to an aggregate principal amount at maturity of L300.0
million. Cash interest on the 10 3/4% notes does not accrue until April 1, 2003.
Thereafter, the 10 3/4% notes accrue interest in cash at the rate of 10 3/4% per
annum on the principal amount payable semiannually on April 1 and October 1 of
each year, commencing April 1, 2003, to holders of record on the immediately
preceding March 15, and September 15. The 10 3/4% notes mature on April 1, 2008.
The 10 3/4% notes are redeemable, at our option at any time, in whole or in
part, on or after April 1, 2003 at the redemption prices set forth in the
10 3/4% notes indenture plus any accrued unpaid interest to the date of
redemption. The 10 3/4% notes may also be redeemed at our option in whole but
not in some circumstances where "Additional Amounts", as defined in the 10 3/4%
notes indenture, are payable under the 10 3/4% notes. In those circumstances,
the 10 3/4% notes to be repurchased must be repurchased at 100% of accreted
value or, as the case may be, principal amount thereof plus accrued and unpaid
interest. Upon a Change of Control Triggering Event, as defined in the 10 3/4%
notes indenture, holders of the 10 3/4% notes have the right to require us to
repurchase all or any part of the 10 3/4% notes at a repurchase price equal to
101% of the accreted value or, as the case may be, principal amount thereof plus
accrued and unpaid interest, if any. Subject to various conditions, we are
obligated to offer to purchase the 10 3/4% notes and other Qualified Senior
Notes, as defined in the 10 3/4% notes indenture, with the Excess Proceeds of
some Asset Sales at a redemption price of 100% of the accreted value or, as the
case may be, principal amount thereof plus accrued and unpaid interest, if any.
The 10 3/4% notes indenture contains restrictions with respect to, among other
things, the payment of dividends, the repurchase of stock and the making of some
other Restricted Payments, the incurrence of additional Indebtedness, the
creation of some Liens, some sales of assets, transactions with Subsidiaries and
other Affiliates and mergers and consolidations.

The 10 3/4% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all of our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 9 3/4% NOTES

In March 1998, we issued $1.3 billion aggregate principal amount at
maturity of our 9 3/4% senior deferred coupon notes due 2008, the "old 9 3/4%
notes", at a discount to their aggregate principal amount to generate gross
proceeds to us of approximately $802,412,000. The old 9 3/4% notes were issued
and sold in a transaction exempt from the registration requirement of the
Securities Act pursuant to Rule 144A under the Securities Act. On
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December 24, 1998 we closed an exchange offer exchanging $1,248,970,000
principal amount at maturity of the 9 3/4% series B senior deferred coupon notes
due 2006, the "new 9 3/4% notes" and, together with the old 9 3/4% notes, the
"9 3/4% notes," registered under the securities act for a like principal amount
at maturity of the old 9 3/4% notes. The terms of the new 9 3/4% notes are
identical in all material respects to the old 9 3/4% notes except for some
transfer restrictions and registration rights applicable to the old 9 3/4%
notes.

The 9 3/4% notes accrete at a rate of 9 3/4% computed on a semiannual bond
equivalent basis to an aggregate principal amount at maturity of $1.3 billion.
Cash interest on the 9 3/4% notes does not accrue until April 1, 2003.
Thereafter, the 9 3/4% notes accrue interest in cash at the rate of 9 3/4% per
annum on the principal amount payable semiannually on April 1 and October 1 of
each year, commencing April 1, 2003, to holders of record on the immediately
preceding March 15, and September 15. The 9 3/4% notes mature on April 1, 2008.
The 9 3/4% notes are redeemable, at our option at any time, in whole or in part,
on or after April 1, 2003 at the redemption prices set forth in the 9 3/4% notes
indenture plus any accrued unpaid interest to the date of redemption. The 9 3/4%
notes may also be redeemed at our option in whole but not in part in certain
circumstances where "Additional Amounts", as defined in the 9 3/4% notes
indenture, are payable under the 9 3/4% notes. In those circumstances, the
9 3/4% notes to be repurchased must be repurchased at 100% of the accreted value
or, as the case may be, principal amount thereof plus accrued and unpaid
interest. Upon a Change of Control Triggering Event, as defined in the 9 3/4%
notes indenture, holders of the 9 3/4% notes have the right to require us to
repurchase all or any part of the 9 3/4% notes at a repurchase price equal to
101% of the accreted value or, as the case may be, principal amount thereof plus
accrued and unpaid interest, if any. Subject to various conditions, we are
obligated to offer to purchase the 9 3/4% notes and other Qualified Senior
Notes, as defined in the 9 3/4% notes indenture, with the Excess Proceeds of
some Asset Sales at a redemption price of 100% of the accreted value or, as the
case may be, principal amount thereof plus accrued and unpaid interest, if any.
The 9 3/4% notes indenture contains restrictions with respect to, among other
things, the payment of dividends, the repurchase of stock and the making of some
other Restricted Payments, the incurrence of additional Indebtedness, the
creation of some Liens, some sales of assets, transactions with Subsidiaries and
other Affiliates and mergers and consolidations.

The 9 3/4% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all of our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 1999 9 3/4% NOTES

On April 7, 1999, we issued L330.0 million ($488.0 million) aggregate
principal amount at maturity of our 9 3/4% senior deferred coupon notes due
2009, the "1999 9 3/4% notes". The 1999 9 3/4% notes were offered and sold in
transactions exempt from the registration requirements of the Securities Act
pursuant to Rule 144A under 144A under the Securities Act and Regulation S under
the Securities Act. On September 3, 1999, we closed an exchange offer exchanging
L327,826,000 aggregate principal amount at maturity of 1999 9 3/4% notes for a
like principal amount of 1999 9 3/4% Series B senior deferred coupon note, due
2008, the "1999 9 3/4% new notes" and, together with the 1999 9 3/4% old notes,
the "1999 9 3/4% notes." The terms of the 1999 9 3/4% new notes are identical to
the 1999 9 3/4% old notes except for certain transfer restrictions and
registration rights applicable to the 1999 9 3/4% old notes.

The 1999 9 3/4% notes accrete at a rate of 9 3/4% computed on a semiannual
bond equivalent basis to an aggregate principal amount at maturity of L330.0
million. Cash interest on the 1999 9 3/4% notes does not accrue until April 15,
2004. Thereafter, the 1999 9 3/4% notes accrue interest in cash at the rate of
9 3/4% per annum on the principal amount payable semiannually on April 15 and
October 15 of each year, commencing October 15, 2004, to holders of record on
the immediately preceding April 1 and October 1. The 1999 9 3/4% notes mature on
April 15, 2009. The 9 3/4% notes are redeemable, at our option at any time, in
whole or in part, on or after April 15, 2004 at the redemption prices set forth
in the 1999 9 3/4% notes indenture plus any accrued unpaid interest to the date
of redemption. The 1999 9 3/4% notes may also be redeemed at our option in whole
but not in part in some circumstances where "Additional Amounts", as defined in
the 1999 9 3/4% notes indenture, are payable under the 1999 9 3/4% notes. In
those circumstances, the 1999 9 3/4% notes to be repurchased must be repurchased
at 100% of accreted value or, as the case may be, principal amount thereof plus
accrued and unpaid interest. Upon a Change of Control Triggering Event, as
defined in the 1999 9 3/4% notes indenture, holders of the 1999 9 3/4% notes
have the right to require us to repurchase all or any part of the 1999 9 3/4%
notes at a repurchase
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price equal to 101% of the accreted value or, as the case may be, principal
amount thereof plus accrued and unpaid interest, if any. Subject to various
conditions, we are obligated to offer to purchase the 1999 9 3/4% notes and
Other Qualified Notes, as defined in the 1999 9 3/4% notes indenture, with the
Excess Proceeds of some Asset Sales at a redemption price of 100% of the
accreted value or, as the case may be, principal amount thereof plus accrued and
unpaid interest, if any. The 1999 9 3/4% notes indenture contains restrictions
with respect to, among other things, the payment of dividends, the repurchase of
stock and the making of some other Restricted Payments, the incurrence of
additional Indebtedness, the creation of some Liens, some sales of assets,
transactions with Subsidiaries and other Affiliates and mergers and
consolidations.

The 1999 9 3/4% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all of its other existing and
future senior unsecured obligations and rank senior to all of its other existing
and future subordinated debt, including, without limitation, the convertible
notes and the existing convertible notes.

THE 11 1/2% NOTES

On November 2, 1998, we issued $625.0 million aggregate principal amount of
our 11 1/2% senior notes due 2008, the "11 1/2% old notes". The 11 1/2% old
notes were offered and sold in transactions exempt from the registration
requirement of the Securities Act pursuant to Rule 144A under the Securities Act
and Regulation S under the Securities Act. On June 10, 1999, we closed an
exchange offer exchanging $625.0 million aggregate principal amount of 11 1/2%
old notes for a like principal amount of 11 1/2% series B senior notes due 2008,
the "11 1/2% new notes" and, together with the 11 1/2% old notes, the "11 1/2%
notes." The terms of the 11 1/2% new notes are identical in all material
respects to the 11 1/2% old notes except for certain transfer restrictions and
registration rights applicable to the 11 1/2% old notes.

The 11 1/2% notes accrue interest in cash at the rate of 11 1/2% per annum
on the principal amount payable semiannually on April 1, and October 1 of each
year, to holders of record on the immediately preceding March 15 and September
15. The 11 1/2% notes mature on October 1, 2008. The 11 1/2% notes are
redeemable at our option at any time, in whole or in part, on or after October
1, 2003 at redemption prices set forth in the 11 1/2% notes indenture, plus any
accrued unpaid interest to the date of redemption. The 11 1/2% notes may also be
redeemed at our option in whole but not in part in some circumstances where
"Additional Amounts", as defined in the 11 1/2% notes indenture, are payable
under the 11 1/2% notes. In those circumstances, the 11 1/2% notes to be
repurchased must be repurchased at 100% of the principal amount thereof plus
accrued and unpaid interest. Upon a Change of Control Triggering Event, as
defined in the 11 1/2% notes indenture, holders of the 11 1/2% notes have the
right to require us to repurchase all or any part of the 11 1/2% notes at a
repurchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any. Subject to various conditions, we are obligated to
offer to purchase the 11 1/2% notes and other Qualified Senior Notes, as defined
in the 11 1/2% notes indenture, with the Excess Proceeds of some Asset Sales at
a redemption price of 100% of the principal amount thereof plus accrued and
unpaid interest, if any. The 11 1/2% notes indenture contains restrictions with
respect to, among other things, the payment of dividends, the repurchase of
stock and the making of some other Restricted Payments, the incurrence of
additional Indebtedness, the creation of some Liens, some sales of assets,
transactions with Subsidiaries and other Affiliates and mergers and
consolidations.

The 11 1/2% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 12 3/8% NOTES

On November 6, 1998, we issued $450.0 million aggregate principal amount at
maturity of our 12 3/8% senior deferred coupon notes due 2008, the "12 3/8% old
notes". The 12 3/8% old notes were offered and sold in transactions exempt from
the registration requirements of the Securities Act pursuant to Rule 144A under
144A under the Securities Act and Regulation S under the Securities Act. On June
10, 1999, we closed an exchange offer exchanging $450.0 million aggregate
principal amount at maturity of 12 3/8% old notes for a like principal amount of
12 3/8% series B senior deferred coupon notes due 2008, the "12 3/8% new notes"
and, together with the 12 3/8% old notes, the "12 3/8% notes." The terms of the
12 3/8% new notes are identical in all material respects to

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the 12 3/8% old notes except for certain transfer restrictions and registration
rights applicable to the 12 3/8% old notes.

The 12 3/8% notes accrete at a rate of 12 3/8% computed on a semiannual
bond equivalent basis to an aggregate principal amount at maturity of $450.0
million. Cash interest on the 12 3/8% notes does not accrue until April 1, 2003.
Thereafter, the 12 3/8% notes accrue interest in cash at the rate of 12 3/8% per
annum on the principal amount payable semiannually on April 1 and October 1 of
each year, commencing October 1, 2003, to holders of record on the immediately
preceding March 15, and September 15. The 12 3/8% notes mature on October 1,
2008. The 12 3/8% notes are redeemable, at our option at any time, in whole or
in part, on or after October 1, 2003 at the redemption prices set forth in the
12 3/8% notes indenture plus any accrued unpaid interest to the date of
redemption. The 12 3/8% notes may also be redeemed at our option in whole but
not in part in some circumstances where "Additional Amounts", as defined in the
12 3/4% notes indenture, are payable under the 12 3/8% notes. In those
circumstances, the 12 3/8% notes to be repurchased must be repurchased at 100%
of accreted value or, as the case may be, principal amount thereof plus accrued
and unpaid interest. Upon a Change of Control Triggering Event, as defined in
the 12 3/8% notes indenture, holders of the 12 3/8% notes have the right to
require us to repurchase all or any part of the 12 3/8% notes at a repurchase
price equal to 101% of the accreted value or, as the case may be, principal
amount thereof plus accrued and unpaid interest, if any. Subject to various
conditions, we are obligated to offer to purchase the 12 3/8% notes and other
Qualified Senior Notes, as defined in the 12 3/8% notes indenture, with the
Excess Proceeds of some Asset Sales at a redemption price of 100% of the
accreted value or, as the case may be, principal amount thereof plus accrued and
unpaid interest, if any. The 12 3/8% notes indenture contains restrictions with
respect to, among other things, the payment of dividends, the repurchase of
stock and the making of some other Restricted Payments, the incurrence of
additional Indebtedness, the creation of some Liens, some sales of assets,
transactions with Subsidiaries and other Affiliates and mergers and
consolidations.

The 12 3/8% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all of our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 1999 11 1/2% NOTES

On November 24, 1999, we issued E210.0 million ($185.6 million) aggregate
principal amount at maturity of our 11 1/2% senior deferred coupon notes due
2009 (the "1999 11 1/2% notes"). The 1999 11 1/2% notes were offered and sold in
transactions exempt from the registration requirements of the Securities Act
under Rule 144A under the Securities Act and Regulation S under the Securities
Act. On April 5, 2000, we closed an exchange offer exchanging E210.0 million
aggregate principal amount of old notes for a like principal amount of 11 1/2%
series B senior notes, the "11 1/2% new notes" and, together with the 11 1/2%
old notes, the "11 1/2% notes". The terms of the 11 1/2% new notes are identical
in all material respects to the 11 1/2% old notes except for certain transfer
restrictions and other registration rights applicable to the 11 1/2% old notes.

The 1999 11 1/2% notes accrete at a rate of 11 1/2% computed on a
semiannual bond equivalent basis to an aggregate principal amount at maturity of
E210.0 million. Cash interest on the 1999 11 1/2% notes does not accrue until
November 15, 2004. Thereafter, the 1999 11 1/2% notes accrue interest in cash at
the rate of 11 1/2% per annum on the principal amount payable semiannually on
May 15 and November 15 of each year, commencing May 15, 2005, to holders of
record on the immediately preceding May 1 and November 1. The 1999 11 1/2% notes
mature on November 15, 2009. The 1999 11 1/2% notes are redeemable, at our
option at any time, in whole or in part, on or after November 15, 2004 at the
redemption prices set forth in the 1999 11 1/2% notes indenture plus any accrued
unpaid interest to the date of redemption. The 1999 11 1/2% notes may also be
redeemed at our option in whole but not in part in some circumstances where
"Additional Amounts", as defined in the 1999 11 1/2% notes indenture, are
payable under the 1999 11 1/2% notes. In those circumstances, the 1999 11 1/2%
notes to be purchased must be repurchased at 100% of accreted value or, as the
case may be, principal amount thereof plus accrued and unpaid interest. Upon a
Change of Control Triggering Event, as defined in the 1999 11 1/2% notes
indenture, holders of the 1999 9 3/4% notes have the right to require us to
repurchase all or any part of the 1999 11 1/2% notes at a repurchase price equal
to 101% of the accreted value or, as the case may be, principal amount thereof
plus accrued and unpaid interest, if any. Subject to various conditions, we are
obligated to offer to purchase the 1999 11 1/2% notes and Other Qualified Notes,
as defined in the 1999 11 1/2% notes indenture, with the Excess Proceeds of some
Asset Sales at a redemption price of 100% of the accreted value or, as the case
may be,
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principal amount thereof plus accrued and unpaid interest, if any. The 1999
11 1/2% notes indenture contains restrictions with respect to, among other
things, the payment of dividends, the repurchase of stock and the making of some
other Restricted Payments, the incurrence of additional Indebtedness, the
creation of some Liens, some sales of assets, transactions with Subsidiaries and
other Affiliates and mergers and consolidations.

The 1999 11 1/2% notes are our senior unsecured obligations ranking equal
in right of payment of principal and interest with all of our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 9 1/4% NOTES

On November 24, 1999, we issued E250.0 million ($220.9 million) aggregate
principal amount of our 9 1/4% senior notes due 2006. The 9 1/4% notes were
offered and sold in transactions exempt from the registration requirement of the
Securities Act pursuant to Rule 144A under the Securities Act and Regulation S
under the Securities Act. On April 5, 2000, we closed an exchange offer
exchanging E246,855,000 aggregate principal amount of old notes for a like
principal amount of 9 1/4% series B senior notes, the "9 1/4% new notes" and,
together with the 9 1/4% old notes, the "9 1/4% notes". The terms of the 9 1/4%
new notes are identical in all material respects to the 9 1/4% old notes except
for certain transfer restrictions and other registration rights applicable to
the 9 1/4% old notes.

The 9 1/4% notes accrue interest in cash at the rate of 9 1/4% per annum on
the principal amount payable semiannually on May 15, and November 15 of each
year, to holders of record on the immediately preceding May 1 and November 1.
The 9 1/4% notes mature on November 15, 2006. The 9 1/4% notes are not
redeemable. The 9 1/2% notes may only be redeemed at our option in whole but not
in part in some circumstances where "Additional Amounts", as defined in the
9 1/4% notes indenture, are payable under the 9 1/4% notes. In those
circumstances, the 9 1/4% notes to be repurchased must be repurchased at 100% of
the principal amount thereof plus accrued and unpaid interest. Upon a Change of
Control Triggering Event, as defined in the 9 1/4% notes indenture, holders of
the 9 1/4% notes have the right to require us to repurchase all or any part of
the 9 1/4% notes at a repurchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any. Subject to various conditions,
we are obligated to offer to purchase the 9 1/4% notes and other Qualified
Senior Notes, as defined in the 9 1/4% notes indenture, with the Excess Proceeds
of some Asset Sales at a redemption price of 100% of the principal amount
thereof plus accrued and unpaid interest, if any. The 9 1/4% notes indenture
contains restrictions with respect to, among other things, the payment of
dividends, the repurchase of stock and the making of some other Restricted
Payments, the incurrence of additional Indebtedness, the creation of some Liens,
some sales of assets, transactions with Subsidiaries and other Affiliates and
mergers and consolidations.

The 9 1/4% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 9 7/8% NOTES

On November 24, 1999, we issued E350.0 million ($309.3 million) aggregate
principal amount of our 9 7/8% senior notes due 2009, the "9 7/8% notes". The
9 7/8% notes were offered and sold in transaction exempt from the registration
requirement of the Securities Act pursuant to Rule 144A under the Securities Act
and Regulation S under the Securities Act. On April 5, 2000, we closed an
exchange offer exchanging E349,925,000 aggregate principal amount of old notes
for a like principal amount of 9 7/8% series B senior notes, the "9 7/8% new
notes" and, together with the 9 7/8% old notes, the 9 7/8% notes. The terms of
9 7/8% new notes, are identical in all material respects to the 9 7/8% old notes
except for certain transfer restrictions and other registration rights
applicable to the 9 7/8% old notes.

The 9 7/8% notes accrue interest in cash at the rate of 9 7/8% per annum on
the principal amount payable semiannually on May 15, and November 15 of each
year, to holders of record on the immediately preceding May 1 and November 1.
The 9 7/8% notes mature on November 15, 2009. The 9 7/8% notes are redeemable at
our option at any time, in whole or in part, on or after November 15, 2006 at
redemption prices set forth in the 9 7/8% notes indenture, plus any accrued
unpaid interest to the date of redemption. The 9 7/8% notes may also be redeemed
at our option in whole but not in part in some circumstances where "Additional
Amounts", as defined

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in the 9 7/8% notes indenture, are payable under the 9 7/8% notes. In those
circumstances, the 9 7/8% notes to be repurchased must be repurchased at 100% of
the principal amount thereof plus accrued and unpaid interest. Upon a Change of
Control Triggering Event, as defined in the 9 7/8% notes indenture, holders of
the 9 7/8% notes have the right to require us to repurchase all or any part of
the 9 7/8% notes at a repurchasing price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any. Subject to various conditions,
we are obligated to offer to purchase the 9 7/8% notes and other Qualified
Senior Notes, as defined in the 9 7/8% notes indenture, with the Excess Proceeds
of some Asset Sales at a redemption price of 100% of the principal amount
thereof plus accrued and unpaid interest, if any. The 9 7/8% notes indenture
contains restrictions with respect to, among other things, the payment of
dividends, the repurchase of stock and the making of some other Restricted
Payments, the incurrence of additional Indebtedness, the creation of some Liens,
some sales of assets, transactions with Subsidiaries and other Affiliates and
mergers and consolidations.

The 9 7/8% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 11 7/8% NOTES

On October 2, 2000, we issued $500.0 million aggregate principal amount of
our 11 7/8% senior notes due 2010, the "old 11 7/8% notes", at a discount to
their aggregate principal amount to generate gross proceeds to us of
approximately $489.4 million. The 11 7/8% notes were offered and sold in
transactions exempt from the registration requirement of the Securities Act
pursuant to Rule 144A under the Securities Act and Regulation S under the
Securities Act. On February 8, 2001, we closed an exchange offer exchanging all
of the outstanding old 11 7/8% notes for a like principal amount of 11 7/8%
series B senior notes, the "11 7/8% new notes" and, together with the 11 7/8%
old notes, the "11 7/8% notes". The terms of the 11 7/8% new notes are identical
in all material respects to the 11 7/8% old notes except for certain transfer
restrictions and other registration rights applicable to the 11 7/8% old notes.

The 11 7/8% notes accrue interest in cash at a rate of 11 7/8% per annum on
the principal amount payable semiannually on April 1, and October 1 of each
year, to holders of record on the immediately preceding March 15 and September
15, respectively. The 11 7/8% notes mature on October 1, 2010. The 11 7/8% notes
are redeemable, at our option at any time, in whole or in part, on or after
October 1, 2005 at redemption prices set forth in the 11 7/8% notes indenture,
plus accrued unpaid interest to the date of redemption. The 11 7/8% notes may
also be redeemed at our option in whole but not in part in some circumstances
where "Additional Amounts", as defined in the 11 7/8% notes indenture, are
payable under the 11 7/8% notes. In those circumstances, the 11 7/8% notes to be
repurchased must be repurchased at 100% of the principal amount thereof plus
accrued and unpaid interest. Upon a Change of Control Triggering Event, as
defined in the 11 7/8% notes indenture, holders of the 11 7/8% notes have the
right to require us to repurchase all or any part of the 11 7/8% notes at a
repurchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any. Subject to various conditions, we are obligated to
offer to purchase the 11 7/8% notes and Other Qualified Notes, as defined in the
11 7/8% notes indenture, with the Excess Proceeds of some Asset Sales at a
redemption price of 100% of the principal amount thereof plus accrued and unpaid
interest, if any. The 11 7/8% notes indenture contains restrictions with respect
to, among other things, the payment of dividends, the repurchase of stock and
the making of some other Restricted Payments, the incurrence of additional
Indebtedness, the creation of some Liens, some sales of assets, transactions
with Subsidiaries and other Affiliates and mergers and consolidations.

The 11 7/8% notes are our senior unsecured obligations ranking equal in
right of payment of principal and interest with all of our other existing and
future senior unsecured obligations and rank senior to all of our other existing
and future subordinated debt.

THE 7% CONVERTIBLE NOTES

In December 1998, we issued and sold an aggregate principal amount of
$600.0 million of our 7% convertible subordinated notes due 2008, in
transactions exempt from, or not subject to, the registration requirements of
the Securities Act. Cash interest on the existing convertible notes is payable
semiannually on June 15 and December 15 of each year, commencing December 15,
1999. These convertible notes mature on December 15, 2008. These convertible
notes are convertible at the option of the holder thereof at any time prior to
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maturity, unless previously redeemed, into shares of common stock of NTL
Incorporated, at a conversion price of $61.25 per share subject to further
adjustment in some events. These convertible notes are redeemable, in whole or
in part, at our option, at any time on or after December 15, 2001, at the
redemption prices set forth in the indenture pursuant to which the convertible
notes were issued. Upon a Change of Control Triggering Event, as defined in the
indenture relating to those convertible notes, holders of the convertible notes
have the right to require us to purchase all or any part of the convertible
notes at a purchase price equal to 101% of the principal amount thereof and any
accrued and unpaid interest to the date of purchase. The indenture relating to
those convertible notes contains restrictions with respect to, among other
things, some Asset Sales, payment of Additional Amounts and mergers and
consolidations.

These convertible notes are unsecured obligations of ours, as well as NTL
Incorporated and NTL Delaware, subordinated in right of payment to all of our
existing and their future senior debt, as defined in the indenture relating to
those convertible notes, including, without limitation, the notes.

On June 7, 1999, the Commission declared effective the shelf registration
statement relating to the resale of these convertible notes and the common stock
of NTL Incorporated issuable upon conversion thereof by the holders thereof and
on August 30, 2000 declared effective a post-effective amendment to that
registration statement.

NTL COMMUNICATIONS AND NTL INCORPORATED 6 3/4% CONVERTIBLE NOTES

In May 2001, we and NTL Incorporated issued and sold an aggregate principal
amount of $1,150.0 million of 6 3/4% convertible subordinated notes due 2008, in
transactions exempt from the registration requirements of the Securities Act.
Cash interest on the existing convertible notes is payable semiannually on May
15 and November 15 of each year, commencing November 15, 2001. These convertible
notes mature May 15, 2008. These convertible notes are convertible at the option
of the holder thereof at any time prior to maturity, unless previously redeemed,
into shares of common stock of NTL Incorporated, at a conversion price of
$32.728 per share subject to further adjustment in some events. These
convertible notes are redeemable, in whole or in part, at our option and the
option of NTL Incorporated, at any time after May 20, 2004, on at least 30 but
not more than 60 days' prior notice, at the redemption prices set forth in the
indenture pursuant to which the convertible notes were issued, together with
accrued and unpaid interest, if any, to the date of redemption.

Upon a Change of Control Triggering Event, as defined in the indenture
relating to those convertible notes, holders of the convertible notes have the
right to require us and NTL Incorporated to purchase all or any part of the
convertible notes at a purchase price equal to 101% of the principal amount
thereof and any accrued and unpaid interest to the date of purchase. The
indenture relating to those convertible notes contains restrictions with respect
to, among other things, payment of Additional Amounts and mergers and
consolidations. These convertible notes are the joint and several unsecured
obligations of NTL Incorporated and us. The obligations of NTL Incorporated will
be subordinate in right of payment to the respective existing and future senior
debt of NTL Incorporated, as defined in the indenture relating to those
convertible notes. The convertible notes are the senior debts of us.

Pursuant to the terms of the registration rights agreement relating to
those convertible notes, we and NTL Incorporated are required, within 135 days
after the closing of the sale of the convertible notes, to file a shelf
registration statement with the Commission with respect to the convertible
notes, to use their best efforts to cause such shelf registration to be declared
effective by the Commission within 255 days after the closing and to keep such
shelf registration statement continuously effective under the Securities Act
until, subject to some exceptions specified in the registration rights
agreement, the second anniversary of the closing.

NTL TRIANGLE 11.20% DISCOUNT DEBENTURES DUE 2007

On November 15, 1995, NTL Triangle issued $517,321,000 aggregate principal
amount at maturity of its 11.20% senior discount debentures due 2007, the "NTL
Triangle 11.20% debentures", at a discount to their aggregate principal amount
to generate gross proceeds to NTL Triangle of approximately $299,999,621. The
NTL Triangle 11.20% debentures were registered with the Commission on NTL
Triangle's registration statement on Form S-1 (File No. 33-96932).

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The NTL Triangle 11.20% debentures accrete at the rate of 11.20% per annum,
compounded semiannually to an aggregate principal amount at maturity of
$517,321,000. Cash interest on the NTL Triangle 11.20% debentures began to
accrue on November 15, 2000 at the rate of 11.20% per annum on the principal
amount. Interest on the 11.20% debentures is payable semiannually on May 15 and
November 15 of each year. The NTL Triangle 11.20% debentures mature on November
15, 2007. The NTL Triangle 11.20% debentures are redeemable, at the option of
NTL Triangle at any time, in whole or in part, on or after November 15, 2000 at
the redemption prices set forth in the NTL Triangle 11.20% debentures indenture
plus accrued and unpaid interest to the date of redemption. The NTL Triangle
11.20% debentures may also be redeemed by NTL Triangle in whole but not in part
in certain circumstances where "Additional Amounts", as defined in the NTL
Triangle 11.20% debentures indenture, are payable on the NTL Triangle 11.20%
debentures after November 15, 2001. In such circumstances, the NTL Triangle
11.20% debentures may be redeemed at 100% of their principal amount plus accrued
and unpaid interest to the date of redemption. Upon a Change of Control
Triggering Event, as defined in the NTL Triangle 11.20% debentures indenture,
holders of the Partners 11.20% debentures have the right to require NTL Triangle
to repurchase all or any part of the NTL Triangle 11.20% debentures at a
repurchase price equal to 101% of the accreted value or, as the case may be,
principal amount thereof plus accrued and unpaid interest, if any. Subject to
various conditions, NTL Triangle is obligated to offer to purchase the NTL
Triangle 11.20% debentures with the Excess Proceeds of some Asset Sales at a
redemption price of 100% of the accreted value or, as the case may be, principal
amount thereof plus accrued and unpaid interest, if any. The NTL Triangle 11.20%
debentures indenture contains restrictions with respect to, among other things,
the payment of dividends, the repurchase of stock and the making of some other
Restricted Payments, the incurrence of additional Indebtedness, the creation of
some Liens, some sales of assets, transactions with Affiliates and mergers and
consolidations.

The NTL Triangle 11.20% debentures are senior unsecured obligations of NTL
Triangle ranking equal in right of payment of principal and interest with all
other existing and future senior unsecured obligations of NTL Triangle.

THE DIAMOND 13 1/4% NOTES

In September 1994, Diamond issued its 13 1/4% senior discount notes due
September 30, 2004 (the "Diamond 13 1/4% notes"). Interest on the Diamond
13 1/4% notes is payable on March 31 and September 30 of each year at a rate of
13 1/4% per annum.

The Diamond 13 1/4% notes are redeemable, in whole or in part, at the
option of Diamond at any time on or after September 30, 1999. The Diamond
13 1/4% notes are also redeemable in whole, but not in part, at the option of
Diamond at any time at 100% of the principal amount thereof plus accrued
interest to the date of redemption (or, prior to September 30, 1999, at 100% of
accreted value, as defined in the indenture governing the Diamond 13 1/4% notes)
in the event of certain tax law changes requiring the payment of additional
amounts. Diamond is required to offer to repurchase all outstanding Diamond
13 1/4% notes at 101% of the principal amount thereof plus accrued interest to
the date of repurchase (or, prior to September 30, 1999, at 101% of accreted
value on the date of repurchase) after the occurrence of a Change of Control, as
defined in the indenture governing the Diamond 13 1/4% notes. In addition, upon
the occurrence of an Asset Disposition, as defined in the indenture governing
the Diamond 13 1/4% notes, Diamond may be obligated to make an offer to purchase
all or a portion of the outstanding Diamond 13 1/4% notes at 100% of the
principal amount thereof plus accrued interest to the date of repurchase (or,
prior to December 15, 2000, at 100% of accreted value on the date of
repurchase).

THE DIAMOND 11 3/4% NOTES

In December 1995, Diamond issued its 11 3/4% senior discount notes due
December 15, 2005 (the "11 3/4% Diamond notes"). Interest on the Diamond 11 3/4%
notes will be payable on June 15 and December 15 of each year, commencing June
15, 2001, at a rate of 11 3/4% per annum.

The Diamond 11 3/4% notes are redeemable, in whole or in part, at the
option of Diamond at any time on or after December 15, 2000. The Diamond 11 3/4%
notes are also redeemable in whole, but not in part, at the option of Diamond at
any time at 100% of the principal amount thereof plus accrued interest to the
date of redemption (or, prior to December 15, 2000, at 100% of the accreted
value thereof, as defined in the indenture governing the Diamond 11 3/4% notes)
in the event of certain tax law changes requiring the payment of additional
amounts.
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Diamond is required to offer to repurchase all outstanding Diamond 11 3/4% notes
at 101% of principal amount thereof plus accrued interest to the date of
repurchase (or, prior to December 15, 2000, at 101% of accreted value on the
date of repurchase) after the occurrence of a Change of Control, as defined in
the indenture governing the Diamond 11 3/4% notes. In addition, upon the
occurrence of an Asset Disposition, as defined in the indenture governing the
Diamond 11 3/4% notes, Diamond may be obligated to make an offer to purchase all
or a portion of the outstanding Diamond 11 3/4% notes at 100% of the principal
amount thereof plus accrued interest to the date of repurchase (or, prior to
December 15, 2000, at 100% of accreted value on the date of repurchase).

THE DIAMOND 10 3/4% NOTES

In February 1997, Diamond issued its 10 3/4% Senior Discount Notes due
February 15, 2007 (the "Diamond 10 3/4% notes"). Interest on the Diamond 10 3/4%
notes will be payable on February 15 and August 15 of each year, commencing
August 15, 2002, at a rate of 10 3/4% per annum.

The Diamond 10 3/4% notes are redeemable, in whole or in part, at the
option of Diamond at any time on or after February 15, 2002. The Diamond 10 3/4%
notes are also redeemable in whole, but not in part, at the option of Diamond at
any time at 100% of the principal amount thereof plus accrued interest to the
date of redemption (or, prior to February 15, 2002, at 100% of accreted value,
as defined in the indenture governing the Diamond 10 3/4% notes) in the event of
certain tax law changes requiring the payment of additional amounts. Diamond is
required to offer to repurchase all outstanding Diamond 10 3/4% notes at 101% of
the principal amount thereof plus accrued interest to the date of repurchase
(or, prior to February 15, 2002, at 101% of accreted value on the date of
repurchase) after the occurrence of a Change of Control, as defined in the
indenture governing the Diamond 10 3/4% notes. In addition, upon the occurrence
of an Asset Disposition, as defined in the indenture governing the Diamond
10 3/4% notes, Diamond may be obligated to make an offer to purchase all or a
portion of the outstanding Diamond 10 3/4% notes at 100% of the principal amount
thereof plus accrued interest to the date of repurchase (or, prior to February
15, 2002, at 100% of accreted value on the date of repurchase).

THE DIAMOND 10% NOTES

In February 1998 Diamond issued L135.0 million aggregate principal amount
at maturity of its 10% senior notes due February 1, 2008 (the "Diamond 10%
notes"). Interest on the Diamond 10% notes is payable semi-annually in arrears
on August 1 and February 1 of each year at a rate of 10% per annum.

The Diamond 10% notes will be redeemable, in whole or in part, at the
option of Diamond at any time on or after February 1, 2003. The 10% notes are
also redeemable in whole, but not in part, at the option of Diamond at any time
at 100% of the principal amount thereof, plus accrued and unpaid interest and
any other amounts payable thereon to the date of redemption in the event of
certain tax law changes requiring the payment of additional amounts. Upon the
occurrence of a Change of Control, as defined in the indenture governing the
Diamond 10% notes, Diamond is required to offer to repurchase all outstanding
10% notes at 101% of their principal amount plus accrued and unpaid interest and
any other amounts payable thereon to the date of repurchase.

THE DIAMOND 9 1/8% NOTES

In February 1998, Diamond issued $110.0 million aggregate principal amount
at maturity of its 9 1/8% senior notes due February 1, 2008 (the "Diamond 9 1/8%
notes"). Interest on the Diamond 9 1/8% notes is payable semi-annually in
arrears on August 1 and February 1 of each year at a rate of 9 1/8% per annum.

The Diamond 9 1/8% notes will be redeemable, in whole or in part, at the
option of Diamond at any time on or after February 1, 2003. The Diamond 9 1/8%
notes are also redeemable in whole, but not in part at the option of Diamond at
any time at 100% of the principal amount thereof, plus accrued and unpaid
interest and any other amounts payable thereon to the date of redemption in the
event of certain tax law changes requiring the payment of additional amounts.
Upon the occurrence of a Change of Control, as defined in the indenture
governing the 9 1/8% notes, Diamond is required to offer to repurchase all
outstanding 9 1/8% notes at 101% of their principal amount plus accrued and
unpaid interest and any other amounts payable thereon to the date of repurchase.

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CREDIT AGREEMENTS

NTLCL, one of our wholly-owned indirect subsidiaries, entered into a
L1,300.0 million ($1,844.7 million) credit agreement with a group of banks dated
May 30, 2000. As of March 31, 2001, no amounts have been borrowed under this
agreement. Although from time to time we have drawn down amounts on this
facility, as of May 31, 2001 no amounts were outstanding under this agreement.
NTLCL and other members of the NTL UK Group may utilize the proceeds under this
credit agreement to finance our working capital requirements, provided that in
no event shall the proceeds be used for a purpose other than to finance the
construction, capital expenditure and working capital needs of a cable
television or telephone or telecommunications business, or a related business,
in the United Kingdom or Ireland. For purposes of this credit agreement, Diamond
Cable Communications Limited and its subsidiaries, NTL (Triangle) LLC and its
subsidiaries and certain other entities are excluded from the NTL UK Group.
Interest is payable at least every six months at LIBOR plus a margin rate of
4.5% per annum. The margin rate shall increase by 0.5% on the three month
anniversary of the initial advance and by an additional 0.5% on each subsequent
three month anniversary, up to a maximum total interest rate of 16% per annum.
The unused portion of the commitment is subject to a commitment fee of 0.75%
payable quarterly. Principal is due in full on March 31, 2006. The credit
agreement contains various financial and other covenants with respect to the NTL
UK Group, and restrictions on dividends and distributions by the NTL UK Group.
Pursuant to the credit agreement, following the issuance in October 2000 of
$500.0 million aggregate principal amount of our 11 7/8% senior notes due 2010
and the issuances in January 2001 and February 2001 of the old notes, the
commitment under the credit facility was reduced by L255.1 million ($362.0
million). Following the issuance of the 6 3/4% convertible senior notes in May
2001, the commitment was further reduced by L456.0 million ($647.1 million). As
a result, the commitment under the facility is now L588.9 million ($835.6
million).

In May 2000, NTLCL and NTL Business Limited, a wholly-owned subsidiary of
NTL Delaware, entered into a L2,500.0 million ($3,547.5 million) credit
agreement in connection with the ConsumerCo acquisition. As of March 31, 2001,
L2,500.0 million ($3,547.5 million) was outstanding under the credit agreement.
Interest is payable at least every six months at LIBOR plus a margin rate of
2.25% per annum, which is subject to adjustment based on the ratio of EBITDA to
finance charges of the NTL UK Group. The effective rate at March 31, 2001 was
8.03%. Any 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. Principal is due in six quarterly installments beginning
on June 30, 2004. The credit agreement contains various financial and other
covenants with respect to the NTL UK Group, and restrictions on dividends and
distributions by the NTL UK Group. On February 21, 2001, as required by the NTL
Business and NTLCL credit agreement, we completed a transaction whereby we
acquired the entire issued share capital of NTL (CWC Holdings) Limited, which is
the entity that owns ConsumerCo, from NTL Incorporated and the entire issued
share capital of NTL Business from NTL Delaware in exchange for shares of our
common stock. As a result of this transaction, ConsumerCo and NTL Business
became our subsidiaries, and NTL Business' interest in the L2,500.0 million
credit agreement was assigned to a subsidiary of NTLCL.

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FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain U.S. federal income tax consequences
of the acquisition, ownership and disposition of new notes by a holder that
acquires new notes on original issuance pursuant to the exchange offer for old
notes. The discussion is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations, judicial authorities, published
positions of the Internal Revenue Service (the "IRS") and other applicable
authorities, all as in effect on the date hereof and all of which are subject to
change or differing interpretations (possibly with retroactive effect). The
discussion does not address all of the tax consequences that may be relevant to
a particular holder or to holders subject to special treatment under federal
income tax laws. This discussion is limited to holders who hold their new notes
and old notes as capital assets. No ruling has been or will be sought from the
IRS regarding any matter discussed herein. No assurance can be given that the
IRS would not assert, or that a court would not sustain, a position contrary to
any of the tax aspects set forth below. PROSPECTIVE INVESTORS MUST CONSULT THEIR
OWN TAX ADVISORS AS TO THE FEDERAL INCOME TAX CONSEQUENCES OF ACQUIRING, HOLDING
AND DISPOSING OF NEW NOTES, AS WELL AS THE EFFECTS OF STATE, LOCAL AND NON-U.S.
TAX LAWS.

For purposes of this discussion, a holder who is a U.S. person means any
one of the following:

- a citizen or resident of the United States,

- a corporation, partnership, or other entity created or organized in the
United States or under the laws of the United States or of any political
subdivision of the United States,

- an estate, the income of which is includible in gross income for U.S.
federal income tax purposes regardless of its source, or

- a trust, the administration of which is subject to the primary
supervision of the U.S. courts and that has one or more U.S. persons who
have the authority to control all substantial decisions of the trust, or
that was in existence on August 20, 1996 and properly elected to continue
to be treated as a U.S. person.

As used herein, the term "U.S. holder" means a holder that is a U.S. person
and the term "non-U.S. holder" means a holder that is not a U.S. person.

U.S. HOLDERS

Payments of Interest. Payments of interest on new notes generally will be
taxable to a U.S. holder as ordinary interest income at the time such payments
are accrued or received (in accordance with the U.S. holder's method of
accounting for federal income tax purposes).

A cash basis U.S. holder receiving an interest payment in Euros on a note
will be required to include in income the U.S. dollar value of such payment
(determined using the spot rate in effect on the date such payment is received)
regardless of whether such payment is subsequently converted into U.S. dollars.
No ordinary gain or loss will be recognized by such holder if the Euros are
converted to U.S. dollars on the date received. The U.S. federal income tax
consequences of the conversion of Euros into U.S. dollars is described below.
See "-- Transactions in Euros."

An accrual basis U.S. holder will be required to include in income the U.S.
dollar value of the amount of interest income that has accrued on a note in a
taxable year, determined by translating such income at the average rate of
exchange for the relevant interest accrual period or, with respect to an
interest accrual period that spans two taxable years, at the average rate for
the portion of such interest accrual period within the taxable year. The average
rate of exchange for an interest accrual period (or portion thereof) is the
simple average of the exchange rates for each business day of such period (or
such other average that is reasonably derived and consistently applied). An
accrual basis U.S. holder may elect to translate interest income on a note using
the spot rate in effect on the last day of an interest accrual period (or the
last day of the taxable year for the portion of such period within the taxable
year). In addition, a U.S. holder may alternatively elect to use the spot rate
in effect on the date of receipt (or payment) for such purpose if such date is
within five business days of the last date of an interest accrual period. An
election must be made in a statement filed with the taxpayer's return and is
applicable to all debt instruments for such year and thereafter unless changed
with the consent of the IRS.

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Upon receipt of an interest payment on a note, an accrual basis U.S. holder
will recognize ordinary gain or loss with respect to accrued interest income in
an amount equal to the difference between the U.S. dollar value of the payment
received (determined using the spot rate in effect on the date such payment is
received) in respect of such interest accrual period and the U.S. dollar value
of the interest income accrued during such interest accrual period (as
determined in the preceding paragraph). Any such ordinary gain or loss will
generally not be treated as interest income or expense, except to the extent
provided by future regulations or administrative pronouncements of the IRS. The
U.S. federal income tax consequences of the conversion of Euros into U.S.
dollars is described below. See "-- Transactions in Euros."

Exchange Offer. Pursuant to the exchange offer, an exchange of the old
notes for new notes will not be a taxable event for U.S. federal income tax
purposes. See "Registration Rights." Thus, a U.S. holder will have the same tax
basis and holding period in the new notes received as in the old notes
surrendered in exchange therefor.

Purchase of Old Notes at a Premium. A U.S. holder that purchases a note
for an amount in excess of the remaining redemption amount will be considered to
have purchased the note with "amortizable bond premium" equal to the amount of
the excess. Such holder may elect to amortize such premium, as an offset to
interest income, as it accrues under a constant-yield method over the remaining
term of the note. Such election, once made, generally applies to all debt
instruments, other than instruments the interest on which is excludible from
gross income, held or subsequently acquired by the U.S. holder on or after the
first taxable year to which the election applies. Such election may be revoked
only with the consent of the IRS Commissioner. A U.S. holder that elects to
amortize such premium must reduce its tax basis in a note by the amount of the
premium amortized during its holding period. For a U.S. holder that does not
elect to amortize bond premium, the amount of such premium will be included in
the U.S. holder's tax basis when the note matures or is disposed of by the U.S.
holder. Therefore, a U.S. holder that does not elect to amortize premium and
holds the note to maturity will generally be required to treat the premium as
capital loss when the note matures (assuming the note is held as a capital
asset).

Amortizable bond premium in respect of a foreign currency note will be
computed in the specified currency and will reduce interest income in the
specified currency. At the time amortized bond premium offsets interest income,
exchange gain or loss, which will be taxable as ordinary income or loss, will be
realized on the amortized bond premium on such note based on the difference
between (1) the spot rate of exchange on the date or dates such premium is
recovered through interest payments on the note and (2) the spot rate of
exchange on the date on which the U.S. holder acquired the note.

Disposition of New Notes. Upon the sale or other disposition of a new
note, a U.S. holder will generally recognize capital gain or loss equal to the
difference between the amount realized on the sale or other disposition (if
realized in Euros, the U.S. dollar value of the amount using the spot rate in
effect on the date of such sale or other disposition) and the holder's adjusted
tax basis in the new note. For these purposes, the amount realized on the sale
or other disposition of a new note does not include any amount received
attributable to accrued but unpaid interest, which will be taxable as ordinary
income unless previously taken into account. Capital gain or loss on the sale or
other disposition of a new note will be long-term capital gain or loss if the
new note and the old note were held for a total of more than one year.

A U.S. holder's tax basis in a new note generally will be the U.S. dollar
value of the purchase price of the old note on the date of purchase (determined
by translating the purchase price into U.S. dollars at the spot rate in effect
on the date of purchase), reduced by (i) the amount of any payment on the note
that is not interest and (ii) the amount of any amortizable bond premium
previously amortized with regard to the note. Gain or loss recognized by a U.S.
holder on the sale or other disposition of a note that is attributable to
changes in the rate of exchange between the U.S. dollar and the Euro will be
treated as ordinary income or loss and generally will not be treated as interest
income or expense except to the extent provided by future regulations or
administrative pronouncements of the IRS. Such foreign currency gain or loss is
recognized on the sale or other disposition of a note only to the extent of
total gain or loss recognized on such sale or other disposition.

Transactions in Euros. Euros received as interest on, or on the sale or
other disposition of, a note will generally have a tax basis equal to their U.S.
dollar value at the spot rate at the time such interest is received or, as the
case may be, at the time payment is received in consideration of such sale or
other disposition. The amount of
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gain or loss recognized by a U.S. holder on a sale or other disposition of such
Euros will be equal to the difference between (i) the amount of U.S. dollars, or
the fair market value in U.S. dollars of the other currency or property received
in such sale or other disposition and (ii) the tax basis of such Euros.

A U.S. holder that purchases a note with previously owned Euros would
generally recognize gain or loss in an amount equal to the difference, if any,
between such U.S. holder's tax basis in such Euros and the U.S. dollar fair
market value of such note on the date of purchase. Generally, any such gain or
loss will be ordinary income or loss and will not be treated as interest income
or expense, except to the extent provided by future regulations or
administrative pronouncements of the IRS. However, a U.S. holder that converts
U.S. dollars to Euros and immediately uses such Euros to purchase a note
ordinarily would not recognize any exchange gain or loss in connection with such
conversion or purchase.

NON-U.S. HOLDERS

Subject to the discussion below concerning information reporting and backup
withholding, payments of interest on a new note to any non-U.S. holder will
generally not be subject to U.S. federal income tax or withholding tax, provided
that all of the following are true:

- the non-U.S. holder does not actually or constructively own 10% or more
of the total combined voting power of all of our classes of stock
entitled to vote;

- the non-U.S. holder is not a controlled foreign corporation to which we
are a related person for U.S. federal income tax purposes; and

- the non-U.S. holder certifies, on Form W8-BEN (or a permissible
substitute or successor form) under penalties of perjury, that it is a
non-U.S. holder and provides its name and address.

Interest paid to a non-U.S. holder that does not qualify for the above
exemption from withholding tax generally will be subject to withholding of U.S.
federal income tax at the rate of 30%, unless the non-U.S. holder of the new
note provides us or our paying agent, as the case may be, with a properly
executed:

(1) IRS Form W8-BEN (or successor form) claiming an exemption from (or
reduction in) withholding under the benefit of an applicable income
tax treaty; or

(2) IRS Form W8-ECI (or successor form) stating that the interest paid on
the new note is not subject to withholding tax because it is
effectively connected with the non-U.S. holder's conduct of a trade or
business in the United States. If, however, the interest is
effectively connected with the conduct of a trade or business in the
United States by the non-U.S. holder, the interest will be subject to
U.S. federal income tax imposed on net income on the same basis as
that applies to U.S. persons generally, and, for corporate holders and
under certain circumstances, also the branch profits tax.

Non-U.S. holders should consult any applicable income tax treaties, which
may provide for exemption from (or reduction in) U.S. withholding and for other
rules different from those described above.

Sale or Other Disposition of New Notes. Subject to the discussion below
concerning information reporting and backup withholding, any gain realized by a
non-U.S. holder on the sale or other disposition of a new note generally will
not be subject to a U.S. federal income tax, unless (i) such gain is effectively
connected with the conduct by such non-U.S. holder of a trade or business within
the United States, (ii) the non-U.S. holder is an individual who is present in
the United States for 183 days or more in the taxable year of the disposition
and certain other conditions are satisfied, or (iii) the non-U.S. holder is
subject to tax pursuant to the provisions of U.S. tax law applicable to certain
U.S. expatriates.

Gain that is effectively connected with the conduct of a trade or business
in the United States by a non-U.S. holder will be subject to the U.S. federal
income tax imposed on net income on the same basis that applies to U.S. persons
generally and, for corporate holders and under certain circumstances, also the
branch profits tax, but will generally not be subject to withholding. Non-U.S.
holders should consult any applicable income tax treaties that may provide for
different rules.

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INFORMATION REPORTING AND BACKUP WITHHOLDING

Generally, we must report annually to the IRS and to each holder the amount
of interest that we paid to that holder, and the amount of tax, if any, that we
withheld on the interest. This information may also be made available to the tax
authorities of a country in which a non-U.S. holder resides.

Under current U.S. Treasury Regulations, backup withholding at the rate of
31% will generally apply to payments to persons that fail to furnish certain
required information. Backup withholding generally will not apply to payments
made in respect of new notes held by a non-U.S. holder, if the holder properly
certifies as to its non-U.S. status under penalties of perjury or otherwise
establishes an exemption. Generally, a non-U.S. holder will provide this
information on IRS Form W8-BEN.

The payment of the proceeds from the disposition of new notes to or through
the U.S. office of any broker, U.S. or foreign, will be subject to information
reporting (and possible backup withholding unless the owner certifies as to its
non-U.S. status under penalty of perjury or otherwise establishes an exemption).
In the case of the payment of proceeds from the disposition of new notes to or
through a non-U.S. office of a U.S. broker, or foreign brokers with certain
types of relationships to the United States, information reporting, but not
backup withholding, will be required on the payment, unless the broker has
documentary evidence in its files that the owner is a non-U.S. holder and
certain other conditions are met, or the holder otherwise establishes an
exemption.

Backup withholding is not an additional tax. Any amounts we withhold under
the backup withholding rules will be allowed as a refund or a credit against
such non-U.S. holder's federal income tax liability, provided that the requisite
procedures are followed and certain information is provided to the IRS.

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PLAN OF DISTRIBUTION

If you are a broker-dealer and hold old notes for your own account as a
result of market-making activities or other trading activities and you receive
new notes in exchange for old notes in the exchange offer, you may be a
statutory underwriter and must acknowledge that you will deliver a prospectus in
connection with any resale of such new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes where
such old notes were acquired as a result of market-making activities or other
trading activities. We acknowledge and, unless you are a broker-dealer, you must
acknowledge that you are not engaged in, do not intend to engage in, and have no
arrangement of understanding with any person to participate in a distribution of
new notes. We have agreed that starting on the expiration date of the exchange
offer and ending on the close of business on the 180th day following the
expiration date of the exchange offer, we will make this prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale.

We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new notes or a combination of those methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any resale of that kind may
be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such new notes. Any broker-dealer
that resells new notes that were received by it for its own account pursuant to
the exchange offer and any broker or dealer that participates in a distribution
of such new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of new notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

For a period of 180 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests those documents in the letter of
transmittal.

We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the notes) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the notes, including any broker-dealers, against various liabilities,
including liabilities under the Securities Act.

LEGAL MATTERS

The validity of the issuance of the new notes offered by this prospectus
will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, London,
England.

EXPERTS

The consolidated financial statements of NTL Communications Corp. at
December 31, 2000 and 1999, and for each of the three years in the period ended
December 31, 2000, appearing in this prospectus and registration statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.

The consolidated financial statements of ntl (CWC Holdings) as of December
31, 2000 and for the seven months then ended, appearing in this prospectus and
registration statement have been audited by Ernst & Young, independent auditors,
as set forth in their report thereon appearing elsewhere herein, and are
included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.

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130

The combined financial statements of ConsumerCo as of March 31, 1999 and
2000 and for the three years ended March 31, 2000 included in this prospectus
and registration statement have been audited by Arthur Andersen, Chartered
Accountants, as indicated in their report thereon appearing elsewhere herein and
are included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.

ENFORCEABILITY OF CIVIL LIABILITIES

A substantial majority of our assets are located outside the United States.
As a result, it may not be possible for you to realize in the United States upon
judgments of courts of the United States predicated upon the civil liability
provisions under the federal securities laws of the United States. The United
States and England do not currently have a treaty providing for the reciprocal
recognition and enforcement of judgments, other than arbitration awards, in
civil and commercial matters. Therefore, a final judgment for the payment of a
fixed debt or sum of money rendered by any United States court based on civil
liability, whether or not predicated solely upon the U.S. federal securities
laws, would not automatically be enforceable in England. In order to enforce in
England a U.S. judgment, proceedings must be initiated by way of common law
action before a court of competent jurisdiction in England. An English court
will, subject to what is said below, normally order summary judgment on the
basis that there is no defense to the claim for payment and will not
reinvestigate the merits of the original dispute. In such an action, an English
court will treat the U.S. judgment as creating a valid debt upon which the
judgment creditor could bring an action for payment, as long as

(1) the U.S. court had jurisdiction over the original proceeding,

(2) the judgment is final and conclusive on the merits,

(3) the judgment does not contravene English public policy,

(4) the judgment must not be for a tax, penalty or a judgment arrived at
by doubling, trebling or otherwise multiplying a sum assessed as
compensation for the loss or damage sustained and

(5) the judgment has not been obtained by fraud or in breach of the
principles of natural justice.

Based on the foregoing, there can be no assurance that you will be able to
enforce in England judgments in civil and commercial matters obtained in any
U.S. court. There is doubt as to whether an English court would impose civil
liability in an original action predicated solely upon the U.S. federal
securities laws brought in a court of competent jurisdiction in England.

The notes and the indenture under which the notes will be issued will be
governed exclusively by the laws of the State of New York. Under the Judiciary
Law of the State of New York, a judgment or decree in an action based upon an
obligation denominated in a currency other than U.S. dollars will be made in the
currency of the underlying obligation and converted into U.S. dollars at the
rate of exchange prevailing on the date of entry of the judgment or decree.

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131

WHERE YOU CAN FIND MORE INFORMATION ABOUT US

We are currently subject to the informational requirements of the
Securities Exchange Act of 1934. We file reports, proxy statements, information
statements and other information with the Commission under the Exchange Act. You
can inspect and copy at prescribed rates any reports, proxy statements,
information statements and other information we file with the Commission at the
public reference facilities the Commission maintains at:

Room 1024, Judiciary Plaza,
450 Fifth Street, N.W.,
Washington, D.C. 20549,

and at the Commission's Regional Offices located at:

Suite 1400, Northwestern Atrium Center,
500 West Madison Street,
Chicago, Illinois 60661

and

13th Floor, Seven World Trade Center,
New York, New York 10048,

and you may also obtain copies of that material by mail from the Public
Reference Room of the Commission at:

450 Fifth Street, N.W.,
Washington, D.C. 20549,

You may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Commission also maintains a site
on the world wide web, the address of which is http://www.sec.gov. That site
also contains our reports, proxy and information statements and other
information.

We are incorporating by reference some information about us that we file
with the Commission. We are disclosing important information to you by
referencing those filed documents. Any information that we reference this way is
considered part of this prospectus.

The following documents filed by us with the Commission are incorporated by
reference into this prospectus:

(a) NTL Communications' Annual Report on Form 10-K for the year ended
December 31, 2000, dated March 30, 2001;

(b) NTL Communications' Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001, dated May 14, 2001, (as amended by Form
10-Q/A-1, dated May 21, 2001); and

(c) NTL Communications' Current Reports on Form 8-K dated January 16,
2001 (filed on January 16, 2001), January 19, 2001 (filed on January
19, 2001), February 5, 2001 (filed on February 7, 2001), February 21,
2001 (filed on March 7, 2001), as amended by Form 8-K/A, dated May 4,
2001 (filed on May 7, 2001), May 8, 2001 (filed on May 8, 2001), May
10, 2001 (filed on May 10, 2001) and May 24, 2001 (filed on May 24,
2001).

We will provide you without charge on your request, a copy of any or all
documents which are incorporated by reference to this offering memorandum,
except for exhibits which are specifically incorporated by reference into those
documents. You should make your request in writing or by telephone to:

NTL Communications Corp.
110 East 59th Street
26th Floor
New York NY 10022
Attention: Richard J. Lubasch
Tel: (212) 906-8440

Copies of these documents will be available without charge (if and so long
as any Notes are issued on the Luxembourg Stock Exchange) at the specified
office of the listing agent in Luxembourg.

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132

GENERAL INFORMATION

LISTING

A notice relating to the issue of the notes and the certificate of
incorporation of our company will be filed with the Chief Registrar of the
District Court of Luxembourg (Greffier en Chef du Tribunal d'Arrondissement de
et a Luxembourg) where such documents are available for inspection and where
copies of such documents will be obtainable upon request. According to Chapter
VI, Article 3, point A/II/2 of the Rules and Regulations of the Luxembourg Stock
Exchange, the notes shall be freely transferable and therefore, no transaction
made on the Luxembourg Stock Exchange shall be cancelled.

CLEARING SYSTEMS

The International Securities Identification Number for the Global Notes is
US62940NAP78. The CUSIP number for the Global Notes is 62940NAP7.

AUTHORIZATION

The issuance of the new notes was authorized by resolutions of the finance
committee of the board of directors of NTL on January 17, 2001 and February 2,
2001.

AVAILABLE DOCUMENTS, FINANCIAL REPORTS AND INFORMATION

Copies of the indenture and the registration rights agreements referred to
herein will, if and so long as the notes are listed on the Luxembourg Stock
Exchange, be available for inspection during normal business hours at the
specified office of the listing agent in Luxembourg.

A copy of the Certificate of Incorporation and By-laws of NTL will be
available for inspection during normal business hours at the specified office of
the listing agent in Luxembourg if and so long as the notes are issued on the
Luxembourg Stock Exchange.

Whether or not required by the rules and regulations of the SEC, so long as
the notes are outstanding, NTL will file with the SEC and furnish to holders of
notes all quarterly and annual financial information required to be contained in
a filing with the SEC on Forms 10-Q and 10-K (or the equivalent thereof under
the Exchange Act for foreign private issuers in the event NTL becomes a
corporation organized under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands), including a "Management's
Discussion and Analysis of Results of Operations and Financial Condition" and,
with respect to the annual information only, a report thereon by NTL's certified
independent public accountants, in each case, as required by the rules and
regulations of the SEC as in effect on January 24, 2001.

In compliance with Forms 10-Q and 10-K, NTL currently publishes audited
annual consolidated financial reports and unaudited quarterly consolidated
financial reports. If and as long as the notes are listed on the Luxembourg
Stock Exchange, copies of such reports or any other reports NTL is required to
furnish to holders of the notes in accordance with the preceding paragraph, will
be available at the specified office of the listing agent in Luxembourg. NTL
does not publish unconsolidated financial reports.

Copies of reports, proxy statements and other information concerning NTL
filed by NTL with the SEC (including all material agreements filed as exhibits
thereto) will, if and as long as the notes are listed on the Luxembourg Stock
Exchange, be available free of charge at the specified office of the listing
agent in Luxembourg.

LEGAL PROCEEDINGS

MATERIAL ADVERSE CHANGE

Except as disclosed in this prospectus, there has been no material adverse
change in the financial position of NTL since March 31, 2001.

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133

INDEX TO FINANCIAL STATEMENTS

PAGE
-----

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
Report of Independent Auditors.............................. F-2
Consolidated Balance Sheets as of December 31, 2000 and
1999...................................................... F-3
Consolidated Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998.......................... F-4
Consolidated Statements of Shareholder's Equity for the
Years Ended December 31, 2000, 1999 and 1998.............. F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998.......................... F-6
Notes to Consolidated Financial Statements.................. F-7
Schedule I Condensed Financial Information of Registrant as
of December 31, 2000 and 1999 and for the Years Ended
December 31, 2000, 1999 and 1998.......................... F-28
Schedule II Valuation and Qualifying Accounts for the Years
Ended December 31, 2000, 1999 and 1998.................... F-35
Condensed Consolidated Balance Sheets as of March 31, 2001
and December 31, 2000..................................... F-36
Condensed Consolidated Statements of Operations for the
Three Months Ended March 31, 2001 and 2000................ F-38
Condensed Consolidated Statement of Shareholder's Equity for
the Three Months Ended March 31, 2001..................... F-39
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2001 and 2000................ F-41
Notes to Condensed Consolidated Financial Statements........ F-42
CONSUMERCO
NTL (CWC HOLDINGS)
Report of Independent Auditors.............................. F-48
Consolidated Balance Sheet as of December 31, 2000.......... F-49
Consolidated Statement of Operations for the seven months
ended December 31, 2000................................... F-50
Consolidated Statement of Shareholders' Equity for the seven
months ended December 31, 2000............................ F-51
Consolidated Statement of Cash Flows for the seven months
ended December 31, 2000................................... F-52
Notes to Consolidated Financial Statements.................. F-53
COMBINED FINANCIAL STATEMENTS
Report of Independent Auditors.............................. F-63
Combined Profit & Loss Account for the Years Ended March 31,
2000, March 31, 1999 and March 31, 1998................... F-64
Combined Balance Sheet as at March 31, 2000 and 1999........ F-65
Combined Cash Flow Statement for the Years Ended March 31,
2000, March 31, 1999 and March 31, 1998................... F-66
Reconciliation of Movements in Equity Shareholders' Funds
for the Years Ended March 31, 2000, March 31, 1999 and
March 31, 1998............................................ F-67
Notes to the Combined Financial Statements.................. F-68

F-1
134

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholder
NTL Communications Corp.

We have audited the consolidated balance sheets of NTL Communications Corp.
and Subsidiaries as of December 31, 2000 and 1999, and the related consolidated
statements of operations, shareholder's equity and cash flows for each of the
three years in the period ended December 31, 2000. Our audits also included the
financial statement schedules listed in the Index at page F-1. These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
NTL Communications Corp. and Subsidiaries at December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.

/s/ Ernst & Young LLP

New York, New York
March 2, 2001

F-2
135

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)

DECEMBER 31,
----------------------
2000 1999
--------- ---------

ASSETS
Current assets:
Cash and cash equivalents................................. $ 423.5 $ 1,074.2
Marketable securities..................................... -- 5.0
Accounts receivable -- trade, less allowance for doubtful
accounts of $135.2 (2000) and $84.9 (1999)............. 527.4 286.9
Other..................................................... 389.2 73.7
--------- ---------
Total current assets........................................ 1,340.1 1,439.8
Fixed assets, net........................................... 10,916.8 5,348.4
Intangible assets, net...................................... 10,566.1 2,648.7
Other assets, net of accumulated amortization of $81.8
(2000) and $49.1 (1999)................................... 318.6 296.1
Deferred income taxes....................................... 4.9 --
--------- ---------
Total assets................................................ $23,146.5 $ 9,733.0
========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable.......................................... $ 451.1 $ 212.7
Accrued expenses and other................................ 1,105.6 400.6
Accrued construction costs................................ 172.9 79.3
Due to affiliates......................................... 117.9 17.6
Interest payable.......................................... 127.6 69.1
Deferred revenue.......................................... 291.5 154.0
Current portion of long-term debt......................... 10.7 82.6
--------- ---------
Total current liabilities................................... 2,277.3 1,015.9
Long-term debt.............................................. 11,843.4 7,598.0
Other....................................................... 13.6 --
Commitments and contingent liabilities
Deferred income taxes....................................... -- 53.1
Shareholder's equity:
Common stock -- $.01 par value; authorized 100 shares;
issued and outstanding 12 (2000) and 100 (1999)
shares................................................. -- --
Additional paid-in capital................................ 13,746.7 3,031.3
Accumulated other comprehensive (loss) income............. (379.3) 1.8
(Deficit)................................................. (4,355.2) (1,967.1)
--------- ---------
9,012.2 1,066.0
--------- ---------
Total liabilities and shareholder's equity (deficiency)..... $23,146.5 $ 9,733.0
========= =========

See accompanying notes.
F-3
136

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS)

YEAR ENDED DECEMBER 31,
--------------------------------
2000 1999 1998
--------- -------- -------

REVENUES
Consumer telecommunications and television.................. $ 1,518.2 $ 827.3 $ 355.6
Business telecommunications................................. 702.2 452.5 157.7
Broadcast transmission and other............................ 263.8 257.3 231.3
Other telecommunications.................................... -- -- 2.4
--------- -------- -------
2,484.2 1,537.1 747.0
COSTS AND EXPENSES
Operating expenses.......................................... 1,223.2 761.5 400.9
Selling, general and administrative expenses................ 969.1 562.9 270.7
Franchise fees.............................................. -- 16.5 25.0
Other charges............................................... 92.7 16.2 (4.2)
Corporate expenses.......................................... 23.7 25.3 17.1
Depreciation and amortization............................... 1,700.7 765.7 266.1
--------- -------- -------
4,009.4 2,148.1 975.6
--------- -------- -------
Operating (loss)............................................ (1,525.2) (611.0) (228.6)
OTHER INCOME (EXPENSE)
Interest income and other, net.............................. 1.6 29.9 46.0
Interest expense............................................ (886.3) (678.2) (328.8)
Other gains................................................. -- 493.1 --
Foreign currency transaction (losses) gains................. (58.1) 22.8 4.2
--------- -------- -------
(Loss) before income taxes and extraordinary item........... (2,468.0) (743.4) (507.2)
Income tax benefit.......................................... 79.9 29.9 3.3
--------- -------- -------
(Loss) before extraordinary item............................ (2,388.1) (713.5) (503.9)
Loss from early extinguishment of debt...................... -- (3.0) (30.7)
--------- -------- -------
Net (loss).................................................. $(2,388.1) $ (716.5) $(534.6)
========= ======== =======

See accompanying notes.
F-4
137

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
(DOLLARS IN MILLIONS)

SERIES PREFERRED
STOCK COMMON STOCK ACCUMULATED
$.01 PAR VALUE $.01 PAR VALUE ADDITIONAL OTHER
---------------- ------------------- PAID-IN COMPREHENSIVE COMPREHENSIVE
SHARES PAR SHARES PAR CAPITAL LOSS INCOME (LOSS) (DEFICIT)
--------- ---- ----------- ----- ---------- ------------- ------------- ---------

BALANCE, DECEMBER 31, 1997...... 780 $-- 32,210,000 $ 0.3 $ 538.1 $ 117.0 $ (717.1)
Exercise of stock options....... 298,000 -- 6.3
Exercise of warrants............ 70,000 -- 0.5
Accreted dividends on preferred
stock......................... (18.8)
Accretion of discount on
preferred stock............... (0.3)
Conversion of 7 1/4% Convertible
Subordinated Notes............ 6,958,000 0.1 186.9
Conversion of Series Preferred
Stock......................... (780) -- 1,950,000 -- --
Preferred stock issued for an
acquisition................... 177,000 -- 178.5
Common stock issued for an
acquisition................... 18,763,000 0.2 600.3
Warrants issued in connection
with consent solicitations.... 10.1
Comprehensive income:
Net loss for the year ended
December 31, 1998........... $ (534.6) (534.6)
Currency translation
adjustment.................. (12.3) (12.3)
---------
Total....................... $ (546.9)
-------- -- ----------- ----- --------- --------- ------- ---------
BALANCE, DECEMBER 31, 1998...... 177,000 -- 60,249,000 0.6 1,501.6 104.7 (1,251.7)
Exercise of stock options....... 432,000 -- 12.1
Exercise of warrants............ 15,000 -- --
Preferred stock issued for
cash.......................... 500,000 -- 483.8
Warrants issued for cash........ 16.2
Accreted dividends on preferred
stock......................... 4,000 (8.6)
Accretion of discount on
preferred stock............... --
Conversion of 7% Convertible
Subordinated Notes............ 1,000 -- --
Common stock issued for an
acquisition................... 12,705,000 0.1 971.3
Stock options issued in
connection with an
acquisition................... 6.6
Corporate restructuring......... (681,000) -- (73,401,900) (0.7) 405.6
Distribution to NTL
Incorporated.................. (500.0)
Contributions from NTL
Incorporated.................. 173.2
Distribution of subsidiary to
NTL Incorporated.............. (30.5) 1.1
Comprehensive income:
Net loss for the year ended
December 31, 1999........... $ (716.5) (716.5)
Currency translation
adjustment.................. (102.9) (102.9)
---------
Total....................... $ (819.4)
-------- -- ----------- ----- --------- --------- ------- ---------
BALANCE, DECEMBER 31, 1999...... -- -- 100 -- 3,031.3 1.8 (1,967.1)
Contributions from NTL
(Delaware), Inc. ............. 10,715.4
Corporate restructuring......... (88)
Comprehensive loss:
Net loss for the year ended
December 31, 2000........... $(2,388.1) (2,388.1)
Currency translation
adjustment.................. (381.1) (381.1)
---------
Total....................... $(2,769.2)
-------- -- ----------- ----- --------- --------- ------- ---------
BALANCE, DECEMBER 31, 2000...... -- $-- 12 $ -- $13,746.7 $(379.3) $(4,355.2)
======== == =========== ===== ========= ========= ======= =========

See accompanying notes.
F-5
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)

YEAR ENDED DECEMBER 31,
-----------------------------------
2000 1999 1998
--------- --------- ---------

OPERATING ACTIVITIES
Net loss.................................................... $(2,388.1) $ (716.5) $ (534.6)
Adjustment to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization............................. 1,700.7 765.7 266.1
Loss from early extinguishment of debt.................... -- 3.0 30.7
Gain on sale of investment in Cable London PLC............ -- (493.1) --
Amortization of non competition agreements................ -- -- 1.4
Provision for losses on accounts receivable............... 98.5 45.7 27.3
Deferred income taxes..................................... (80.8) (30.9) (3.3)
Amortization of original issue discount................... 473.1 451.4 232.7
Other..................................................... (75.1) (8.0) (30.9)
Changes in operating assets and liabilities, net of effect
from business acquisitions:
Accounts receivable..................................... (247.9) (134.6) (70.4)
Other current assets.................................... (41.8) (34.6) 22.6
Other assets............................................ 42.4 (25.2) --
Accounts payable........................................ (102.2) 32.0 (2.6)
Accrued expenses and other.............................. 330.3 150.4 15.3
Deferred revenue........................................ 120.6 68.4 26.8
--------- --------- ---------
Net cash (used in) provided by operating activities......... (170.3) 73.7 (18.9)
INVESTING ACTIVITIES
Acquisitions, net of cash acquired.......................... (7,514.9) (637.6) (746.8)
Purchase of fixed assets.................................... (1,961.8) (1,198.3) (772.2)
Increase in other assets.................................... (33.7) (30.1) (35.6)
Proceeds from sales of assets............................... -- 692.5 1.3
Purchase of marketable securities........................... (3.3) (354.5) (540.6)
Proceeds from sales of marketable securities................ 8.3 618.6 291.3
--------- --------- ---------
Net cash (used in) investing activities..................... (9,505.4) (909.4) (1,802.6)
FINANCING ACTIVITIES
Distribution to NTL (Delaware), Inc......................... -- (500.0) --
Contributions from NTL (Delaware), Inc...................... 5,227.2 167.6 --
Proceeds from borrowings, net of financing costs............ 5,009.8 1,846.0 3,525.6
Proceeds from issuance of preferred stock and warrants...... -- 500.0 --
Principal payments.......................................... (1,263.9) (758.2) (845.0)
Cash released from (placed in) escrow for debt repayment.... 77.5 (87.0) (217.6)
Consent solicitation payments............................... -- -- (11.3)
Proceeds from exercise of stock options and warrants........ -- 12.1 6.8
--------- --------- ---------
Net cash provided by financing activities................... 9,050.6 1,180.5 2,458.5
Effect of exchange rate changes on cash..................... (25.6) (6.9) 0.4
--------- --------- ---------
(Decrease) increase in cash and cash equivalents............ (650.7) 337.9 637.4
Cash and cash equivalents at beginning of year.............. 1,074.2 736.3 98.9
--------- --------- ---------
Cash and cash equivalents at end of year.................... $ 423.5 $ 1,074.2 $ 736.3
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest exclusive of amounts
capitalized............................................... $ 363.9 $ 180.3 $ 90.5
Income taxes paid........................................... 1.5 2.4 0.3
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Contributions from NTL (Delaware), Inc...................... $ 5,488.2 $ 5.6 $ --
Accretion of dividends and discount on preferred stock...... -- 8.6 19.1
Conversion of Convertible Notes, net of unamortized Deferred
financing costs........................................... -- 269.3 187.0
Preferred stock issued for an acquisition................... -- -- 178.5
Common stock and stock options issued for an acquisition.... -- 978.0 600.5
Warrants issued in connection with consent solicitations.... -- -- 10.1

See accompanying notes.
F-6
139

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE RESTRUCTURING AND BUSINESS

On April 1, 1999, NTL Incorporated completed a corporate restructuring to
create a holding company structure. The holding company restructuring was
accomplished through a merger so that all the stockholders of NTL Incorporated
at the effective time of the merger became stockholders of the new holding
company, and NTL Incorporated became a subsidiary of the new holding company.
The new holding company took the name NTL Incorporated and the holding company's
subsidiary simultaneously changed its name to NTL Communications Corp. The
"Company" refers to NTL Incorporated and subsidiaries up to and including March
31, 1999, and to NTL Communications Corp. and subsidiaries beginning April 1,
1999. In addition, in April 1999, the Company distributed $500 million to NTL
Incorporated, principally to finance the acquisition of the Australian National
Transmission Network.

On May 18, 2000, NTL Incorporated completed a second corporate
restructuring to create a holding company structure in connection with the
acquisition of certain assets of Cable & Wireless Communications plc ("CWC").
The holding company restructuring was accomplished through a merger so that all
the stockholders of NTL Incorporated at the effective time of the merger became
stockholders of the new holding company, and NTL Incorporated became a
subsidiary of the new holding company. The new holding company has taken the
name NTL Incorporated and the holding company's subsidiary simultaneously
changed its name to NTL (Delaware), Inc. ("NTL Delaware"). The Company is a
wholly-owned subsidiary of NTL Delaware.

On February 21, 2001, the Company completed a transaction whereby it
acquired the entire issued share capital of NTL (CWC Holdings) Limited (the
entity that owns ConsumerCo) from NTL Incorporated and the entire issued share
capital of NTL Business Limited (formerly Workplace Technologies plc) from NTL
(Delaware), Inc. in exchange for shares of its common stock. As a result of this
transaction, ConsumerCo and NTL Business Limited became wholly-owned
subsidiaries of the Company. The Company accounted for the transaction in a
manner consistent with a transfer of entities under common control, which is
similar to a "pooling of interests." Accordingly, the net assets and results of
operations of ConsumerCo and NTL Business Limited have been included in the
Company's consolidated financial statements from their original dates of
acquisition, May 30, 2000 and September 20, 1999, respectively.

Revenues and net loss for the individual companies reported prior to the
acquisition were as follows:

YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999
------------ ------------
(IN MILLIONS)

Revenues:
NTL Communications............................... $ 1,765.4 $1,477.9
NTL Business..................................... 124.6 59.2
NTL (CWC Holdings)............................... 594.2 --
--------- --------
Combined......................................... $ 2,484.2 $1,537.1
========= ========
Net Loss
NTL Communications............................... $(1,524.1) $ (715.0)
NTL Business..................................... (41.1) (1.5)
NTL (CWC Holdings)............................... (822.9) --
--------- --------
Combined......................................... $(2,388.1) $ (716.5)
========= ========

The Company, through its subsidiaries, owns and operates broadband
communications networks for telephone, cable television and Internet services in
the United Kingdom and Ireland, and transmission networks for television and
radio broadcasting in the United Kingdom. Based on revenues and identifiable
assets, the Company's predominant lines of business are consumer services,
business services and broadcast transmission

F-7
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and related services in the United Kingdom. Consumer services include telephony,
cable television, Internet access and interactive services. Business services
include telephony, national and international wholesale carrier
telecommunications, and radio communications services for the emergency services
community. Broadcast transmission and related services include digital and
analog television and radio broadcasting, rental of antenna space on the
Company's owned and leased towers and sites and associated services, and
satellite and media services.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Principles of Consolidation

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

Reclassification

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

Foreign Currency Translation

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

Cash Equivalents

Cash equivalents are short-term highly liquid investments purchased with a
maturity of three months or less. Cash equivalents were $211.3 million and
$605.3 million at December 31, 2000 and 1999, respectively, which consisted
primarily of U.S. Treasury bills (2000 only), bank time deposits and corporate
commercial paper. At December 31, 2000 and 1999, $57.2 million and $574.8
million, respectively, of the cash equivalents were denominated in foreign
currencies.

Marketable Securities

Marketable securities were classified as available-for-sale, which are
carried at fair value. Unrealized holding gains and losses on securities, net of
tax, are carried as a component of accumulated other comprehensive income
(loss). The amortized cost of debt securities is adjusted for amortization of
premiums and accretion of discounts to maturity. Such amortization is included
in interest income. Realized gains and losses and declines in value judged to be
other than temporary will be included in interest income. The cost of securities
sold or matured is based on the specific identification method. Interest on
securities is included in interest income.

F-8
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Marketable securities at December 31, 1999 consisted of corporate
commercial paper. During the years ended December 31, 2000, 1999 and 1998, there
were no realized gains or losses on sales of securities. All of the marketable
securities as of December 31, 1999 had a contractual maturity of less than one
year.

Fixed Assets

Fixed assets are stated at cost, which includes amounts capitalized for
labor and overhead expended in connection with the design and installation of
operating equipment. Depreciation is computed by the straight-line method over
the estimated useful lives of the assets. Estimated useful lives are as follows:
operating equipment -- 5 to 40 years and other equipment -- 3 to 40 years.

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

Intangible Assets

Intangible assets include goodwill, license acquisition costs and customer
lists. Goodwill is the excess of the purchase price over the fair value of net
assets acquired in business combinations accounted for as purchases. Goodwill is
amortized on a straight-line basis over the periods benefited of 10, 15 or 30
years. License acquisition costs represent the portion of purchase price
allocated to the cable television and telecommunications licenses acquired in
business combinations. License acquisition costs are amortized on a
straight-line basis over the remaining lives of the licenses at acquisition,
which vary from approximately two years to 23 years. Customer lists represent
the portion of the purchase price allocated to the value of the customer base.
Customer lists are amortized on a straight-line basis over 5 years. The Company
continually reviews the recoverability of the carrying value of these assets
using the same methodology that it uses for the evaluation of its other
long-lived assets.

Equity Method Investments

All investments in which the Company has the ability to exercise
significant influence over the investee, but less than a controlling voting
interest, are accounted for using the equity method. The investment in Cable
London PLC was accounted for under the equity method. Equity method investments
are recorded at original cost and adjusted periodically to recognize the
Company's proportionate share of the investees' net income or losses after the
date of investment, additional contributions made and dividends received. The
difference between the Company's recorded investment and its proportionate
interest in the book value of the investees' net assets are being amortized on a
straight-line basis over 10 years.

Deferred Financing Costs

Deferred financing costs are incurred in connection with the issuance of
debt and are amortized over the term of the related debt.

Capitalized Interest

Interest is capitalized as a component of the cost of fixed assets
constructed. In 2000, 1999 and 1998, interest of $95.1 million, $41.8 million
and $27.8 million, respectively, was capitalized.

Revenue Recognition

Revenues are recognized at the time the service is rendered to the customer
or the performance of the service has been completed. Charges for services that
are billed in advance are deferred and recognized when earned.
F-9
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Rental revenues are recognized when earned on a monthly basis. Installation and
maintenance service revenues are recognized when the performance of the service
has been completed.

Cable Television System Costs, Expenses and Revenues

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

Advertising Expense

The Company charges the cost of advertising to expense as incurred.
Advertising costs were $94.0 million, $35.8 million and $34.0 million in 2000,
1999 and 1998, respectively.

Stock-Based Compensation

The Company adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." The Company applied APB Opinion No.
25, "Accounting for Stock Issued to Employees" and related interpretations in
accounting for the stock option plans in which it participates.

Derivative Financial Instruments

The Company uses financial instruments to hedge a portion, but not all, of
its exposure from movements in the British pound/U.S. dollar exchange rate.
Gains and losses on these instruments are deferred and recognized in the
statement of operations when the related hedged transactions are recognized. To
date, premiums paid for these contracts have not been material. The Company does
not use derivative financial instruments for trading or speculative purposes

3. RECENT ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as amended by SFAS Nos. 137
and 138. The new accounting standard requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in the results of operations or in other
comprehensive income (loss), depending on whether a derivative is designated as
a fair value or cash flow hedge. The ineffective portion of all hedges will be
recognized in the results of operations.

4. CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

Need for Additional Financing

The Company will require additional financing in the future. There can be
no assurance that the required financing will be obtainable on acceptable terms.

F-10
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Concentrations

The Company's broadcast transmission and related services business is
substantially dependent upon contracts with a small group of companies for the
right to broadcast their programming, and upon a site sharing agreement for a
large number of its transmission sites. The loss of any one of these contracts
or the site sharing agreement could have a material adverse effect on the
business of the Company.

Currency Risk

To the extent that the Company obtains financing in U.S. dollars and incurs
construction and operating costs in various other currencies, it will encounter
currency exchange rate risks. In addition, the Company's revenues are generated
in foreign currencies while its interest and principal obligations with respect
to most of the Company's existing indebtedness are payable in U.S. dollars.

5. FIXED ASSETS

Fixed assets consist of:

DECEMBER 31,
---------------------
2000 1999
--------- --------
(IN MILLIONS)

Operating equipment.................................... $10,004.9 $4,859.0
Other equipment........................................ 1,079.8 704.3
Construction-in-progress............................... 1,509.7 668.7
--------- --------
12,594.4 6,232.0
Accumulated depreciation............................... (1,677.6) (883.6)
--------- --------
$10,916.8 $5,348.4
========= ========

Depreciation expense for the years ended December 31, 2000, 1999 and 1998
was $874.4 million, $475.5 million and $207.5 million, respectively.

6. INTANGIBLE ASSETS

Intangible assets consist of:

DECEMBER 31,
---------------------
2000 1999
--------- --------
(IN MILLIONS)

Goodwill, net of accumulated amortization of $837.3
(2000) and $185.9 (1999)............................. $10,236.4 $2,264.4
License acquisition costs, net of accumulated
amortization of $215.8 (2000) and $141.7 (1999)...... 139.2 225.0
Customer lists, net of accumulated amortization of
$70.4 (2000) and $30.9 (1999)........................ 158.6 159.3
Other intangibles, net of accumulated amortization of
$5.5 (2000).......................................... 31.9 --
--------- --------
$10,566.1 $2,648.7
========= ========

The Company made the following acquisitions in 1999:

In March 1999, the Company acquired Diamond Cable Communications plc
("Diamond"). The Company issued an aggregate of 19.9 million shares of common
stock in exchange for each ordinary share and deferred

F-11
144
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

share of Diamond. The Company's common stock was valued at $971.4 million, the
fair value at the time of the announcement. In addition, the Company issued
options to purchase 191,000 shares of the Company's common stock to holders of
Diamond options, which were valued at $6.6 million. The Company assumed
Diamond's debt including five different notes with an aggregate principal amount
at maturity of $1,564.6 million. Diamond is a provider of telephone, cable
television and Internet services in England.

In July 1999, the Company acquired Cablelink Limited ("Cablelink") for
IRL535.2 million ($692.5 million), of which IRL455.2 million ($589.0 million)
was paid in cash and IRL80.0 million ($103.5 million) was paid through the
issuance of Variable Rate Redeemable Guaranteed Loan Notes due 2002. Cablelink
provides multi-channel television and information services in Dublin, Galway and
Waterford, Ireland.

In September 1999, NTL Delaware acquired the shares of Workplace
Technologies plc, one of the United Kingdom's leading data network service
integrators, in exchange for L105.2 million ($172.5 million), of which L100.7
million ($165.1 million) was paid in cash and L4.5 million ($7.4 million) was
paid through the issuance of demand notes. On February 21, 2001, the Company
completed a transaction whereby it acquired the entire issued share capital of
NTL Business Limited (formerly Workplace Technologies plc) from NTL (Delaware),
Inc. in exchange for shares of its common stock. As a result of this
transaction, NTL Business Limited became a wholly-owned subsidiary of the
Company. The Company accounted for the transaction in a manner consistent with a
transfer of entities under common control, which is similar to a "pooling of
interests." Accordingly, the net assets and results of operations of NTL
Business Limited have been included in the Company's consolidated financial
statements from the date of acquisition by NTL Delaware.

These acquisitions were accounted for as purchases, and accordingly, the
net assets and results of operations of the acquired businesses have been
included in the consolidated financial statements from the dates of acquisition.
The aggregate purchase price of $1,860.1 million, including costs incurred of
$17.1 million, plus the fair value of liabilities assumed net of tangible assets
acquired aggregated $2,169.5 million, which has been allocated as follows:
$143.5 million to license acquisition costs, $130.9 million to customer lists
and $1,895.1 million to goodwill.

On May 30, 2000, NTL Incorporated acquired the consumer cable telephone,
Internet and television operations of CWC in the United Kingdom ("ConsumerCo").
NTL Incorporated paid cash of L2,917.0 million ($4,364.7 million) and issued an
aggregate of 84.9 million shares of its common stock in exchange for all of the
shares of CWC. In addition, NTL Incorporated paid L2,155.3 million ($3,225.0
million) to repay a portion of ConsumerCo's debt. NTL Incorporated's common
stock was valued at $5,488.3 million, the fair value at the time of the
announcement. This acquisition was funded by a new bank facility under which
L2,376.0 million ($3,555.2 million) was borrowed and by an additional investment
by France Telecom in NTL Incorporated. On February 21, 2001, the Company
completed a transaction whereby it acquired the entire issued share capital of
NTL (CWC Holdings) Limited (the entity that owns ConsumerCo) from NTL
Incorporated in exchange for shares of its common stock. As a result of this
transaction, ConsumerCo became a wholly-owned subsidiary of the Company. The
Company accounted for the transaction in a manner consistent with a transfer of
entities under common control, which is similar to a "pooling of interests."
Accordingly, the net assets and results of operations of ConsumerCo have been
included in the Company's consolidated financial statements from the date of
acquisition by NTL Incorporated.

The aggregate purchase price of $13,111.0 million, including costs incurred
of $33.1 million, exceeded the fair value of net tangible assets acquired by
$8,879.0 million, which has been allocated as follows: $53.0 million to customer
lists, $37.4 million to other intangibles and $8,788.6 million to goodwill.

The pro forma unaudited consolidated results of operations for the years
ended December 31, 2000 and 1999 assuming consummation of the above mentioned
transactions as of January 1, 1999 is as follows. A significant component of the
pro forma results is associated with the acquisition of ConsumerCo. The
historical results of ConsumerCo reflect certain intercompany costs and expenses
as they were prior to the separation of ConsumerCo

F-12
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

which was completed in the second quarter of 2000. These costs and expenses do
not necessarily reflect the costs and expenses that would have been incurred had
ConsumerCo reported as a separate entity for these periods. Therefore the
historical results of ConsumerCo which are included in the pro forma results
below are not reflective of results on a going forward basis.

YEAR ENDED DECEMBER 31,
------------------------
2000 1999
---------- ----------
(IN MILLIONS)

Total revenue........................................... $2,953.4 $2,844.5
(Loss) before extraordinary item........................ (2,973.5) (2,326.0)
Net (loss).............................................. (2,973.5) (2,329.0)

Amortization of intangibles and other assets charged to expense for the
years ended December 31, 2000, 1999 and 1998 was $826.3 million, $290.2 million
and $58.6 million respectively.

7. INVESTMENT IN CABLE LONDON PLC

NTL (Triangle) LLC ("NTL Triangle") (formerly known as NTL (Bermuda)
Limited), a wholly-owned subsidiary of the Company, owned a 50% interest in
Cable London plc ("Cable London"). Pursuant to an agreement with Telewest
Communications plc ("Telewest") relating to NTL Triangle's and Telewest's
respective 50% ownership interests in Cable London, in November 1999 Telewest
purchased all of NTL Triangle's shares of Cable London for L428.0 million
($692.5 million) in cash. The Company recorded a gain of $493.1 million on the
sale. The sale of the Cable London interest was an "Asset Sale" for purposes of
the Company's Indentures for certain of its notes. The Company used an amount
equal to the proceeds from the sale to invest in "Replacement Assets" by
November 2000.

F-13
146
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. LONG-TERM DEBT

Long-term debt consists of:

DECEMBER 31,
---------------------
2000 1999
--------- --------
(IN MILLIONS)

NTL Communications:
12 3/4% Senior Deferred Coupon Notes...................... (a) $ 277.8 $ 268.1
11 1/2% Senior Deferred Coupon Notes...................... (b) 1,040.5 930.4
10% Senior Notes.......................................... (c) 400.0 400.0
9 1/2% Senior Sterling Notes, less unamortized discount... (d) 186.5 201.4
10 3/4% Senior Deferred Coupon Sterling Notes............. (e) 353.6 343.7
9 3/4% Senior Deferred Coupon Notes....................... (f) 1,048.5 952.8
9 3/4% Senior Deferred Coupon Sterling Notes.............. (g) 360.8 354.4
11 1/2% Senior Notes...................................... (h) 625.0 625.0
12 3/8% Senior Deferred Coupon Notes...................... (i) 323.6 287.0
7% Convertible Subordinated Notes......................... (j) 599.3 599.3
Variable Rate Redeemable Guaranteed Loan Notes............ (k) -- 76.8
9 1/4% Senior Euro Notes.................................. (l) 234.7 252.3
9 7/8% Senior Euro Notes.................................. (m) 328.6 353.2
11 1/2% Senior Deferred Coupon Euro Notes................. (n) 127.9 123.1
11 7/8% Senior Notes, less unamortized discount........... (o) 489.6 --
NTL Communications Limited:
Credit Agreement.......................................... (v) 375.3 --
NTL Business:
Credit Agreement.......................................... (v) 3,030.3 --
ConsumerCo:
Term Loan Facility and Other.............................. 21.7 --
NTL Triangle:
11.2% Senior Discount Debentures.......................... (p) 517.3 467.3
Other..................................................... 5.2 8.0
Diamond:
13 1/4% Senior Discount Notes............................. (q) 285.1 285.1
11 3/4% Senior Discount Notes............................. (r) 531.0 476.2
10 3/4% Senior Discount Notes............................. (s) 373.9 336.9
10% Senior Sterling Notes................................. (t) 201.9 218.1
9 1/8% Senior Notes....................................... (u) 110.0 110.0
Other..................................................... 6.0 11.5
--------- --------
11,854.1 7,680.6
Less current portion........................................ 10.7 82.6
--------- --------
$11,843.4 $7,598.0
========= ========

- ---------------
(a) 12 3/4% Notes due April 15, 2005, principal amount at maturity of $277.8
million, interest payable semiannually from October 15, 2000, redeemable at
the Company's option on or after April 15, 2000;

F-14
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(b) 11 1/2% Notes due February 1, 2006, principal amount at maturity of
$1,050.0 million, interest payable semiannually beginning on August 1,
2001, redeemable at the Company's option on or after February 1, 2001;

(c) 10% Notes due February 15, 2007, principal amount at maturity of $400.0
million, interest payable semiannually from August 15, 1997, redeemable at
the Company's option on or after February 15, 2002;

(d) 9 1/2% Sterling Notes due April 1, 2008, principal amount at maturity of
L125.0 million ($186.9 million), interest payable semiannually from October
1, 1998, redeemable at the Company's option on or after April 1, 2003;

(e) 10 3/4% Sterling Notes due April 1, 2008, principal amount at maturity of
L300.0 million ($448.7 million), interest payable semiannually beginning on
October 1, 2003, redeemable at the Company's option on or after April 1,
2003;

(f) 9 3/4% Notes due April 1, 2008, principal amount at maturity of $1,300.0
million, interest payable semiannually beginning on October 1, 2003,
redeemable at the Company's option on or after April 1, 2003;

(g) 9 3/4% Sterling Notes due April 15, 2009, principal amount at maturity of
L330.0 million ($493.5 million), interest payable semiannually beginning on
October 15, 2004, redeemable at the Company's option on or after April 15,
2004;

(h) 11 1/2% Notes due October 1, 2008, principal amount at maturity of $625.0
million, interest payable semiannually from April 1, 1999, redeemable at
the Company's option on or after October 1, 2003;

(i) 12 3/8% Notes due October 1, 2008, principal amount at maturity of $450.0
million, interest payable semiannually beginning on April 1, 2004,
redeemable at the Company's option on or after October 1, 2003;

(j) 7% Convertible Notes due December 15, 2008, principal amount at maturity of
$599.3 million, interest payable semiannually from June 15, 1999,
convertible into shares of NTL Incorporated common stock at a conversion
price of $39.20 per share, redeemable at the Company's option on or after
December 15, 2001 (there are approximately 15.3 million shares of NTL
Incorporated common stock reserved for issuance upon conversion);

(k) Variable Rate Redeemable Guaranteed Notes due January 5, 2002, principal
amount at maturity of IRL60.0 million after redemption of IRL20.0 million
($25.7 million) in 1999 using cash held in escrow, remainder redeemed in
March 2000 ($73.7 million) using cash held in escrow;

(l) 9 1/4% Euro Notes due November 15, 2006, principal amount at maturity of
E250.0 million, ($234.7 million), interest payable semiannually from May
15, 2000;

(m) 9 7/8% Euro Notes due November 15, 2009, principal amount at maturity of
E350.0 million, ($328.6 million), interest payable semiannually from on May
15, 2000 redeemable at the Company's option on or after November 15, 2004;

(n) 11 1/2% Deferred Euro Notes due November 15, 2009, principal amount at
maturity of E210.0 million ($197.1 million), interest payable semiannually
beginning on May 15, 2005, redeemable at the Company's option on or after
November 15, 2004;

(o) 11 7/8% Notes due October 1, 2010, issued in October 2000, principal amount
at maturity of $500.0 million, interest payable semiannually beginning on
April 1, 2001, redeemable at the Company's option on or after October 1,
2005;

(p) 11.2% Debentures due November 15, 2007, principal amount at maturity of
$517.3 million, interest payable semiannually beginning on May 15, 2001,
redeemable at NTL Triangle's option after November 15, 2000;

F-15
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(q) 13 1/4% Notes due September 30, 2004, principal amount at maturity of
$285.1 million, interest payable semiannually from March 31, 2000,
redeemable at Diamond's option on or after September 30, 1999;

(r) 11 3/4% Notes due December 15, 2005, principal amount at maturity of $531.0
million, interest payable semiannually beginning on June 15, 2001,
redeemable at Diamond's option on or after December 15, 2000;

(s) 10 3/4% Notes due February 15, 2007, principal amount at maturity of $420.5
million, interest payable semiannually beginning on August 15, 2002,
redeemable at Diamond's option on or after December 15, 2002;

(t) 10% Sterling Notes due February 1, 2008, issued by Diamond Holdings plc,
principal amount at maturity of L135.0 million ($201.9 million), interest
payable semiannually from August 1, 1998, redeemable at Diamond's option on
or after February 1, 2003; and

(u) 9 1/8% Notes due February 1, 2008, issued by Diamond Holdings plc,
principal amount of $110.0 million, interest payable semiannually from
August 1, 1998, redeemable at Diamond's option on or after February 1,
2003.

The indentures governing the notes contain restrictions relating to, among
other things: (i) incurrence of additional indebtedness and issuance of
preferred stock, (ii) dividend and other payment restrictions and (iii) mergers,
consolidations and sales of assets.

During 2000, 1999 and 1998, the Company recognized $473.1 million, $451.4
million and $232.7 million, respectively, of original issue discount as interest
expense.

In addition to the notes described above, a subsidiary of the Company has
the following bank credit agreements outstanding:

(v) In May 2000, NTL Communications Limited ("NTLCL") and NTL Business Limited
("NTL Business"), wholly-owned indirect subsidiaries of the Company,
entered into a L2,500.0 million ($3,738.8 million) credit agreement in
connection with the ConsumerCo acquisition. As of December 31, 2000, NTLCL
had L250.9 million ($375.3 million) and NTL Business had L2,026.3 million
($3,030.3 million) outstanding under the credit agreement. Interest is
payable at least every six months at LIBOR plus a margin rate of 2.25% per
annum, which is subject to adjustment based on the ratio of EBITDA to
finance charges of the UK Group. The effective rate of interest at December
31, 2000 was 8.283%. The unused portion of the commitment is available for
refinancing ConsumerCo indebtedness and for working capital requirements of
the UK Group. For purposes of this credit agreement, Diamond and
subsidiaries and NTL Triangle and subsidiaries and certain other entities
are excluded from the UK Group. 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. Principal is due in six
quarterly installments beginning on June 30, 2004. The credit agreement
contains various financial and other covenants with respect to the UK
Group, and restrictions on dividends and distributions by the UK Group.

NTLCL entered into a L1,300.0 million ($1,944.2 million) credit agreement
with a group of banks dated May 30, 2000. Pursuant to the credit agreement,
in connection with the issuance in October 2000 of $500.0 million aggregate
principal amount of the Company's 11 7/8% notes, the issuance in January
2001 of E200.0 million aggregate principal amount of the Company's 12 3/8%
Euro notes and the issuance in February 2001 of E100.0 million aggregate
principal amount of the Company's 12 3/8% Euro notes, the commitment was
reduced by L255.1 million ($381.4 million). As of December 31, 2000, there
were no amounts borrowed under this agreement. NTLCL and other members of
the UK Group (as defined above) may utilize the proceeds under this credit
agreement to finance the working capital requirements of the UK Group,
provided that in no event shall the proceeds be used for a purpose other
than to finance the construction, capital expenditure and working capital
needs of a cable television or telephone or telecommunications business, or
a related business, in the United Kingdom or Ireland. Interest is payable
at least every six months at LIBOR
F-16
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

plus a margin rate of 4.5% per annum. The margin rate shall increase by
0.5% on the three month anniversary of the initial advance and by an
additional 0.5% on each subsequent three month anniversary, up to a maximum
total interest rate of 16% per annum. The unused portion of the commitment
is subject to a commitment fee of 0.75% payable quarterly. Principal is due
in full on March 31, 2006. The credit agreement contains various financial
and other covenants with respect to the UK Group, and restrictions on
dividends and distributions by the UK Group.

In September 1999, NTL Triangle repaid at maturity the $21.5 million due
under its notes payable to Comcast U.K. Holdings, Inc.

In connection with the Cablelink acquisition, the Company issued $704.6
million principal amount Senior Increasing Rate Notes due 2000. In November
1999, the Company received net proceeds of $720.7 from the issuance of the
9 1/4% Euro Notes, the 9 7/8% Euro Notes and the 11 1/2% Deferred Euro Notes, of
which $716.5 million was used to repay the Senior Increasing Rate Notes plus
accrued interest. The Company recorded an extraordinary loss from the early
extinguishment of the notes of $3.0 million in 1999.

In connection with an acquisition, the Company borrowed an aggregate of
L475.0 million under a bank credit facility. In November 1998, the Company
received net proceeds of $849.0 million from the issuance of the 11 1/2% Notes
and the 12 3/8% Notes, a substantial portion of which was used to repay the
$799.0 million outstanding under the bank loan. The Company recorded an
extraordinary loss from the early extinguishment of the bank loan of $18.6
million in 1998.

In October 1998, the Company redeemed its 10 7/8% Senior Deferred Coupon
Notes with an accreted value of $211.0 million for cash of $218.0 million. The
Company recorded an extraordinary loss from the early extinguishment of the
10 7/8% Notes of $12.1 million in 1998, which included approximately $4.8
million of unamortized deferred financing costs.

In 1998, the Company required consents from the holders of some of its
notes to modify certain indenture provisions in order to proceed with an
acquisition. In October 1998, the Company paid $11.3 million in consent payments
and issued warrants to purchase 1.2 million shares of common stock in lieu of
additional consent payments of $10.1 million.

The NTLCL bank credit facilities, as well as the NTL Triangle and Diamond
notes, restrict the payment of cash dividends and loans to the Company. At
December 31, 2000, restricted net assets were approximately $12,674.0 million.

Long-term debt repayments are due as follows (in millions):

Year ending December 31:
2001............................................ $ 10.7
2002............................................ 8.7
2003............................................ 8.3
2004............................................ 420.7
2005............................................ 4,080.7
Thereafter...................................... 8,066.8
---------
$12,595.9
=========

In January and February 2001, the Company issued E300.0 million ($281.6
million) aggregate principal amount of 12 3/8% Senior Euro Notes due February 1,
2008. The Company received proceeds of approximately $275.3 million after
underwriters' discount and commissions and other fees. Interest is payable
semiannually in cash at a rate of 12 3/8% per annum beginning on August 1, 2001.
These notes may not be redeemed by the Company except in limited circumstances.

F-17
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. OTHER CHARGES INCLUDING RESTRUCTURING CHARGES

Other charges of $92.7 million in 2000 include restructuring costs of $65.9
million and information technology integration costs of $26.8 million.
Restructuring costs relate to the NTL Incorporated's announcement in November
2000 of its completion of a consolidation review. Based on a comprehensive
review of the combined company following the acquisition of ConsumerCo and the
integration of several other acquired businesses, NTL Incorporated identified
significant efficiency improvements and cost savings. The restructuring
provision includes employee severance and related costs of $47.9 million for
approximately 2,300 employees to be terminated and lease exit costs of $18.0
million. As of December 31, 2000, approximately 360 of the employees had been
terminated. None of the provision had been utilized through December 31, 2000.
The information technology integration costs of $26.8 million were incurred for
the integration of acquired companies' information technology.

Other charges of $16.2 million in 1999 were incurred for the cancellation
of certain contracts. Other charges of $4.2 million reversed in 1998 were the
result of changes to a restructuring reserve that was recorded in 1997.

10. INCOME TAXES

The benefit for income taxes consists of the following:

YEAR ENDED DECEMBER 31,
-------------------------
2000 1999 1998
------ ------ -----
(IN MILLIONS)

Current:
Federal.......................................... $ -- $ 1.0 $ --
Foreign.......................................... 0.9 -- --
------ ------ -----
Total current...................................... 0.9 1.0 --
------ ------ -----
Deferred:
Federal.......................................... -- -- --
Foreign.......................................... (80.8) (30.9) (3.3)
------ ------ -----
Total deferred..................................... (80.8) (30.9) (3.3)
------ ------ -----
$(79.9) $(29.9) $(3.3)
====== ====== =====

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

F-18
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31,
--------------------
2000 1999
--------- -------
(IN MILLIONS)

Deferred tax liabilities:
Fixed assets.......................................... $ 591.9 $ 66.5
Intangibles........................................... 58.0 76.4
--------- -------
Total deferred tax liabilities.......................... 649.9 142.9
Deferred tax assets:
Net operating losses.................................. 1,491.9 396.0
Net deferred interest expense......................... 198.6 150.1
Depreciation and amortization......................... 378.0 269.9
Inventory............................................. 18.5 --
Purchase accounting liabilities....................... 158.5 --
Other................................................. 32.4 12.4
--------- -------
Total deferred tax assets............................... 2,277.9 828.4
Valuation allowance for deferred tax assets............. (1,623.1) (738.6)
--------- -------
Net deferred tax assets................................. 654.8 89.8
--------- -------
Net deferred tax (assets) liabilities................... $ (4.9) $ 53.1
========= =======

At December 31, 2000, the Company had a valuation allowance against its
deferred tax assets to the extent it was not more likely than not that such
assets would be realized in the future.

At December 31, 2000, the Company had net operating loss carryforwards of
approximately $550.0 million for U.S. federal income tax purposes that expire in
varying amounts commencing in 2009. This excludes net operating loss
carryforwards of companies that are resident in both the U.S. and the United
Kingdom. The Company also has United Kingdom net operating loss carryforwards of
approximately $4,000.0 million that have no expiration date. Pursuant to United
Kingdom law, these losses are only available to offset income of the separate
entity that generated the loss. A portion of the United Kingdom net operating
loss carryforward relates to dual resident companies, of which the U.S. net
operating loss carryforward amount is approximately $1,000.0 million.

In 2000, the Internal Revenue Service completed its federal income tax
audit of the Company for the years 1993, 1994 and 1995. The audit resulted in a
reduction in U.S. net operating loss carryforwards that had no material impact
on the Company. The Company is currently undergoing a U. S. federal income tax
audit for the years 1996 and 1997. The Company does not expect that the audit
adjustments will have a material adverse effect on its financial position,
results of operations or cash flows.

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

YEAR ENDED DECEMBER 31,
-----------------------------
2000 1999 1998
------- ------- -------
(IN MILLIONS)

(Benefit) at federal statutory rate (35%)...... $(863.8) $(261.0) $(188.3)
Add:
Foreign losses with no benefit............... 568.6 106.9 87.9
U.S. losses with no benefit.................. 215.3 124.2 97.1
------- ------- -------
$ (79.9) $ (29.9) $ (3.3)
======= ======= =======

F-19
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. FAIR VALUES OF FINANCIAL INSTRUMENTS

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

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

Long-term debt: The carrying amounts of the bank credit facility and
Variable Rate Notes approximate their fair values. The fair values of the
Company's other debt are based on the quoted market prices.

The carrying amounts and fair values of the Company's financial instruments
are as follows:

DECEMBER 31, 2000 DECEMBER 31, 1999
---------------------- ----------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
(IN MILLIONS)

Cash and cash equivalents................ $ 423.5 $ 423.5 $1,074.2 $1,074.2
Long-term debt:
12 3/4% Notes.......................... 277.8 255.6 268.1 278.5
11 1/2% Notes.......................... 1,040.5 913.5 930.4 950.3
10% Notes.............................. 400.0 348.0 400.0 414.0
9 1/2% Sterling Senior Notes........... 186.5 154.2 201.4 196.9
10 3/4% Sterling Notes................. 353.6 242.3 343.7 327.2
9 3/4% Notes........................... 1,048.5 715.0 952.8 913.3
9 3/4% Sterling Notes.................. 360.8 214.7 354.4 313.3
11 1/2% Notes.......................... 625.0 556.3 625.0 682.8
12 3/8% Notes.......................... 323.6 252.0 287.0 319.5
7% Convertible Notes................... 599.3 470.5 599.3 1,582.2
Variable Rate Notes.................... -- -- 76.8 76.8
9 1/4% Euro Notes...................... 234.7 207.7 252.3 254.8
9 7/8% Euro Notes...................... 328.6 269.4 353.2 356.8
11 1/2% Euro Deferred Notes............ 127.9 99.6 123.1 125.0
11 7/8% Senior Notes................... 489.6 445.0 -- --
Credit Agreement....................... 3,405.6 3,405.6 -- --
11.2% Debentures....................... 517.3 439.7 467.3 486.3
13 1/4% Notes.......................... 285.1 270.8 285.1 305.4
11 3/4% Notes.......................... 531.0 467.3 476.2 499.1
10 3/4% Notes.......................... 373.9 281.7 336.9 340.6
10% Sterling Notes..................... 201.9 161.5 218.1 218.1
9 1/8% Notes........................... 110.0 89.7 110.0 108.9

The Company has derivative financial instruments for purposes other than
trading as follows. In 2000, the Company entered into cross currency swaps to
hedge exposure to movements in the British pound/U.S. dollar exchange rate. The
notional amount of the cross currency swaps was L135.0 million at December 31,
2000. These swaps have payment dates in 2001 that match interest payment dates
for a portion of the Company's notes. The fair value of the swaps at December
31, 2000 was $(2.2) million based on quoted market prices for comparable
instruments.

F-20
153
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. RELATED PARTY TRANSACTIONS

The Company provided management, financial, legal and technical services to
Cellular Communications International, Inc. ("CCII") and Cellular Communications
of Puerto Rico, Inc. ("CCPR"). Certain officers and directors of the Company
were officers and directors of CCII and CCPR.

In 1998, the Company charged CCPR, CCII and CoreComm Limited ("CoreComm")
(which was formed in 1998 and has certain common officers and directors with the
Company) $1.1 million, $1.0 million and $0.3 million, respectively, for direct
costs where identifiable and a fixed percentage of its corporate overhead. In
the fourth quarter of 1999, CoreComm began charging the Company a percentage of
CoreComm's office rent and supplies expense. In 1999, the Company charged CCPR,
CCII and CoreComm $0.1 million, $0.4 million and $1.3 million, respectively, for
direct costs where identifiable and a fixed percentage of its corporate
overhead, net of CoreComm's charges to the Company. Charges to CCPR and to CCII
ceased in 1999 due to each of them being acquired and a resulting termination of
services. In 2000, the Company charged CoreComm $0.9 million for direct costs
where identifiable and a fixed percentage of its corporate overhead, net of
CoreComm's charges to the Company. These charges reduced corporate expenses in
2000, 1999 and 1998. It is not practicable to determine the amounts of these
expenses that would have been incurred had the Company operated as an
unaffiliated entity. In the opinion of management of the Company, the allocation
methods are reasonable.

The Company obtains billing and software development services from
CoreComm. CoreComm billed the Company $5.9 million, $4.6 million and $2.9
million in 2000, 1999 and 1998, respectively, for these services. In addition,
CoreComm billed the Company $6.7 million in October 2000 for services to be
rendered from January to September 2001. In March 2000, the Company and CoreComm
announced that they had entered into an agreement to link their networks in
order to create an international Internet backbone. In November 2000, CoreComm
billed the Company $9.1 million primarily for usage of the network in 2001.

At December 31, 2000 and 1999, the Company had a payable to CoreComm of
$17.1 million and a receivable from CoreComm of $0.5 million, respectively.

13. SHAREHOLDER'S EQUITY

Sales of Preferred Stock and Warrants

In January 1999, the Company received $500.0 million in cash from Microsoft
Corp. ("Microsoft") in exchange for 500,000 shares of the Company's 5.25%
Convertible Preferred Stock and warrants to purchase 1.9 million shares of the
Company's common stock at an exercise price of $53.76 per share (as adjusted for
stock splits in 1999 and 2000).

Series Preferred Stock

In February 1997, the Company issued 100,000 shares of its 13% Senior
Redeemable Exchangeable Preferred Stock.

In September 1998, the Company issued 125,000 shares of 9.9% Non-voting
Mandatorily Redeemable Preferred Stock, Series A (the "Series A Preferred
Stock") in connection with an acquisition. Each share of Series A Preferred
Stock had a stated value of $1,000. Cumulative dividends accrued at 9.9% of the
stated value per share. Dividends were payable when and if declared by the Board
of Directors.

In December 1998, the Company issued 52,000 shares of 9.9% Non-voting
Mandatorily Redeemable Preferred Stock, Series B (the "Series B Preferred
Stock") in connection with an acquisition. Each share of Series B Preferred
Stock had a stated value of $1,000. Cumulative dividends accrued at 9.9% of the
stated value per share. Dividends were payable when and if declared by the Board
of Directors.

F-21
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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

9.9% 9.9%
13% SERIES A SERIES B 5.25%
-------- -------- -------- --------

Balance, December 31, 1997................ 110,000 -- -- --
Issued for acquisitions................... -- 125,000 52,000 --
Issued for dividends...................... 15,000 -- -- --
-------- -------- ------- --------
Balance, December 31, 1998................ 125,000 125,000 52,000 --
Issued for cash........................... -- -- -- 500,000
Issued for dividends...................... 3,000 -- -- 4,000
Corporate restructuring................... (128,000) (125,000) (52,000) (504,000)
-------- -------- ------- --------
Balance, December 31, 1999................ -- -- -- --
======== ======== ======= ========

Stock Options

The Company's employees participate in the following NTL Incorporated stock
option plans.

There are 3,381,000 shares and 10,396,000 shares of common stock reserved
for issuance under the 1991 Stock Option Plan and the 1993 Stock Option Plan,
respectively. These plans provide that incentive stock options ("ISOs") be
granted at the fair market value of NTL Incorporated's common stock on the date
of grant, and nonqualified stock options ("NQSOs") be granted at not less than
85% of the fair market value of NTL Incorporated's common stock on the date of
grant. Options are exercisable as to 20% of the shares subject thereto on the
date of grant and become exercisable as to an additional 20% of the shares
subject thereto on each January 1 thereafter, while the optionee remains an
employee of the Company. Options will expire ten years after the date of the
grant. No additional options will be granted under these plans.

There are 156,000 shares and 500,000 shares of common stock reserved for
issuance under 1991 and 1993 Non-Employee Director Stock Option Plans,
respectively. Under the terms of these plans, options will be granted to members
of the Board of Directors who are not employees of the Company or any of its
affiliates. These plans provide that all options be granted at the fair market
value of NTL Incorporated's common stock on the date of grant, and options will
expire ten years after the date of the grant. Options are exercisable as to 20%
of the shares subject thereto on the date of grant and become exercisable as to
an additional 20% of the shares subject thereto on each subsequent anniversary
of the grant date while the optionee remains a director of the Company. Options
will expire ten years after the date of the grant. No additional options will be
granted under these plans.

There are 83,438,000 shares of common stock reserved for issuance under the
1998 Non-Qualified Stock Option Plan, and there are 31,478,000 shares available
for issuance at December 31, 2000. The exercise price of a NQSO shall be
determined by the Compensation and Option Committee. Options are generally
exercisable ratably over five to ten years while the optionee remains an
employee of the Company. Options will expire ten years after the date of the
grant.

In September 2000, the Board of Directors approved modifications to certain
stock options granted to employees in November 1999 through May 2000. Options to
purchase an aggregate of approximately 16.5 million shares of NTL Incorporated's
common stock with a weighted average exercise price of $64.39 per share were
modified such that the exercise price was reduced to $44.50 per share and the
vesting schedule was delayed and/or lengthened. This change did not affect the
exercise price of options granted to the Chairman of the Board, the Chief
Executive Officer and the Company's Directors. In accordance with APB Opinion
No. 25, "Accounting for Stock Issued to Employees" and related interpretations,
NTL Incorporated is accounting for these options as a variable plan beginning in
September 2000. The Company will recognize non-cash compensation expense for the
difference between the quoted market price of NTL Incorporated's common stock
and the exercise price of the vested options while the options remain
outstanding.

F-22
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

There were 34.8 million, 6.4 million and 13.9 million options granted under
these plans for the years ended December 31, 2000, 1999, and 1998, respectively.

Pro forma information regarding net loss and net loss per share is required
by SFAS No. 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions for 2000, 1999 and 1998: risk-free interest rates of 5.30%, 6.81%
and 5.02%, respectively, dividend yield of 0%, volatility factor of the expected
market price of NTL Incorporated's common stock of .385, .336, and .331,
respectively, and a weighted-average expected life of the option of 10 years.

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

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. Pro forma net
loss would have been approximately $1,780.7 million, $802.0 million and $580.7
million for the years ended December 31, 2000, 1999 and 1998, respectively.

14. EMPLOYEE BENEFIT PLANS

Certain subsidiaries of the Company operate defined benefit pension plans
in the United Kingdom. The assets of the Plans are held separately from those of
the Company and are invested in specialized portfolios under the management of
an investment group. The pension cost is calculated using the attained age
method. The Company's policy is to fund amounts to the defined benefit plans
necessary to comply with the funding requirements as prescribed by the laws and
regulations in the United Kingdom.

YEAR ENDED
DECEMBER 31,
--------------------
2000 1999
------ ------
(IN MILLIONS)

CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year................ $197.1 $213.4
Acquisition............................................ -- 10.7
Service cost........................................... 10.7 12.0
Interest cost.......................................... 11.3 12.0
Actuarial gains........................................ 0.2 (40.9)
Benefits paid.......................................... (5.7) (5.2)
Foreign currency exchange rate changes................. (11.8) (4.9)
------ ------
Benefit obligation at end of year...................... $201.8 $197.1
====== ======

F-23
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

YEAR ENDED
DECEMBER 31,
--------------------
2000 1999
------ ------
(IN MILLIONS)

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year......... $278.4 $225.3
Acquisition............................................ -- 10.1
Actual return on plan assets........................... 2.0 43.1
Company contributions.................................. 8.6 7.6
Plan participants' contributions....................... 3.4 2.9
Benefits paid.......................................... (5.7) (5.3)
Foreign currency exchange rate changes................. (17.6) (5.3)
------ ------
Fair value of plan assets at end of year............... $269.1 $278.4
====== ======
Funded status of the plan.............................. $ 67.3 $ 81.3
Unrecognized net actuarial gains....................... (62.0) (89.3)
Unrecognized transition obligation..................... 6.8 8.1
------ ------
Prepaid benefit cost................................... $ 12.1 $ 0.1
====== ======

YEAR ENDED
DECEMBER 31,
----------------------
2000 1999
------------- -----

Actuarial assumptions:
Weighted average discount rate.................... 6.00% 6.25%
Weighted average rate of compensation increase.... 3.50% - 4.25% 4.50%
Expected long-term rate of return on plan
assets......................................... 7.50% - 7.75% 8.00%

The components of net pension costs are as follows:

YEAR ENDED DECEMBER 31,
--------------------------
2000 1999 1998
------ ------ ------
(IN MILLIONS)

Service cost...................................... $ 10.7 $ 12.0 $ 13.4
Interest cost..................................... 11.3 12.0 14.7
Actual return on plan assets...................... (2.0) (43.1) (24.2)
Net amortization and deferral..................... (20.6) 26.8 8.3
------ ------ ------
$ (0.6) $ 7.7 $ 12.2
====== ====== ======

F-24
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. LEASES

Leases for buildings, office space and equipment extend through 2031. Total
rental expense for the years ended December 31, 2000, 1999 and 1998 under
operating leases was $46.2 million, $27.5 million and $29.4 million,
respectively.

Future minimum lease payments under noncancellable operating leases as of
December 31, 2000 are as follows (in millions):

Year ending December 31:
2001.............................................. $ 51.5
2002.............................................. 47.8
2003.............................................. 46.1
2004.............................................. 41.5
2005.............................................. 36.8
Thereafter........................................ 205.8
------
$429.5
======

16. COMMITMENTS AND CONTINGENT LIABILITIES

At December 31, 2000, the Company was committed to pay approximately
$1,112.0 million for equipment and services which includes approximately $860.0
million for certain operations and maintenance contracts through 2008.

The Company had certain exclusive local delivery operator licenses for
Northern Ireland and other franchise areas in the United Kingdom. Pursuant to
these licenses, various subsidiaries of the Company were required to make
monthly cash payments to the Independent Television Commission ("ITC") during
the 15-year license terms. Upon a request by the Company in 1999, the ITC
converted all of the Company's fee bearing exclusive licenses to non-exclusive
licenses by the end of 1999. In 1999 and 1998, the Company paid $30.1 million
and $25.0 million, respectively, in connection with these licenses. Since the
Company's liability for the license payments ceased upon the conversion, in 1999
the Company reversed an accrual for franchise fees of $13.6 million.

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

17. INDUSTRY SEGMENTS

The Company has four reportable segments: Broadcast Services, Consumer
Services, Business Services, and Shared Services. The Broadcast Services segment
operates in the United Kingdom and includes digital and analog television and
radio broadcasting, rental of antenna space on the Company's owned and leased
towers and sites and associated services, and satellite and media services.
Consumer Services include telephony, cable television, Internet access and
interactive services in regional franchise areas in the United Kingdom and
Ireland. The Business Services segment operates primarily in the United Kingdom
and includes telephony, national and international wholesale carrier
telecommunications, and radio communications services to the emergency services
community. Shared Services principally include network and information
technology management, finance, human resources and facilities management.
Shared Services also includes assets and related depreciation and amortization
that are not allocated to another segment. In 1998, Shared Services included
OCOM Corporation, a subsidiary that operated long distance and microwave
transmission businesses in the United States until June 1998.

F-25
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In 2000, components of the National Telecoms segment became part of the
Broadcast Services segment, and the remainder of National Telecoms was renamed
Business Services. The rental of antenna space on the Company's owned and leased
towers and sites and associated services, and satellite and media services
became components of Broadcast Services. The 1999 and 1998 segment information
has been reclassified to conform to the 2000 segments. Also, certain goodwill
and related amortization was reclassified to Broadcast Services from Shared
Services in all of the periods presented.

The accounting policies of the segments are the same as those described in
the Significant Accounting Policies note. The Company's management evaluates
segment performance based on various financial and non-financial measurements.
The results of operations data utilized in financial measurements are revenues
and EBITDA, which is earnings before interest, taxes, depreciation and
amortization, corporate expenses, franchise fees, other charges, other gains,
foreign currency transactions gains (losses) and extraordinary items. The
Company's primary measure of profit or loss is EBITDA. Certain selling, general
and administrative expenses are allocated to segments based on revenues.
Management does not allocate costs of shared services departments and jointly
used assets for purposes of measuring segment performance. The reportable
segments are strategic business units that are managed separately and offer
different services.

BROADCAST CONSUMER BUSINESS SHARED TOTAL
--------- --------- -------- -------- ---------
(IN MILLIONS)

Year ended December 31, 2000
Revenues............................. $263.8 $ 1,518.2 $ 702.2 $ -- $ 2,484.2
Depreciation and amortization........ 46.3 1,076.4 153.0 425.0 1,700.7
EBITDA(1)............................ 136.5 410.8 226.2 (481.6) 291.9
Expenditures for long-lived assets... 70.0 1,067.5 637.8 383.9 2,159.2
Total assets(2)...................... 647.3 17,888.3 1,525.5 3,085.4 23,146.5
Year ended December 31, 1999
Revenues............................. $257.3 $ 827.3 $ 452.5 $ -- $ 1,537.1
Depreciation and amortization........ 45.7 527.1 58.8 134.1 765.7
EBITDA(1)............................ 140.4 245.0 106.6 (279.3) 212.7
Expenditures for long-lived assets... 69.6 590.5 356.7 124.5 1,141.3
Total assets(3)...................... 658.3 5,978.5 805.9 2,290.3 9,733.0
Year ended December 31, 1998
Revenues............................. $231.3 $ 355.6 $ 157.7 $ 2.4 $ 747.0
Depreciation and amortization........ 41.7 143.5 17.8 63.1 266.1
EBITDA(1)............................ 115.2 67.6 12.3 (119.7) 75.4
Expenditures for long-lived assets... 165.9 413.9 220.4 67.1 867.3
Total assets......................... 645.8 3,100.5 406.1 2,041.7 6,194.1

- ---------------
(1) Represents earnings before interest, taxes, depreciation and amortization,
franchise fees, other charges, corporate expenses, other gains, foreign
currency transaction (losses) gains and extraordinary items.

(2) At December 31, 2000, shared assets included $355.0 million of cash, cash
equivalents and marketable securities, $1,794.1 million of goodwill and
$936.3 million of other assets.

(3) At December 31, 1999, shared assets included $828.6 million of cash, cash
equivalents and marketable securities, $916.4 million of goodwill and $545.3
million in other assets.

F-26
159
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The reconciliation of segment combined EBITDA to loss before income taxes
and extraordinary item is as follows:

YEAR ENDED DECEMBER 31,
-------------------------------
2000 1999 1998
--------- ------- -------
(IN MILLIONS)

Segment Combined EBITDA............................... $ 291.9 $ 212.7 $ 75.4
(Add) Deduct:
Franchise fees...................................... -- 16.5 25.0
Other charges....................................... 92.7 16.2 (4.2)
Corporate expenses.................................. 23.7 25.3 17.1
Depreciation and amortization....................... 1,700.7 765.7 266.1
Interest income and other, net...................... (1.6) (29.9) (46.0)
Interest expense.................................... 886.3 678.2 328.8
Other gains......................................... -- (493.1) --
Foreign currency transaction losses (gains)......... 58.1 (22.8) (4.2)
--------- ------- -------
2,759.9 956.1 582.6
--------- ------- -------
Loss before income taxes and extraordinary item....... $(2,468.0) $(743.4) $(507.2)
========= ======= =======

18. GEOGRAPHIC INFORMATION

UNITED STATES UNITED KINGDOM IRELAND TOTAL
------------- -------------- ------- ---------
(IN MILLIONS)

2000
Revenues........................... $ -- $ 2,423.0 $ 61.2 $ 2,484.2
Long-lived assets.................. 1.6 21,621.9 182.9 21,806.4
1999
Revenues........................... $ -- $ 1,505.9 $ 31.2 $ 1,537.1
Long-lived assets.................. 1.6 8,143.6 148.0 8,293.2
1998
Revenues........................... $2.4 $ 744.6 $ -- $ 747.0
Long-lived assets.................. 1.2 4,988.4 -- 4,989.6

F-27
160

NTL COMMUNICATIONS CORP.

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS
(IN MILLIONS)

DECEMBER 31,
----------------------
2000 1999
--------- ---------

ASSETS
Current assets:
Cash and cash equivalents................................. $ 168.2 $ 703.4
Marketable securities..................................... -- 5.0
Other..................................................... 10.5 3.2
--------- ---------
Total current assets........................................ 178.7 711.6
Office improvements and equipment, net of accumulated
depreciation of $1.2 (2000) and $1.3 (1999)............... 1.6 1.6
Investments in and loans to subsidiaries.................... 15,188.5 5,947.6
Deferred financing costs, net of accumulated amortization of
$51.4 (2000) and $32.2 (1999)............................. 136.6 142.8
Other assets................................................ -- 87.4
--------- ---------
Total assets................................................ $15,505.4 $ 6,891.0
========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities......................................... $ 96.8 $ 134.3
Long-term debt.............................................. 6,396.4 5,690.7
Shareholder's equity:
Common stock.............................................. -- --
Additional paid-in capital................................ 13,746.7 3,031.3
Accumulated other comprehensive income (loss)............. (379.3) 1.8
(Deficit)................................................. (4,355.2) (1,967.1)
--------- ---------
9,012.2 1,066.0
--------- ---------
Total liabilities and shareholder's equity.................. $15,505.4 $ 6,891.0
========= =========

See accompanying notes.
F-28
161

NTL COMMUNICATIONS CORP.

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
(IN MILLIONS)

YEAR ENDED DECEMBER 31,
-------------------------------
2000 1999 1998
--------- ------- -------

COSTS AND EXPENSES
Corporate expenses.......................................... $ 23.6 $ 22.7 $ 14.7
General and administrative expenses......................... 5.9 -- --
Depreciation and amortization............................... 19.7 18.3 10.6
--------- ------- -------
Operating (loss)............................................ (49.2) (41.0) (25.3)

OTHER INCOME (EXPENSE)
Interest income and other, net.............................. 14.4 121.6 128.5
Interest expense............................................ (599.4) (529.5) (317.7)
Foreign currency transaction gains.......................... 67.8 21.9 3.7
--------- ------- -------
(Loss) before income taxes, extraordinary item and equity in
net (loss) of subsidiaries................................ (566.4) (427.0) (210.8)
Income tax provision........................................ -- (1.0) --
--------- ------- -------
(Loss) before extraordinary item and equity in net (loss) of
subsidiaries.............................................. (566.4) (428.0) (210.8)
Loss from early extinguishment of debt...................... -- (3.0) (12.1)
--------- ------- -------
(Loss) before equity in net (loss) of subsidiaries.......... (566.4) (431.0) (222.9)
Equity in net (loss) of subsidiaries........................ (1,821.7) (285.5) (311.7)
--------- ------- -------
Net (loss).................................................. $(2,388.1) $(716.5) $(534.6)
========= ======= =======

See accompanying notes.
F-29
162

NTL COMMUNICATIONS CORP.

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
(IN MILLIONS)

YEAR ENDED DECEMBER 31,
-----------------------------------
2000 1999 1998
--------- --------- ---------

Net cash (used in) operating activities.................... $ (293.8) $ (118.3) $ (291.4)

INVESTING ACTIVITIES
Purchase of office improvements and equipment.............. (0.5) (0.9) (0.1)
Purchase of marketable securities.......................... -- (354.5) (540.6)
Proceeds from sales of marketable securities............... 5.0 618.6 291.3
Increase in investments in and loans to subsidiaries....... (5,953.2) (1,164.8) (1,466.4)
--------- --------- ---------
Net cash (used in) investing activities.................... (5,948.7) (901.6) (1,715.8)

FINANCING ACTIVITIES
Distribution to NTL (Delaware), Inc........................ -- (500.0) --
Contributions from NTL (Delaware), Inc..................... 5,227.2 167.6 --
Proceeds from borrowings, net of financing costs........... 476.3 1,846.0 2,697.8
Proceeds from issuance of preferred stock and warrants..... -- 500.0 --
Principal payments......................................... (73.7) (730.3) --
Proceeds from exercise of stock options and warrants....... -- 12.1 6.8
Consent solicitation payments.............................. -- -- (11.3)
Cash released from (placed in) escrow for debt repayment... 77.5 (87.0) (217.6)
--------- --------- ---------
Net cash provided by financing activities.................. 5,707.3 1,208.4 2,475.7
--------- --------- ---------
(Decrease) increase in cash and cash equivalents........... (535.2) 188.5 468.5
Cash and cash equivalents at beginning of year............. 703.4 514.9 46.4
--------- --------- ---------
Cash and cash equivalents at end of year................... $ 168.2 $ 703.4 $ 514.9
========= ========= =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest..................................... $ 240.2 $ 209.1 $ 77.3
Income taxes paid.......................................... 0.4 -- --

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Accretion of dividends and discount on preferred stock..... -- $ 8.6 $ 19.1
Conversion of Convertible Notes, net of unamortized
deferred financing costs................................. -- 269.3 187.0
Warrants issued in connection with consent solicitations... -- -- 10.1
Preferred stock issued for an acquisition.................. -- -- 178.5
Common stock and stock options issued for an acquisition... -- 978.0 600.5

See accompanying notes.
F-30
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL STATEMENTS

1. CORPORATE RESTRUCTURING

On May 18, 2000, NTL Incorporated completed a second corporate
restructuring to create a holding company structure in connection with the
acquisition of ConsumerCo. The holding company restructuring was accomplished
through a merger so that all the stockholders of NTL Incorporated at the
effective time of the merger became stockholders of the new holding company, and
NTL Incorporated became a subsidiary of the new holding company. The new holding
company has taken the name NTL Incorporated and the holding company's subsidiary
simultaneously changed its name to NTL (Delaware), Inc. NTL Communications Corp.
(the "Company") is a wholly-owned subsidiary of NTL (Delaware), Inc.

2. BASIS OF PRESENTATION

In the Company's condensed financial statements, the Company's investment
in subsidiaries is stated at cost plus equity in the undistributed earnings of
the subsidiaries. The Company's share of net loss of its subsidiaries is
included in net loss using the equity method of accounting. The condensed
financial statements should be read in conjunction with the Company's
consolidated financial statements.

3. LONG-TERM DEBT

Long-term debt consists of:

DECEMBER 31,
--------------------
2000 1999
-------- --------
(IN MILLIONS)

12 3/4% Senior Deferred Coupon Notes..................... (a) $ 277.8 $ 268.1
11 1/2% Senior Deferred Coupon Notes..................... (b) 1,040.5 930.4
10% Senior Notes......................................... (c) 400.0 400.0
9 1/2% Senior Sterling Notes, less unamortized
discount............................................... (d) 186.5 201.4
10 3/4% Senior Deferred Coupon Sterling Notes............ (e) 353.6 343.7
9 3/4% Senior Deferred Coupon Notes...................... (f) 1,048.5 952.8
9 3/4% Senior Deferred Coupon Sterling Notes............. (g) 360.8 354.4
11 1/2% Senior Notes..................................... (h) 625.0 625.0
12 3/8% Senior Deferred Coupon Notes..................... (i) 323.6 287.0

F-31
164
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31,
--------------------
2000 1999
-------- --------
(IN MILLIONS)

7% Convertible Subordinated Notes........................ (j) 599.3 599.3
Variable Rate Redeemable Guaranteed Loan Notes........... (k) -- 76.8
9 1/4% Senior Euro Notes................................. (l) 234.7 252.3
9 7/8% Senior Euro Notes................................. (m) 328.6 353.2
11 1/2% Senior Deferred Coupon Euro Notes................ (n) 127.9 123.1
11 7/8% Senior Notes, less unamortized discount.......... (o) 489.6 --
-------- --------
6,396.4 5,767.5
Less current portion..................................... -- 76.8
-------- --------
$6,396.4 $5,690.7
======== ========

- ---------------
(a) 12 3/4% Notes due April 15, 2005, principal amount at maturity of $277.8
million, interest payable semiannually from on October 15, 2000, redeemable
at the Company's option on or after April 15, 2000;

(k) Variable Rate Redeemable Guaranteed Notes due January 5, 2002, principal
amount at maturity of IRL 60.0 million after redemption of IRL20.0 million
($25.7 million) in 1999 using cash held in escrow, remainder redeemed in
March 2000 ($73.7 million) using cash held in escrow;

F-32
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NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL STATEMENTS -- (CONTINUED)

(l) 9 1/4% Euro Notes due November 15, 2006, principal amount at maturity of
E250.0 million ($234.7 million), interest payable semiannually from May 15,
2000;

(m) 9 7/8% Euro Notes due November 15, 2009, principal amount at maturity of
E350.0 million ($328.6 million), interest payable semiannually from
beginning May 15, 2000, redeemable at the Company's option on or after
November 15, 2004;

During 2000, 1999 and 1998, the Company recognized $334.3 million, $308.1
million and $232.7 million, respectively, of original issue discount as interest
expense.

In connection with the Cablelink acquisition, the Company issued $704.6
million principal amount Senior Increasing Rate Notes due 2000. In November
1999, the Company received net proceeds of $720.7 million from the issuance of
the 9 1/4% Euro Notes, the 9 7/8% Euro Notes and the 11 1/2% Deferred Euro
Notes, of which $716.5 million was used to repay the Senior Increasing Rate
Notes plus accrued interest. The Company recorded an extraordinary loss from the
early extinguishment of the notes of $3.0 million in 1999.

Long-term debt repayments are due as follows (in millions):

Year ending December 31:
2001............................................. $ --
2002............................................. --
2003............................................. --
2004............................................. --
2005............................................. 277.8
Thereafter....................................... 6,813.8
--------
$7,091.6
========

F-33
166
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL STATEMENTS -- (CONTINUED)

cash at a rate of 12 3/8% per annum beginning on August 1, 2001. These notes may
not be redeemed by the Company except in limited circumstances.

4. LEASES

Leases for office space end in 2004. Total rental expense for the years
ended December 31, 2000, 1999 and 1998 under operating leases was $2.0 million,
$1.2 million and $0.6 million, respectively.

Future minimum lease payments under noncancellable operating leases as of
December 31, 2000 are (in millions): $1.0 (2001), $1.1 (2002), $1.1 (2003) and
$0.7 (2004).

5. OTHER

No cash dividends were paid to the registrant by subsidiaries for the years
ended December 31, 2000, 1999 and 1998.

F-34
167

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

COL. A COL. B COL. C COL. D COL. E
- ---------------------------------------- ------------ ------------------------ ------------- ---------
ADDITIONS
------------------------
(2)
(1) CHARGED TO
BALANCE AT CHARGED TO OTHER (DEDUCTIONS)/ BALANCE
BEGINNING OF COSTS AND ACCOUNTS -- ADDITIONS AT END
DESCRIPTION PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD
- ----------- ------------ ---------- ----------- ------------- ---------

Year ended December 31, 2000
Allowance for doubtful accounts....... $84.9 $98.5 $-- $(48.2)(a) $135.2
===== ===== == ====== ======
Year ended December 31, 1999
Allowance for doubtful accounts....... $38.5 $45.7 $-- $ 0.7(b) $ 84.9
===== ===== == ====== ======
Year ended December 31, 1998
Allowance for doubtful accounts....... $ 8.1 $27.3 $-- $ 3.1(c) $ 38.5
===== ===== == ====== ======

- ---------------
(a) Uncollectible accounts written-off, net of recoveries of $91.6 million and
$5.7 million foreign exchange currency translation adjustments, offset by
$49.1 million allowance for doubtful accounts as of acquisition dates of
purchased subsidiaries.

(b) Uncollectible accounts written-off, net of recoveries of $15.1 million and
$1.1 million foreign currency exchange translation adjustments, offset by
$16.9 million allowance for doubtful accounts as of acquisition dates of
purchased subsidiaries.

(c) Uncollectible accounts written-off, net of recoveries of $9.2 million,
offset by $12.2 million allowance for doubtful accounts as of acquisition
dates of purchased subsidiaries and $0.1 million foreign currency
translation adjustments.

F-35
168

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)

MARCH 31, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED) (SEE NOTE)

ASSETS
Current assets:
Cash and cash equivalents................................. $ 283.9 $ 423.5
Accounts receivable -- trade, less allowance for doubtful
accounts of $134.7 (2001) and $135.2 (2000)............ 461.8 527.4
Due from affiliates....................................... 100.0 105.1
Other..................................................... 343.9 284.1
--------- ---------
Total current assets........................................ 1,189.6 1,340.1
Fixed assets, net........................................... 10,554.6 10,916.8
Intangible assets, net...................................... 10,371.5 10,566.1
Other assets, net of accumulated amortization of $81.3
(2001) and $81.8 (2000)................................... 287.8 318.6
Deferred incomes taxes...................................... 6.0 4.9
--------- ---------
Total assets................................................ $22,409.5 $23,146.5
========= =========

F-36
169
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS -- (CONTINUED)
(DOLLARS IN MILLIONS)

MARCH 31, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED) (SEE NOTE)

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable.......................................... $ 370.8 $ 451.1
Accrued expenses and other................................ 1,089.8 1,105.6
Accrued construction costs................................ 124.1 172.9
Due to affiliates......................................... -- 117.9
Interest payable.......................................... 161.6 127.6
Deferred revenue.......................................... 285.9 291.5
Current portion of long-term debt......................... 3.0 10.7
---------- ----------
Total current liabilities 2,035.2 2,277.3
Long-term debt.............................................. 12,101.2 11,843.4
Other....................................................... 14.0 13.6
Commitments and contingent liabilities
Shareholder's equity:
Common stock -- $.01 par value; authorized 100 shares;
issued and outstanding 12 (2001) and 12 (2000)
shares................................................. -- --
Additional paid-in capital................................ 13,951.8 13,746.7
Accumulated other comprehensive (loss).................... (501.7) (379.3)
(Deficit)................................................. (5,191.0) (4,355.2)
---------- ----------
8,259.1 9,012.2
---------- ----------
Total liabilities and shareholder's equity.................. $ 22,409.5 $ 23,146.5
========== ==========

Note: The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date.

See accompanying notes.
F-37
170

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN MILLIONS)

THREE MONTHS ENDED
MARCH 31,
-------------------
2001 2000
-------- -------

REVENUES
Consumer telecommunications and television.................. $ 502.2 $ 248.3
Business and international telecommunications............... 200.2 158.0
Broadcast transmission and other............................ 68.1 64.6
-------- -------
770.5 470.9
COSTS AND EXPENSES
Operating expenses.......................................... 386.8 213.0
Selling, general and administrative expenses................ 279.4 189.2
Other charges............................................... 7.4 --
Corporate expenses.......................................... 4.1 6.6
Depreciation and amortization............................... 623.7 235.3
-------- -------
1,301.4 644.1
-------- -------
Operating (loss)............................................ (530.9) (173.2)
OTHER INCOME (EXPENSE)
Interest income and other, net.............................. 7.6 8.5
Interest expense............................................ (308.0) (188.7)
Foreign currency transaction (losses) gains................. (5.7) 12.0
-------- -------
(Loss) before income tax taxes.............................. (837.0) (341.4)
Income tax benefit.......................................... 1.2 4.7
-------- -------
Net (loss).................................................. $ (835.8) $(336.7)
======== =======

See accompanying notes.
F-38
171

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
(UNAUDITED)
(DOLLARS IN MILLIONS)

COMMON STOCK
$.01 PAR VALUE
--------------
SHARES PAR
------ ----

Balance December 31, 2000................................... 12 $ --
Contribution from NTL (Delaware), Inc.......................
Comprehensive loss:
Net loss for the three months ended March 31, 2001..........
Currency translation adjustment.............................
Unrealized net gains on derivatives.........................
Total..................................................
--- ----
Balance, March 31, 2001..................................... 12 $ --
=== ====

See accompanying notes.
F-39
172
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY -- (CONTINUED)
(UNAUDITED)
(DOLLARS IN MILLIONS)

ACCUMULATED OTHER
COMPREHENSIVE LOSS
---------------------------
UNREALIZED
ADDITIONAL FOREIGN NET GAINS
PAID-IN COMPREHENSIVE CURRENCY ON
CAPITAL LOSS TRANSLATION DERIVATIVES DEFICIT
---------- ------------- ----------- ------------ ---------

Balance, December 31, 2000... $13,746.7 $(379.3) $(4,355.2)
Contribution from NTL
(Delaware), Inc. .......... 205.1
Comprehensive loss:
Net loss for the three months
ended March 31, 2001....... $(835.8) (835.8)
Currency translation
adjustment................. (125.1) (125.1)
Unrealized net gains on
derivatives................ 2.7 $2.7
-------
Total................. $(958.2)
--------- ------- ------- ---- ---------
Balance, March 31, 2001...... $13,951.8 $(504.4) $2.7 $(5,191.0)
========= ======= ======= ==== =========

See accompanying notes.
F-40
173

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)

THREE MONTHS ENDED
MARCH 31,
-------------------
2001 2000
------- --------

Net cash (used in) operating activities..................... $(160.3) $ (1.7)
INVESTING ACTIVITIES
Purchase of marketable securities......................... -- (2.2)
Proceeds from sales of marketable securities.............. -- 5.0
Increase in other assets.................................. (8.8) (0.9)
Purchase of fixed assets.................................. (542.0) (356.9)
------- --------
Net cash (used in) investing activities................... (550.8) (355.0)
FINANCING ACTIVITIES
Cash released from escrow................................. -- 83.3
Increase in deferred financing costs...................... -- (0.7)
Proceeds from borrowings, net of financing costs.......... 596.7 --
Principal payments........................................ (22.1) (75.3)
Contribution from NTL (Delaware), Inc. ................... 7.0 6.0
------- --------
Net cash provided by financing activities................. 581.6 13.3
Effect of exchange rate changes on cash................... (10.1) (4.5)
------- --------
Decrease in cash and cash equivalents..................... (139.6) (347.9)
Cash and cash equivalents at beginning of period.......... 423.5 1,074.2
------- --------
Cash and cash equivalents at end of period................ $ 283.9 $ 726.3
======= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest exclusive of
amounts capitalized.................................... $ 164.4 $ 90.0
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Conversion of Convertible Notes........................... $ 109.5 $ --
Contribution from NTL (Delaware), Inc. ................... 198.1 --

See accompanying notes.
F-41
174

NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2001 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in a Current Report on Form
8-K/A dated May 4, 2001 of NTL Communications Corp.

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

NOTE B -- CORPORATE RESTRUCTURING

On May 18, 2000, NTL Incorporated completed a corporate restructuring to
create a holding company structure in connection with the acquisition of certain
assets of Cable & Wireless Communications plc ("CWC") (the operations acquired
from CWC are called "ConsumerCo"). The holding company restructuring was
accomplished through a merger so that all the stockholders of NTL Incorporated
at the effective time of the merger became stockholders of the new holding
company, and NTL Incorporated became a subsidiary of the new holding company.
The new holding company has taken the name NTL Incorporated and the holding
company's subsidiary simultaneously changed its name to NTL (Delaware), Inc.
("NTL Delaware"). The Company is a wholly-owned subsidiary of NTL Delaware.

On February 21, 2001, the Company completed a transaction whereby it
acquired the entire issued share capital of NTL (CWC Holdings) Limited (the
entity that owns ConsumerCo) from NTL Incorporated and the entire issued share
capital of NTL Business Limited (formerly Workplace Technologies plc) from NTL
Delaware in exchange for shares of its common stock. As a result of this
transaction, ConsumerCo and NTL Business Limited became wholly-owned
subsidiaries of the Company. The Company accounted for the transaction in a
manner consistent with a transfer of entities under common control, which is
similar to a "pooling of interests." Accordingly, the net assets and results of
operations of ConsumerCo and NTL Business Limited have been included in the
consolidated financial statements from their original dates of acquisition, May
30, 2000 and September 20, 1999, respectively.

NOTE C -- FIXED ASSETS

Fixed assets consist of:

MARCH 31, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED)
(IN MILLIONS)

Operating equipment......................................... $10,107.9 $10,004.9
Other equipment............................................. 1,139.2 1,079.8
Construction-in-progress.................................... 1,178.6 1,509.7
--------- ---------
12,425.7 12,594.4
Accumulated depreciation.................................... (1,871.1) (1,677.6)
--------- ---------
$10,554.6 $10,916.8
========= =========

Depreciation expense for the three months ended March 31, 2001 and 2000 was
$292.9 million and $145.3 million, respectively.

F-42
175
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

NOTE D -- INTANGIBLE ASSETS

Intangible assets consist of:

MARCH 31, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED)
(IN MILLIONS)

Goodwill, net of accumulated amortization of $1,096.9 (2001)
and $837.3 (2000)......................................... $10,082.3 $10,236.4
License acquisition costs, net of accumulated amortization
of $227.3 (2001) and $215.8 (2000)........................ 121.6 139.2
Customer lists, net of accumulated amortization of $77.8
(2001) and $70.4 (2000)................................... 139.5 158.6
Other intangibles, net of accumulated amortization of $7.4
(2001) and $5.5 (2000).................................... 28.1 31.9
--------- ---------
$10,371.5 $10,566.1
========= =========

In September 1999, NTL Delaware acquired the shares of Workplace
Technologies plc. On February 21, 2001, the Company completed a transaction
whereby it acquired the entire issued share capital of NTL Business Limited
(formerly Workplace Technologies plc) from NTL Delaware in exchange for shares
of its common stock. As a result of this transaction, NTL Business Limited
became a wholly-owned subsidiary of the Company. The Company accounted for the
transaction in a manner consistent with a transfer of entities under common
control, which is similar to a "pooling of interests." Accordingly, the net
assets and results of operations of NTL Business Limited have been included in
the Company's consolidated financial statements from the date of acquisition by
NTL Delaware.

On May 30, 2000, NTL Incorporated acquired ConsumerCo. On February 21,
2001, the Company completed a transaction whereby it acquired the entire issued
share capital of NTL (CWC Holdings) Limited (the entity that owns ConsumerCo)
from NTL Incorporated in exchange for shares of its common stock. As a result of
this transaction, ConsumerCo became a wholly-owned subsidiary of the Company.
The Company accounted for the transaction in a manner consistent with a transfer
of entities under common control, which is similar to a "pooling of interests."
Accordingly, the net assets and results of operations of ConsumerCo have been
included in the Company's consolidated financial statements from the date of
acquisition by NTL Incorporated.

A significant component of the pro forma results is associated with the
acquisition of ConsumerCo. The historical results of ConsumerCo reflect certain
intercompany costs and expenses as they were prior to the separation of
ConsumerCo, which was completed in the second quarter of 2000. These costs and
expenses do not necessarily reflect the costs and expenses that would have been
incurred had ConsumerCo reported as a separate entity for these periods.
Therefore the historical results of ConsumerCo, which are included in the pro
forma results below are not reflective of results on a going forward basis. The
pro forma unaudited consolidated results of operations for the three months
ended March 31, 2000 assuming consummation of the above mentioned transactions
as of January 1, 2000 is as follows (in millions):

Total revenue............................................... $ 761.2
Net (loss).................................................. (692.0)

Amortization of intangible and other assets charged to expense for the
three months ended March 31, 2001 and 2000 was $330.8 million and $90.0 million,
respectively.

F-43
176
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

NOTE E -- LONG TERM DEBT

Long-term debt consists of:

MARCH 31, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED)
(IN MILLIONS)

NTL Communications:
12 3/4% Senior Deferred Coupon Notes...................... $ 277.8 $ 277.8
11 1/2% Senior Deferred Coupon Notes...................... 1,050.0 1,040.5
10% Senior Notes.......................................... 400.0 400.0
9 1/2% Senior Sterling Notes, less unamortized discount... 176.9 186.5
10 3/4% Senior Deferred Coupon Sterling Notes............. 344.4 353.6
9 3/4% Senior Deferred Coupon Notes....................... 1,073.6 1,048.5
9 3/4% Senior Deferred Coupon Sterling Notes.............. 350.5 360.8
11 1/2% Senior Notes...................................... 625.0 625.0
12 3/8% Senior Deferred Coupon Notes...................... 333.3 323.6
7% Convertible Subordinated Notes......................... 489.8 599.3
9 1/4% Senior Euro Notes.................................. 219.9 234.7
9 7/8% Senior Euro Notes.................................. 307.8 328.6
11 1/2% Senior Deferred Coupon Euro Notes................. 123.2 127.9
11 7/8% Senior Notes, less unamortized discount........... 489.9 489.6
12 3/8% Senior Euro Notes................................. 263.8 --
NTL Communications Limited:
Credit Agreement.......................................... 3,547.5 375.3
Other..................................................... 2.3 --
NTL Business:
Credit Agreement.......................................... -- 3,030.3
ConsumerCo:
Term Loan Facility and Other.............................. -- 21.7
NTL Triangle:
11.2% Senior Discount Debentures.......................... 517.3 517.3
Other..................................................... 4.5 5.2
Diamond:
13 1/4% Senior Discount Notes............................. 285.1 285.1
11 3/4% Senior Discount Notes............................. 531.0 531.0
10 3/4% Senior Discount Notes............................. 383.8 373.9
10% Senior Sterling Notes................................. 191.6 201.9
9 1/8% Senior Notes....................................... 110.0 110.0
Other..................................................... 5.2 6.0
--------- ---------
12,104.2 11,854.1
Less current portion........................................ 3.0 10.7
--------- ---------
$12,101.2 $11,843.4
========= =========

In May 2000, NTL Business Limited ('NTL Business') and NTL Communications
Limited ("NTLCL"), wholly-owned indirect subsidiaries of the Company, entered
into a L2,500.0 million ($3,547.5 million) credit agreement in connection with
the ConsumerCo acquisition. As of March 31, 2001, there was L2,500.0 million
($3,547.5 million) outstanding under the credit agreement. The effective rate of
interest at March 31, 2001 was 8.03%.

In January and February 2001, the Company issued E300.0 million ($263.8
million) aggregate principal amount of 12 3/8% Senior Euro Notes due February 1,
2008. The Company received proceeds of approximately $271.9 million after
underwriters' discount and commissions and other fees. Interest is payable
semiannually in

F-44
177
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

cash at a rate of 12 3/8% per annum beginning on August 1, 2001. These notes may
not be redeemed by the Company except in limited circumstances.

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

On February 21, 2001, as required by the NTL Business and NTLCL credit
agreement, the Company completed a transaction whereby it acquired the entire
issued share capital of NTL (CWC Holdings) Limited (the entity that owns
ConsumerCo) from NTL Incorporated and the entire issued share capital of NTL
Business from NTL Delaware in exchange for shares of its common stock. As a
result of this transaction, ConsumerCo and NTL Business became subsidiaries of
the Company and NTL Business' interest in the L2,500.0 million credit agreement
was assigned to a subsidiary of NTLCL.

On April 27, 2001, the Company received a commitment from a unit of GE
Capital for $388.0 million in financing. Subject to definitive documentation and
customary closing conditions, GE Capital will provide L200.0 million ($283.8
million) through an increase to the L2,500.0 million credit agreement of NTLCL.
This increase is also subject to the consent of the existing lenders under the
credit agreement. The remainder will be in the form of 5.75% convertible notes,
convertible into NTL Incorporated common stock at a conversion price of $35.00
per share. The Company intends to use approximately half of the proceeds to
repay outstanding amounts under the L2,500.0 million credit agreement and the
remainder for construction, capital expenditure and general corporate purposes.

On May 9, 2001, NTL Incorporated announced that the Company had priced an
issue of $1,000.0 million of 6 3/4% Convertible Senior Notes due May 15, 2008.
Interest will be payable semiannually commencing on November 15, 2001. These
notes will be convertible into shares of NTL Incorporated common stock at the
option of the holder after August 13, 2001 at a conversion price of $32.728 per
share. After May 20, 2004, the notes will be redeemable, in whole or from time
to time in part, at the option of NTL Incorporated or the Company. NTL
Incorporated will be a co-obligor of the notes on a subordinated basis. The
closing of the sale of the notes is expected to occur on May 15, 2001.

NTLCL has a L1,300.0 million ($1,844.7 million) credit agreement with a
group of banks which is available to finance working capital requirements of the
U.K. Group, as defined. For purposes of this credit agreement, Diamond Cable
Communications Limited and subsidiaries, NTL (Triangle) LLC and subsidiaries and
certain other entities are excluded from the U.K. Group. Pursuant to the credit
agreement, in connection with the issuance of notes by the Company beginning in
October 2000, the commitment was reduced by L255.1 million ($362.0 million).
Following the issuance of the 6 3/4% Convertible Senior Notes, the commitment
will be further reduced by approximately L382.1 million ($542.2 million). As of
March 31, 2001, there were no amounts borrowed under this credit agreement. As
of May 9, 2001, L200.0 million ($283.8 million) had been borrowed.

NOTE F -- DERIVATIVE FINANCIAL INSTRUMENTS

F-45
178
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

On January 1, 2001, the Company recorded all of its outstanding derivative
instruments at their fair value. The outstanding derivative instruments were
comprised of cross currency swaps to hedge exposure to movements in the British
pound/U.S. dollar exchange rate. The aggregate fair value on January 1, 2001 was
a liability of $2.2 million, which was recorded as other comprehensive loss. In
2001, the Company entered into cross currency swaps to hedge exposure to
movements in the Euro/British pound exchange rate. In the three months ended
March 31, 2001, the Company recorded other comprehensive income of $4.9 million
as result of changes in the fair values. The aggregate fair value at March 31,
2001 was a net asset of $2.7 million.

NOTE G -- OTHER CHARGES

NOTE H -- RESTRUCTURING COSTS

The Company recorded restructuring costs in November 2000 as a result of
the completion of a consolidation review. This charge consisted of employee
severance and related costs of $47.9 million for approximately 2,300 employees
to be terminated and lease exit costs of $18.0 million. As of March 31, 2001,
$20.5 million of the provision had been used, including $17.5 million for
employee severance and related costs and $3.0 million for lease exit costs. As
of March 31, 2001, approximately 1,100 employees had been terminated. The
remaining restructuring reserve of $45.4 million includes $30.4 million for
employee severance and related costs and $15.0 million for lease exit costs.

NOTE I -- RELATED PARTY TRANSACTIONS

On April 12, 2001, NTL Incorporated purchased $15.0 million of an unsecured
convertible note of CoreComm Limited, a company that offers telecommunications
and Internet services to residential and business customers in the United
States. In addition, concurrently with the note purchase and without additional
compensation, NTL Incorporated entered into a network and software agreement
with CoreComm. Under the agreement, CoreComm will provide U.S. network access on
CoreComm's network for Internet traffic from NTL Incorporated's U.K. customers,
as well as royalty free license to use certain billing and provisioning software
and know-how. Certain officers and directors of NTL Incorporated are also
officers and directors of CoreComm. In light of this relationship, the
independent directors of NTL Incorporated examined the transaction with
CoreComm. The board of directors determined that the transaction was inherently
fair and provided NTL Incorporated with benefits that exceeded those that could
be obtained from a third party.

NOTE J -- COMPREHENSIVE LOSS

The Company's comprehensive loss for the three months ended March 31, 2001
and 2000 was $958.2 million and $398.0 million, respectively.

F-46
179
NTL COMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

NOTE K -- SEGMENT DATA

BROADCAST CONSUMER BUSINESS SHARED TOTAL
--------- --------- -------- -------- ---------
(IN MILLIONS)

Three months ended March 31, 2001
Revenues...................................... $ 68.1 $ 502.2 $ 200.2 $ -- $ 770.5
EBITDA(1)..................................... 34.1 157.0 70.7 (157.5) 104.3
Three months ended March 31, 2000
Revenues...................................... $ 64.6 $ 248.3 $ 158.0 $ -- $ 470.9
EBITDA(1)..................................... 34.6 72.3 36.2 (74.4) 68.7
Total assets
March 31, 2001(2)............................. $607.7 $18,572.9 $1,562.8 $1,666.1 $22,409.5
December 31, 2000(3).......................... 647.3 19,113.0 1,753.3 1,632.9 23,146.5

- ---------------

(1) Represents earnings before interest, taxes, depreciation and amortization,
other charges, corporate expenses, and foreign currency transaction
(losses) gains.

(2) At March 31, 2001, shared assets included $221.5 million of cash and cash
equivalents, $491.3 million of goodwill and $953.3 million of other assets.

(3) At December 31, 2000, shared assets include $355.0 million of cash and cash
equivalents, $418.8 million of goodwill and $859.1 million of other assets.

The reconciliation of segment combined EBITDA to loss before income tax
benefit is as follows:

THREE MONTHS ENDED
MARCH 31,
------------------
2001 2000
------- -------
(IN MILLIONS)

Segment Combined EBITDA..................................... $ 104.3 $ 68.7
(Add) Deduct:
Other charges............................................... 7.4 --
Corporate expenses.......................................... 4.1 6.6
Depreciation and amortization............................... 623.7 235.3
Interest income and other, net.............................. (7.6) (8.5)
Interest expense............................................ 308.0 188.7
Foreign currency transaction losses (gains)................. 5.7 (12.0)
------- -------
941.3 410.1
------- -------
(Loss) before income tax benefit............................ $(837.0) $(341.4)
======= =======

NOTE L -- COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2001, the Company was committed to pay approximately $1,115.0
million for equipment and services, which includes approximately $780.0 million
for certain operations and maintenance contracts through 2008.

F-47
180

REPORT OF INDEPENDENT AUDITORS

To:The Board of Directors
ntl (CWC Holdings)

We have audited the accompanying consolidated balance sheet of ntl (CWC
Holdings) as of December 31, 2000, and the related consolidated statements of
operations, shareholders' equity and cash flows for the seven months then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of ntl (CWC
Holdings) at December 31, 2000, and the consolidated results of its operations
and its consolidated cash flows for the seven months then ended in conformity
with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG

London, England
May 3, 2001

F-48
181

NTL (CWC HOLDINGS)

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUND STERLING, EXCEPT SHARE DATA)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... L 24
Accounts receivable, net of allowance for doubtful accounts
of L32.................................................... 87
Affiliate receivable........................................ 59
Prepaid expenses............................................ 36
------
Total current assets........................................ 206
Investment in affiliates.................................... 2
Fixed assets, net of accumulated depreciation of L182....... 3,297
Intangible assets, net of accumulated amortization of
L350...................................................... 5,568
Other assets................................................ 28
------
Total assets................................................ L8,895
======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................................ L 64
Accrued expenses and other current liabilities.............. 368
Taxes, other than income taxes.............................. 6
Deferred revenue............................................ 29
Amounts owed to affiliates.................................. 147
Current portion of long-term debt........................... 5
------
Total current liabilities................................... 619
3.5% Unsecured Convertible Loan Notes due 2001.............. --
Amount owed to affiliate.................................... 2,488
Long-term debt.............................................. 10
------
Total liabilities........................................... 3,117
Commitments and contingencies
Minority interests.......................................... 9
Shareholders' equity:
Share capital
Ordinary shares -- L1.32 nominal value. Authorized 1,625
million shares; issued and outstanding 1,497 million
shares.................................................... 1,976
Additional paid-in capital.................................. 4,336
Retained earnings (deficit)................................. (543)
------
Total shareholders' equity.................................. 5,769
------
Total liabilities and shareholders' equity.................. L8,895
======

The accompanying notes are an integral part of these financial statements.
F-49
182

NTL (CWC HOLDINGS)

CONSOLIDATED STATEMENT OF OPERATIONS
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

REVENUES:
Consumer telecommunications and television.................. L 362
Business telecommunications................................. 42
-----
404
COSTS AND EXPENSES:
Operating expenses.......................................... (191)
Selling, general and administrative expenses................ (142)
Restructuring costs......................................... (7)
Depreciation and amortization............................... (532)
-----
Operating loss.............................................. (468)
Interest payable to affiliates.............................. (89)
Interest payable to third parties........................... (1)
-----
Loss before minority interests and income taxes............. (558)
Income tax benefit.......................................... 13
-----
Loss after income taxes and before minority interests....... (545)
Minority interests.......................................... 2
-----
Net loss.................................................... L(543)
-----

The accompanying notes are an integral part of these financial statements.
F-50
183

NTL (CWC HOLDINGS)

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING EXCEPT NUMBER OF SHARES)

ORDINARY
SHARES L1.32
NOMINAL VALUE
NUMBER OF ORDINARY ADDITIONAL RETAINED
SHARES SHARES L1.32 PAID IN EARNINGS
(MILLIONS) NOMINAL VALUE CAPITAL (DEFICIT) TOTAL
------------- ------------- ---------- --------- ------

Balance at beginning of period.............. 1,496 L1,976 L4,334 L -- L6,310
Net loss for the period..................... -- -- -- (543) (543)
Conversion of 5% Unsecured Convertible Loan
Notes..................................... 1 -- 2 -- 2
----- ------ ------ ----- ------
Balance at end of period.................... 1,497 L1,976 L4,336 L(543) L5,769
===== ====== ====== ===== ======

The accompanying notes are an integral part of these financial statements.
F-51
184

NTL (CWC HOLDINGS)

CONSOLIDATED STATEMENT OF CASH FLOWS
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

OPERATING ACTIVITIES
Net loss.................................................... L(543)
Adjustment to reconcile net loss to net cash provided by
operating activities:
Minority interests.......................................... (2)
Depreciation and amortization............................... 532
Deferred income taxes....................................... (13)
Provision for losses on accounts receivable................. (1)
Changes in operating assets and liabilities:
Accounts receivable......................................... (10)
Prepaid expenses............................................ (3)
Other assets................................................ 16
Accounts payable............................................ (5)
Accrued expenses and other current liabilities.............. 119
Deferred revenue............................................ 9
-----
Net cash provided by operating activities................... 99
-----
INVESTING ACTIVITIES
Purchase of fixed assets.................................... (304)
-----
Net cash used in investing activities....................... (304)
-----
FINANCING ACTIVITIES
Increase in loans from affiliate............................ 200
Repayment of debt........................................... (8)
-----
Net cash used by financing activities....................... 192
-----
Decrease in cash and cash equivalents....................... (13)
Cash and cash equivalents at beginning of period............ 37
-----
Cash and cash equivalents at end of period.................. L 24
=====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid during the period, net of amounts
capitalized............................................... L 6
=====
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Conversion of 5% Unsecured Convertible Loan Notes........... L 2
=====

The accompanying notes are an integral part of these financial statements.
F-52
185

NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

1 ORGANIZATION AND NATURE OF BUSINESS

ntl (CWC Holdings), formerly Cable & Wireless Communications (Holdings) plc
(the "Company"), was incorporated on February 4, 2000. On May 12, 2000, the
Company acquired the entire issued share capital of ntl (CWC) Limited, formerly
Cable & Wireless Communications plc.

The Company, an unlimited company registered in England and Wales, is a
wholly owned subsidiary of NTL Incorporated ("NTL"). NTL acquired the Company on
May 30, 2000. On February 21, 2001, as part of a corporate restructuring, the
Company's immediate parent became NTL Group Limited.

The Company, through its subsidiaries, owns and operates broadband
communication networks for telephone, cable television and internet services in
the United Kingdom. The Company offers telephony, cable television, internet
access and interactive services to its consumer customers and telephony services
to its business customers. These broadband cable and local telecommunications
network currently passes in excess of four million residences and business
establishments within its 47 franchise areas.

2 SIGNIFICANT ACCOUNTING POLICIES

a) Basis of accounting

The financial statements have been prepared in accordance with generally
accepted accounting principles in the United States ("US GAAP") and are
expressed in Pounds Sterling. These financial statements have been prepared for
the period post NTL's acquisition from May 31, 2000 to December 31, 2000. The
purchase price accounting of the Company by NTL has been pushed down into these
financial statements in accordance with SEC requirements.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

Principles of consolidation

The consolidated financial statements include the accounts of ntl (CWC
Holdings) and subsidiaries. The results of subsidiaries acquired or disposed of
during the period are included from the date of their acquisition or up to the
date of their disposal. Significant intercompany accounts and transactions have
been eliminated in consolidation.

b) Revenue recognition

Revenue, which excludes United Kingdom value added tax, represents the
amount receivable in respect of services provided to customers in each period
and is recognized as follows:

Telephony

Revenue is recognized in respect of services provided to customers as the
service is used. At the end of each quarter, adjustments are recorded to defer
revenue with respect to services invoiced in advance and to accrue for unbilled
services.

F-53
186
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

Cable television

Rentals

Revenue is recognized in respect of line rentals and rental equipment
provided to customers on a straight-line basis over the term of the rental
agreement. At the end of each quarter, adjustments are recorded to defer revenue
with respect to rentals invoiced in advance and to accrue for unbilled rental
income.

Installations

Installation fees are recognized as revenue whenever the cost of
installation exceeds the installation fee. Where the installation fee exceeds
the cost of installation, the excess is deferred and recognized as revenue over
the expected life of the contract.

c) Interconnection with other operators

When traffic is carried by operators of other national and international
telecommunications networks, the charges incurred are matched with the
associated revenues. All charges payable to, or by, other telecommunications
companies are negotiated separately and are subject to continuous review.

d) Intangible assets

Intangible assets include goodwill, customer lists and other intangibles.
Goodwill is calculated as the excess of the purchase price over the fair value
of net tangible and identifiable intangible assets acquired in business
combinations accounted for as purchases. Goodwill is amortized on a
straight-line basis over periods benefited up to 10 years. Customer lists
represent the portion of the purchase price allocated to the value of the
customer base. Customer lists are amortized on a straight-line basis over
periods benefited up to 5 years. Other intangibles include the portion of the
purchase price allocated to the value of the workforce in place. Workforce in
place is amortized over the period benefited of up to four years.

The Company periodically reviews events and changes in circumstances to
determine whether the recoverability of the carrying value of goodwill should be
reassessed. An impairment assessment is performed whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If the
sum of the expected future undiscounted cash flows is less than the carrying
amount of the asset, a loss is recognized for the difference between the fair
value (determined using expected future discounted cash flows) and the carrying
value of the asset.

e) Fixed assets

Fixed assets are recorded at cost, which includes amounts capitalized for
labor and overhead expended in connection with the design and installation of
operating equipment.

Capitalization of interest

Interest is capitalized as a component of the cost of fixed assets
constructed.

F-54
187
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

Depreciation

Depreciation is computed by the straight-line method over the estimated
useful lives of the assets. Estimated useful lives are as follows:

LAND AND BUILDINGS: LIVES

Freehold buildings 40 years
Leasehold land and buildings up to 40 years or term of lease if less
Leasehold improvements remaining term of lease or expected useful
life of the improvements if less
COMMUNICATIONS NETWORK PLANT AND EQUIPMENT:
Ducting and network construction 10 to 40 years
Electronic equipment and cabling 10 to 20 years
Other network plant and equipment 6 to 25 years
NON-NETWORK PLANT AND EQUIPMENT 3 to 10 years

Freehold land, where the cost is distinguishable from the cost of the
building thereon, is not depreciated.

The Company periodically reviews the recoverability of the carrying value
of these assets using the same methodology that it uses for the evaluation of
its intangible assets.

f) Leased assets

All leases are operating leases and the annual rentals are charged to the
statement of operations on a straight-line basis over the lease term.

g) Cash equivalents

Cash equivalents are short-term highly liquid investments purchased with a
maturity of three months or less. Cash equivalents were L1 at December 31, 2000,
which consisted of bank time deposits.

h) Deferred taxation

Deferred taxes are determined based on the difference between the tax basis
of an asset or liability and its reported amount in the financial statements. A
deferred tax liability or asset is recorded using the enacted tax rates expected
to apply to taxable income in the period in which the deferred tax liability or
asset is expected to be settled or realized. Future tax benefits attributable to
these differences, if any, are recognizable to the extent that realization of
such benefits is more likely than not.

i) Pensions

Defined contribution schemes

Where ntl (CWC Holdings) companies participate in defined contribution
pension schemes for their employees, the pension costs charged to the statement
of operations represent contributions payable during the period.

Defined benefit schemes

The Company also participates in a defined benefit pension scheme operated
by Cable and Wireless plc for certain employees. This scheme has been accounted
for as a multi-employer plan under the provisions of SFAS No 87, "Employers'
Accounting for Pensions". The pension costs charged to the statement of
operations therefore represent contributions payable during the period.

F-55
188
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

j) Loss contingencies

An estimated loss from a loss contingency is recognized through a charge to
income if information available prior to the issuance of the financial
statements indicates that it is probable that an asset had been impaired or a
liability had been incurred at the date of the financial statements and the
amount of loss can be reasonably estimated.

k) Stock based compensation

As permitted by SFAS No 123, "Accounting for Stock-Based Compensation", the
Company applies APB Opinion No 25, "Accounting for Stock Issued to Employees"
and related interpretations in accounting for its stock option plans.

l) Advertising expenditure

The Company charges the cost of advertising to expense as incurred.
Advertising costs were L29 in the seven months ended December 31, 2000.

3 RECENT ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 provides guidance on the recognition, presentation and
disclosure of revenue in financial statements. SAB 101 was required to be
adopted retrospectively to January 1, 2000. The adoption of SAB 101 by the
Company on May 31, 2000 had no effect on revenues or results of operations.

4 FIXED ASSETS

Fixed assets consist of:

2000
------

Cost
Network assets.............................................. L3,090
Non-network assets.......................................... 153
Property.................................................... 76
Construction-in-progress.................................... 160
------
3,479
Accumulated depreciation.................................... (182)
------
Net property and equipment.................................. L3,297
======

Depreciation expense was L182 in the seven months ended December 31, 2000.

Interest totaling L9 for the seven months ended December 31, 2000 that is
directly applicable to the design, construction and installation of cable
television and telecommunications network has been capitalized.

F-56
189
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

5 INTANGIBLE ASSETS

Intangible assets include:

2000
------

Customer lists.............................................. L 35
Workforce in place.......................................... 25
Goodwill.................................................... 5,858
------
5,918
Accumulated amortization.................................... (350)
------
Net book value.............................................. L5,568
======

Amortization expense was L350 in the seven months ended December 31, 2000.

6 AMOUNTS OWED TO AFFILIATES

The long-term amount owed to affiliate of L2,488 is due to ntl Business
Limited ("ntl Business") and is derived from a L2,500 credit agreement entered
into in May 2000. Interest is payable by the Company on the same basis as that
between ntl Business and the lending bank. Interest is payable at least every
six months at LIBOR plus a margin of 2.25% per annum, which is subject to
adjustment based on a ratio of EBITDA to finance charges of the UK Group. The
effective rate of interest at December 31, 2000 was 8.283%. The unused portion
of the facility is subject to a commitment fee of 0.75% payable quarterly, which
is reduced to 0.50% when over 50% of the commitment fee is utilized.

The long-term amount owed to affiliate is due as follows:

Year ending December 31:
2004........................................................ L 90
2005........................................................ 2,398
------
L2,488
======

Short-term amounts owed to affiliates comprise accrued interest on the
above facility of L86 and L61 owed to other affiliates, which is non-interest
bearing and payable on demand.

F-57
190
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

7 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consists of:

2000
----

Interconnect................................................ L88
IT Systems.................................................. 81
Purchase ledger accruals.................................... 48
Other accruals.............................................. 40
Networks and maintenance.................................... 34
Telecommunications expenses................................. 34
Content accruals............................................ 25
Property.................................................... 11
Marketing................................................... 7
----
L368
====

8 LONG-TERM DEBT

Long-term debt consists of:

2000
----

Bank loans.................................................. L15
Less: current portion....................................... 5
---
L10
===

On April 18, 1995, NTL (South Hertfordshire) Limited, a majority owned
subsidiary ("NTL South Herts"), entered into an agreement with two major banks
to provide a L25 revolving credit and term loan credit facility agreement
maturing on December 31, 2003 (the "South Herts Credit Agreement"). On October
18, 1996, L5 was cancelled and the facility reduced to L20.

The credit facility was structured as a revolving facility through December
31, 1997, at which time the facility was converted into a term loan. The
facility is divided into two tranches, denoted Facility A and Facility B, and
the aggregate amount drawn down under both tranches may not exceed L20. Amounts
drawn down under Facility A bear interest at sterling LIBOR plus a margin of
2.5%. The availability of Facility B of L20 is subject to certain conditions
which have been satisfied and amounts drawn down under Facility B bear interest
at sterling LIBOR plus a margin ranging from 0.75% to 2.0% depending on the bank
debt ratio (the ratio of bank debt to annualized operating cash flow) of NTL
South Herts. At December 31, 2000, sterling LIBOR was 6%.

The South Herts Credit Agreement contains certain events of default
including non-payment of amounts due under the South Herts Credit Agreement,
breaches of representations and covenants (including financial ratios) contained
in the South Herts Credit Agreement, cross-default to certain other indebtedness
of NTL South Herts, certain bankruptcy and insolvency events and certain changes
of ownership.

The obligations of NTL South Herts under the South Herts Credit Agreement
are secured by first fixed and floating charges over all of the assets of NTL
South Herts. In addition, there is a pledge of all of the share capital of NTL
South Herts given by NTL (CWC Holdings) as additional security for the facility.

Repayment of the credit facility at December 31, 2000 fell due in twelve
equal quarterly installments. The facility was repaid in full with funding from
NTL Incorporated on February 21, 2001.

F-58
191
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

9 SHAREHOLDERS' EQUITY

At December 31, 2000, capital instruments of a subsidiary undertaking which
were convertible into ordinary shares of ntl (CWC Holdings) were as follows:

PROJECTED
PRINCIPAL NUMBER PERIOD OF
AMOUNT OF SHARES CONVERSION
--------- --------- ----------

3.5% Unsecured Convertible Loan Notes due
2001....................................... L-- 23,176 1999-2001
== ====== =========

The 3.5% Unsecured Convertible Loan Notes are convertible at the option of
the holders.

During the seven months ended December 31, 2000, 5% Unsecured Convertible
Loan Notes due 1995 (as extended) with a convertible value of L2 were converted
into 618,484 ordinary shares.

Share options

Options over shares in NTL Incorporated

Certain employees of the Company participate in the NTL Incorporated stock
option plans. No expense has been recognized in the financial statements because
the exercise price of the option awards were equal to the underlying stock fair
market value on the date of grant.

10 INCOME TAXES

The benefit for income taxes consists of the following:

2000
----

United Kingdom taxation:
Current corporation tax at 30%.............................. L --
Deferred tax................................................ (13)
Adjustment in respect of prior years........................ --
----
Total income tax benefit.......................... L(13)
====

The effective tax rate for the period ended December 31, 2000 is 12%. The
current period rate is lower than the statutory tax rate of 30% because the
companies within ntl (CWC Holdings) were loss making in the period and deferred
tax assets for such losses were not recognized in full.

F-59
192
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

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

2000
----

Deferred tax liabilities:
Depreciation................................................ L333
Intangibles................................................. 16
Capitalized interest........................................ 3
----
Total deferred tax liabilities.............................. 352
----
Deferred tax assets:
Net operating loss carryforwards............................ 570
Purchase accounting liabilities............................. 104
Other....................................................... 17
----
Total deferred tax assets................................... 691
Valuation allowance for deferred tax assets................. (339)
----
Net deferred tax assets..................................... 352
----
Net deferred tax liabilities................................ L--
====

At December 31, 2000, the Company had a valuation allowance against its
deferred tax assets to the extent it was more likely than not that such assets
would be realized in the future. At December 31, 2000, the valuation allowance
includes approximately L283, which, if realized, would be accounted for as a
reduction to goodwill.

At December 31, 2000 the group had United Kingdom net operating loss
carryforwards of approximately L1,800 that have no expiry date. Pursuant to
United Kingdom law, these net operating losses are only available to offset
income of the separate entity that generated the loss. A portion of the United
Kingdom net operating loss carryforwards belong to dual resident companies, of
which US net operating loss carryforwards amount to approximately $1,000. For US
tax purposes these operating loss carryforwards will expire in varying amounts
between 2010 and 2020.

The reconciliation of income tax computed at United Kingdom statutory rates
to income tax benefit is as follows:

2000
-----

Benefit at statutory rate................................... L(167)
Losses with no benefit...................................... 154
-----
Income tax benefit.......................................... L(13)
=====

11 RESTRUCTURING COSTS

Restructuring costs relate to NTL's announcement in November 2000 of its
completion of a strategic review. Based on a comprehensive review of the
enlarged group following the acquisition of ntl (CWC Holdings) and the
integration of several other acquired businesses, NTL identified significant
efficiency improvements and cost savings. The restructuring provision,
representing the Company's share of the group provision, includes employee
severance and related costs of L6 for approximately 437 employees to be made
redundant and lease termination costs of L1. None of the provision had been
utilized through December 31, 2000.

F-60
193
NTL (CWC HOLDINGS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEVEN MONTHS ENDED DECEMBER 31, 2000
(EXPRESSED IN MILLIONS OF POUNDS STERLING)

12 EMPLOYEE BENEFIT PLANS

During the seven months ended December 31, 2000, ntl (CWC Holdings)
participated in a pension plan operated by Cable and Wireless plc, the Company's
former parent. The plan is a defined benefit scheme whereby retirement benefits
are based on the employees' final remuneration and length of service, and is
funded through a separate trustee administered scheme. Contributions to the plan
are based on pension costs for all members of the plan across the Cable and
Wireless plc group and are made in accordance with the recommendations of
independent actuaries who value the plan at regular intervals, usually
triennially. The last valuation currently available relates to the position of
the scheme as at March 31, 2000. The total contributions payable to the Cable
and Wireless plc pension plan was L2.

The Company also operates several defined contribution pension plans. The
total contributions payable to these plans in the seven months ended December
31, 2000 amounted to L2. All permanent employees are eligible to join and
contributions are determined as a percentage of salary.

On January 1, 2001 the Company established a new approved pension plan and
employees of ntl (CWC Holdings) who were active members of the Cable and
Wireless plc plan were invited to join the new ntl (CWC Holdings) plan and to
transfer their accrued rights to it. Employees of the Company who were active
members of ntl (CWC Holdings) pension plans were also invited to join.

13 LEASES

Future minimum lease payments under non-cancellable operating leases as of
December 31, 2000 are as follows:

Land and buildings
2001........................................................ L8
2002........................................................ 8
2003........................................................ 8
2004........................................................ 8
2005........................................................ 8
Thereafter.................................................. 41
---
Total....................................................... L81
===
Other assets
2001........................................................ L3
2002........................................................ 3
2003........................................................ 3
2004........................................................ 2
---
Total....................................................... L11
===

The rental expense recorded in the statement of operations was L9 in the
seven months ended December 31, 2000.

14 COMMITMENTS AND CONTINGENCIES

The Company is contracted to IBM under an IT outsource agreement. At
December 31, 2000, the total outstanding commitment was L575. The IT outsource
agreement is for a period expiring in September 2008. Other capital commitments
at December 31, 2000 amounted to L62.

F-61
194

CWC CONSUMERCO, A DIVISION
OF NTL (CWC) LIMITED
(FORMERLY CABLE & WIRELESS
COMMUNICATIONS LIMITED)
"CONSUMERCO"

REPORT AND FINANCIAL STATEMENTS AS OF MARCH 31, 1999
AND 2000 AND FOR THE THREE YEARS ENDED MARCH 31, 2000

F-62
195

FINANCIAL STATEMENTS OF CONSUMERCO

REPORT OF INDEPENDENT AUDITORS

TO THE DIRECTORS OF NTL INCORPORATED

We have audited the accompanying financial statements of CWC ConsumerCo
("ConsumerCo") as of March 31, 1999 and 2000 and for the three years ended March
31, 2000 which have been prepared on the bases and in accordance with the
accounting policies set out therein under the historical cost convention.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The Directors of ntl (CWC) Limited are responsible for the preparation of
the financial statements in accordance with the applicable United Kingdom law
and accounting standards. Our responsibilities, as independent auditors, are
established by the United Kingdom Auditing Practices Board and by our
profession's ethical guidance.

BASIS OF OPINION

We conducted our audit in accordance with generally accepted auditing
standards in the United States. An audit includes examination, on a test basis,
of evidence relevant to the amounts and disclosures in the financial statements.
It also includes an assessment of the significant estimates and judgements made
by the Directors in the preparation of the financial statements and of whether
the accounting policies are appropriate to the circumstances of ConsumerCo,
consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.

OPINION

In our opinion, the financial statements referred to above present fairly,
in all material respects, the state of affairs of ConsumerCo as at March 31,
1999 and 2000 and of ConsumerCo's results and cash flows for each of the three
years ended March 31, 2000 in accordance with the bases of preparation detailed
in the accompanying financial statements, applied using accounting principles
generally accepted in the United Kingdom.

RECONCILIATION TO US GAAP

Accounting practices used by ConsumerCo in preparing the accompanying
financial statements conform with generally accepted accounting principles in
the United Kingdom, but do not conform with generally accepted accounting
principles in the United States. A description of these differences and a
reconciliation of net loss and shareholders' equity to generally accepted
accounting principles in the United States is set out in Note 35.

Arthur Andersen
Chartered Accountants

London
United Kingdom
6th October 2000

F-63
196
CONSUMERCO

COMBINED PROFIT & LOSS ACCOUNT
FOR THE YEARS ENDED MARCH 31

NOTE 2000 1999 1998
---- ---- ---- ----
LM LM LM

TURNOVER
Continuing operations...................................... 694 688 104
Acquisitions............................................... -- -- 446
---- ---- ----
4 694 688 550
---- ---- ----
OPERATING COSTS
Outpayments and other cost of sales........................ 5 (269) (251) (188)
---- ---- ----
GROSS PROFIT............................................... 425 437 362
Millennium and NCNC costs.................................. 5,6 (12) (16) (2)
Other operating expenses (net)............................. 5 (270) (241) (197)
Depreciation and amortisation.............................. 5,7 (156) (135) (103)
---- ---- ----
OPERATING (LOSS)/PROFIT
Continuing operations...................................... (13) 45 49
Acquisitions............................................... -- -- 11
---- ---- ----
TOTAL OPERATING (LOSS)/PROFIT.............................. (13) 45 60
Costs of fundamental reorganisation........................ 10 -- -- (96)
Release of surplus fundamental reorganisation provision.... 2 -- --
Profit on disposal as tangible fixed assets................ 1 -- --
Net interest payable....................................... 11 (190) (179) (121)
---- ---- ----
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION................ 7 (200) (134) (157)
Taxation................................................... 12 34 -- --
---- ---- ----
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION................. (166) (134) (157)
Minority interests......................................... 1 (1) --
---- ---- ----
NET LOSS -- TRANSFER TO RESERVES........................... (165) (135) (157)
---- ---- ----

As more fully explained in Note 2, ConsumerCo did not operate as a separate
legal or reporting entity throughout the period. Accordingly the above profit
and loss account may not be representative of its future results.

All operations are continuing.

There are no recognised gains or losses other than those reflected in the
combined profit and loss account and accordingly, no statement of total
recognized gains and losses is presented.

The accompanying notes are an integral part of this combined profit and
loss account.

F-64
197
CONSUMERCO

COMBINED BALANCE SHEET
AS AT MARCH 31

NOTE 2000 1999
---- ------ ------
LM LM

FIXED ASSETS
Intangible assets........................................... 13 8 8
Tangible assets............................................. 14 3,167 2,860
------ ------
3,175 2,868
CURRENT ASSETS
Debtors:
Due within one year....................................... 15 131 67
Due after one year........................................ 15 68 69
Debtors within receivables securitisation................... 16
Gross debtors............................................. 56 85
Non-returnable proceeds................................... (29) (62)
27 23
Cash at bank and in hand.................................... 87 127
------ ------
313 286
CREDITORS: amounts falling due within one year.............. 17 (826) (487)
------ ------
Net current liabilities..................................... (513) (201)
------ ------
TOTAL ASSETS LESS CURRENT LIABILITIES....................... 2,662 2,667
CREDITORS: amounts falling due after more than one year..... 18 (3,075) (2,916)
PROVISIONS FOR LIABILITIES AND CHARGES...................... 19 (6) (14)
NET LIABILITIES............................................. (419) (263)
CAPITAL AND RESERVES
Called up share capital..................................... 21 748 746
Share premium............................................... 22 17 9
Other reserves.............................................. 22 (1,199) (1,034)
------ ------
Equity shareholders' funds.................................. (434) (279)
Equity minority interest.................................... 15 16
------ ------
(419) (263)

The accompanying notes are an integral part of this combined balance sheet.

APPROVED AND SIGNED ON BEHALF OF THE BOARD

6TH OCTOBER 2000

F-65
198
CONSUMERCO

COMBINED CASH FLOW STATEMENT
FOR THE YEARS ENDED MARCH 31

NOTE 2000 1999 1998
---- ---- ---- ------
LM LM LM

Net cash (outflow)/inflow before fundamental
reorganisation costs and IT outsource................... (89) 220 386
Outflow related to fundamental reorganisation costs and IT
outsource............................................... (6) (41) (30)
---- ---- ------
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES....... 27 (95) 179 356
---- ---- ------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received......................................... 5 15 10
Interest paid............................................. (224) (227) (144)
---- ---- ------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE.................................... (219) (212) (134)
---- ---- ------
TAXATION
U.K. Corporation tax paid................................. -- -- (16)
---- ---- ------
TAX PAID.................................................. -- -- (16)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets......................... (452) (375) (529)
Interest bearing deposit (net of VAT)..................... -- (109) --
Sale of tangible fixed assets............................. 19 57 --
---- ---- ------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT.............................................. (433) (427) (529)
---- ---- ------
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertakings, net of cash
acquired................................................ 28 -- -- 88
Disposal of business...................................... 28 -- 4 --
---- ---- ------
NET CASH INFLOW FROM ACQUISITIONS AND DISPOSALS........... -- 4 88
---- ---- ------
EQUITY DIVIDENDS PAID
Ordinary dividends paid................................... -- -- (9)
---- ---- ------
CASH OUTFLOW BEFORE FINANCING............................. (747) (456) (244)
---- ---- ------
FINANCING
Increase in bank and other loans.......................... 932 669 3,257
Increase in share capital................................. 1 -- --
Net proceeds from issue of loan notes..................... -- 433 1,585
Repayment of debt......................................... (222) (736) (4,448)
Capital element of finance lease rental payments.......... (4) (12) (6)
---- ---- ------
(DECREASE)/INCREASE IN CASH............................... 29 (40) (102) 144
==== ==== ======

The accompanying notes are an integral part of this combined cash flow
statement.

F-66
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CONSUMERCO

RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
FOR THE YEARS ENDED MARCH 31

NOTE 2000 1999 1998
----- ----- ---- ------
LM LM LM

Loss for the financial year............................... (165) (135) (157)
Share issues.............................................. 21,22 10 10 1,957
Goodwill acquired and written off during the year......... -- -- (2,006)
Other movements on reserves............................... -- (31) (7)
----- ---- ------
Net decrease in equity shareholders' fund................. (155) (156) (213)
Equity shareholders' funds at beginning of year........... (279) (123) 90
----- ---- ------
EQUITY SHAREHOLDERS' FUNDS AT END OF YEAR................. (434) (279) (123)
===== ==== ======

The accompanying notes are an integral part of this reconciliation of movements
in equity shareholders' funds.

F-67
200

CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS

1 BACKGROUND

On July 26, 1999, Cable and Wireless plc ("Cable and Wireless"), NTL
Incorporated ("NTL") and Cable & Wireless Communications (now ntl (CWC) Limited
and hereafter "ntl (CWC)") announced that they had agreed to propose a
restructuring of ntl (CWC) to its shareholders. The restructuring was agreed by
the shareholders, and completed on May 30, 2000.

As part of the restructuring, ntl (CWC), which was a 52.8% owned subsidiary
of Cable and Wireless was separated into its residential cable, business cable,
indirect residential telephony, residential internet and digital television
development and services businesses, referred to as ConsumerCo, and its
corporate, business, internet protocol and wholesale operations, referred to as
CWC Data Co. NTL indirectly acquired all of ConsumerCo and Cable and Wireless
indirectly acquired the interest in CWC DataCo. which was not already
attributable to it, thereby achieving 100% ownership of CWC DataCo. These two
acquisitions, collectively, are referred to as the "Transaction".

2 BASIS OF PREPARATION

a) Structure of financial statements

The financial statements, have been prepared on the basis set out within
the "Basis of preparation" below. In the financial statements, ntl (CWC) and its
subsidiary undertakings, as appropriate, are referred to as "ntl (CWC) group".

The activities of ConsumerCo were carried out as an integral part of the
ntl (CWC) group and as such the operations comprising ConsumerCo were carved out
from the financial statements of the ntl (CWC) group. Consequently, certain
revenues, costs, assets and liabilities previously reported within legal
entities, comprising the ntl (CWC) group, have been allocated to ConsumerCo to
reflect the assets and liabilities attributable to ConsumerCo and the results of
such operations for the periods shown.

As a result of the carve out, the combined balance sheet presents an "Other
reserves" balance for ConsumerCo, consistent with the fact that ConsumerCo did
not operate as a standalone group. Accordingly, the net liabilities position is
presented with an equal and opposite equity shareholders' funds figure after
including this "Other reserves" balance which represents the investment in
ConsumerCo held by the ntl (CWC) group.

The financial statements have been prepared specifically in connection with
the acquisition of ConsumerCo by NTL and consequently do not contain certain
reports, disclosures or other matters that would be required under the UK
Companies Act 1985.

Further, the financial statements do not necessarily reflect the terms of
the Transaction agreement referred to in Note 1 above.

b) Basis of preparation

Revenue

All ConsumerCo's revenues are specifically identifiable from the total
revenues of the ntl (CWC) group.

Specifically attributable costs, assets and liabilities

Most of the costs, assets and liabilities reflected in the financial
statements are specifically identifiable to ConsumerCo. Such specific costs,
assets and liabilities have been allocated directly to ConsumerCo.

- Outpayments

Outpayments and other cost of sales figures represent third party costs
incurred by ConsumerCo.

F-68
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Allocation of indirectly attributable costs, assets and liabilities

Where costs, assets and liabilities were incurred for the benefit of
ConsumerCo, but could not be specifically identified, an allocation has been
made.

Indirectly attributable costs, assets and liabilities have been allocated
using bases which the Directors believe provide an appropriate mechanism to
carve out ConsumerCo's financial results for the three years ended March 31,
2000 and financial position as at March 31, 1999 and 2000, from the ntl (CWC)
group financial statements.

Costs

Particular indirectly attributable costs have been allocated consistently
on the following bases unless otherwise stated:

- Net operating expenses -- three years ended March 31, 2000

Net operating expenses consist primarily of network operations and central
ntl (CWC) group support costs, principally those of the Finance and IT
departments. A significant element of these costs are staff related.

- Network operations costs have been allocated based upon the relative
usage of the ntl (CWC) group telecommunications network by those
products and services provided by ConsumerCo.

- Staff and related costs have been allocated based upon management's
estimation of the relative proportion of individuals' time providing
services to ConsumerCo. The Directors believe that this provides a
fair allocation of costs to ConsumerCo.

- IT department costs relating to general IT support and services have
been allocated in the proportion of ConsumerCo headcount, including
allocated headcount, to total ntl (CWC) group headcount. Specific IT
projects and systems have been allocated on the basis of estimated
usage by ConsumerCo.

- Finance department costs have been allocated in the proportion of
ConsumerCo headcount (including allocated headcount) to total ntl
(CWC) group headcount. In the year ended March 31, 1998 these costs
were allocated on the basis of revenue due to the lack of
retrospective information regarding Finance department headcount. The
Directors believe that despite the different bases applied the overall
allocation is appropriate.

- Facilities and other related costs have been allocated based on
relative usage by ConsumerCo.

- Depreciation

Depreciation for the three years ended 31 March 2000 has been allocated
consistent with the allocation of fixed assets to ConsumerCo.

Assets and liabilities

Particular indirectly attributable assets and liabilities have been
consistently allocated on the following bases as at March 31, 1999 and 2000
unless otherwise stated:

- Fixed assets

ConsumerCo has allocated fixed asset additions and disposals on the basis
of management's estimate of relative usage of those assets. The Directors
believe this fairly presents the historic asset base attributable to ConsumerCo.

F-69
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

- Trade creditors

Trade creditor amounts relate to operating and capital expenditure. Where
not specifically attributable, such amounts have been allocated based on the
allocation to ConsumerCo of net operating expenses and capital expenditure.

- Debt

Substantially all ntl (CWC)'s debt has been allocated to ConsumerCo on the
basis that it is primarily used to fund ConsumerCo activities. See Note 18.

- Other assets and liabilities

Prepayments and accrued income and accruals and deferred income amounts are
attributable to specific ConsumerCo cost centres and where not specifically
attributable, have been allocated based on the allocation of the net operating
expenses to each respective cost centre.

Limitations on use of financial statements

Because of the allocations referred to above and the proposed changes in
the structure and financing of ConsumerCo going forward, these financial
statements should not be relied upon as being representative of the future
financial position or performance of ConsumerCo. In particular:

- Outpayments for all periods presented are not representative of those
amounts that will be incurred by ConsumerCo in the future as it will need
to enter into arms' length arrangements for the carriage and delivery of
telecommunications traffic and services either with CWC DataCo and with
other third parties.

- The operating costs attributed to ConsumerCo for the year ended March 31,
2000 are not representative of the costs it will incur after the proposed
transaction as they represent the carve out of costs incurred by the ntl
(CWC) group, which was managed as an integrated business. The activities
of ConsumerCo on a stand alone basis may be restructured following the
Transaction which may result in certain costs being duplicated, other
costs being avoided altogether and yet other costs being incurred. For
this reason the reported result for the year ended March 31, 2000 is not
representative of the amounts to be incurred by ConsumerCo after the
Transaction.

- In view of the refinancing and corporate restructuring of the businesses,
the debt, interest and taxation figures included in these financial
statements are not representative of the amounts of those items for
ConsumerCo following the Transaction.

3 STATEMENT OF ACCOUNTING POLICIES

The financial statements have been prepared applying ConsumerCo's
accounting policies and no adjustments have been made with respect to any
differences between these and NTL's accounting policies.

The principal accounting policies of ConsumerCo, which have been applied
consistently throughout the three years ended March 31, 2000, unless expressly
stated otherwise, are as follows:

a) Basis of accounting

The financial statements have been prepared applying accounting principles
generally accepted in the United Kingdom and on the historical cost basis.

The results of subsidiary undertakings acquired or disposed of during the
year are included from the date of their acquisition or up to the date of their
disposal, except for the acquisition of Mercury Communications

F-70
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Limited which has been merger accounted for under the group reorganisation
provisions of FRS 6 "Acquisitions and mergers".

Intercompany sales and profits are eliminated fully.

b) Turnover and revenue recognition

Turnover, which excludes value added tax, represents the amount receivable
in respect of services provided to customers in each year and is accounted for
on the accruals basis. At the end of each year adjustments are recorded to defer
revenue with respect to services invoiced in advance and to accrue for unbilled
services.

c) Interconnection with other operators

When operators of other national and international telecommunications
networks carry traffic, the charges incurred are matched with the associated
revenues. All charges payable to, or by, overseas telecommunications
administrations are negotiated separately and are subject to continuous review.

Charges payable by ConsumerCo to British Telecommunications plc, referred
to as BT, for the conveyance of traffic and connections to the BT network are
subject to government regulation in the form of a determination by OFTEL, the
Office of Telecommunications. During 1998, the basis for calculation of these
charges changed from one based on the fully allocated historic cost of providing
the delivery mechanism on their network, to one based upon the long-run
incremental cost of providing that service.

Up until September 30, 1997, OFTEL undertook a review, in the form of a
determination, after the end of each financial year, and for the half year to
September 30, 1997, to assess the bases used for the calculation of the charges
made in that year. Amendments were backdated to take effect from April 1, in the
year under review, but were accounted for in subsequent financial periods.

Since October 1, 1997, the charging mechanism has been designed to reflect
the commercial considerations surrounding a competitive market. OFTEL has set a
framework of controls within which BT will have the price flexibility to set its
own charges. The degree of control depends on the competitiveness of the
services concerned.

d) Goodwill

With effect from April 1, 1998, goodwill arising on the acquisition of
subsidiary undertakings and businesses, being the difference between the fair
value of the purchase consideration and the fair value attributed to the
identifiable assets and liabilities acquired, is capitalised and amortised in
equal annual instalments through the profit and loss account over the ntl (CWC)
Directors' estimate of its useful economic life.

ConsumerCo periodically reviews events and changes in circumstances to
determine whether the recoverability of the carrying value of goodwill should be
reassessed. An impairment assessment is performed whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.

As permitted under the transitional provisions in FRS 10, "Goodwill and
Intangible Assets", goodwill on acquisitions prior to April 1, 1998 is dealt
with as a movement on reserves. Where subsidiary undertakings are wholly or
partially disposed of during the year, goodwill that was written off to reserves
or has not been amortised through the profit and loss account is charged to the
profit and loss account.

e) Tangible fixed assets and depreciation

Tangible fixed assets are recorded at cost, which includes materials,
direct labour and other incremental costs applicable to the design, construction
and connection of the telecommunications and cable television networks and
equipment. Other incremental costs capitalised include all costs of those
departments responsible solely for design, construction and connection. Where
departments spend only part of their time on functions directly

F-71
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

connected with design, construction and connection, the relevant proportion of
total costs is capitalised. Costs which are initially capitalised in projects
under construction where the projects do not become operational are written off
to the profit and loss account, once it is determined that the project will not
become operational.

Costs of departments relating to revenue related operations such as direct
selling, marketing and other customer related departments, are not capitalised.

Capitalisation of interest

Interest is capitalised as part of the cost of separately identifiable
major capital projects, up to the time that such projects are substantially
complete. The amount of interest capitalised is calculated as the capitalisation
rate multiplied by the weighted average carrying amount of major capital
projects under construction during the period.

Depreciation

Depreciation is provided on the difference between the cost of tangible
fixed assets and the estimated residual value in equal annual instalments over
the estimated useful lives of the assets. These lives are as follows:

LAND AND BUILDINGS: LIVES

freehold buildings 40 years
leasehold land and buildings up to 40 years or term of lease if less
leasehold improvements remaining term of lease or expected useful
life of the improvements if less
COMMUNICATIONS NETWORK PLANT AND EQUIPMENT:
ducting and network construction 10 to 40 years
electronic equipment and cabling 10 to 20 years
other network plant and equipment 6 to 25 years
NON-NETWORK PLANT AND EQUIPMENT 3 to 10 years

Freehold land, where the cost is distinguishable from the cost of the
building thereon, is not depreciated.

After a portion of the network is fully constructed and released to
operations, depreciation of the network commences either when target rates of
penetration are achieved or no later than one year after the release date.

f) Leased Assets

Where assets are financed by leasing agreements that give rights
approximating to ownership, the assets are treated as if they had been purchased
outright. The amount capitalised is the present value of the minimum lease
payments payable during the lease term. The corresponding leasing commitments
are shown as obligations to the lessor. Lease payments are split between capital
and interest elements using the annuity method. Depreciation on the relevant
assets and interest are charged to the profit and loss account.

All other leases are operating leases and the annual rentals are charged to
operating profit on a straight line basis over the lease term.

g) Fixed asset investments

Fixed asset investments are stated at cost less provisions for impairment.
Any impairment is charged to the profit and loss account in the year in which it
is identified.

F-72
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

h) Deferred taxation

The charge for taxation is based on the results for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. ConsumerCo provides for
deferred tax unless there is a reasonable probability that the liability will
not arise in the foreseeable future. Where deferred tax is provided, the
liability method is used. No deferred tax assets are recognised in respect of
accumulated tax losses.

i) Pensions

Defined contribution schemes

Where ConsumerCo companies through the ntl (CWC) group participate in
defined contribution pension schemes for their employees, the pension costs
charged to the profit and loss account represent contributions payable during
the year.

Defined benefit schemes

ConsumerCo through the ntl (CWC) group also participates in a defined
benefit pension scheme operated by Cable and Wireless for certain employees. The
regular cost of providing benefits is charged to operating profit over the
service lives of the members of the scheme so as to achieve a constant
percentage of pensionable pay.

j) Foreign currencies

Transactions are translated into sterling at the rate of exchange ruling on
the date of the transaction. All outstanding monetary assets and liabilities
denominated in foreign currency are retranslated at the rates ruling at the
balance sheet date. Any exchange differences arising are dealt with through the
profit and loss account.

The results of overseas operations are translated at the average rate of
exchange during the period and their balance sheets at the rate ruling at the
balance sheet date. Exchange differences arising on translation of the opening
net assets and results of overseas operations are dealt with through reserves.
All other exchange differences are included in the profit and loss account.

k) Forward exchange contracts and interest rate swaps

ConsumerCo through the ntl (CWC) group uses financial instruments,
including forward exchange contracts and interest rate swaps, in its management
of exchange rate and interest rate exposures. While these instruments are
subject to the risk of loss from changes in exchange rates and interest rates,
these losses would generally be offset by gains in the related exposures.

Financial instruments are only used to hedge underlying economic exposures.
ConsumerCo does not speculate in derivative financial instruments.

Realised and unrealised gains and losses on forward contracts which hedge
firm third party commitments are recognised in the profit and loss account in
the same period as the gain or loss on the underlying transaction. Net interest
paid or received on interest rate swaps is included in interest expense on an
accruals basis.

l) Capital instruments and financing costs

Capital instruments are accounted for and classified as equity or
non-equity share capital, equity or non-equity minority interests or debt
according to their form. The costs of issue of non-equity and debt capital
instruments are charged to the profit and loss account on an annual basis over
the life of the instruments at a constant rate on the carrying amount. Where
permitted by law, a corresponding amount is subsequently

F-73
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

transferred from the share premium account to retained earnings. The cost of
issue of equity instruments is written off against the share premium account.

m) Provisions

ConsumerCo accounts for provisions in accordance with FRS12 "Provisions and
Contingencies". Consequently, provisions are only recognised when ConsumerCo has
a legal or constructive obligation to transfer economic benefits as a result of
past events. To the extent that the provisions are surplus to requirements they
are released in the profit and loss account.

n) IT outsource

ConsumerCo through the ntl (CWC) group has entered into a 10 year contract
for the provision of commercial IT services. Certain costs are paid in advance
of the benefit received. These costs are deferred and amortised over the period
during which benefit is derived. The charge for the provision of the
consolidated billing system is amortised over the expected levels of billing
activity.

o) Millennium and National Code Number Change costs

Costs incurred in modifying existing software to achieve Year 2000
compliance are normally written off to the profit and loss account in the period
in which they are incurred. However, to the extent that any expenditure not only
achieves compliance, but also represents an enhancement of an asset's service
potential, it is capitalised and depreciated over the estimated remaining useful
life of the asset, in accordance with Urgent Issues Task Force Abstract 20,
"Year 2000: Accounting and Disclosures".

Costs incurred in modifying equipment in preparation for National Code
Number Changes are normally written off to the profit and loss account in the
period in which they are incurred. However, to the extent that any expenditure
not only achieves the necessary modification but also represents an enhancement
of an asset's service potential, it is capitalised and depreciated over the
estimated remaining useful life of the asset.

4 TURNOVER

Turnover derives from:

- local, national and international telecommunications and cable television
services; and

- the sale and rental of telecommunications equipment.

Turnover comprised the following:

2000 1999 1998
---- ---- ----
LM LM LM

Consumer Markets
Direct telephony.......................................... 279 292 219
Indirect telephony........................................ 93 102 104
Television................................................ 253 222 172
Business Markets............................................ 69 72 55
--- --- ---
Total Turnover.............................................. 694 688 550
=== === ===

The ntl (CWC) Directors consider this to be a single class of business and
accordingly no segmental analysis of operating profit or loss or net assets is
shown. In the year ended March 31, 2000 all of the turnover was generated by
operations in the United Kingdom (1999: 100% and 1998: 100%).

F-74
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5 COST OF SALES AND OPERATING EXPENSES

1998
2000 1999 --------------------------------
TOTAL TOTAL CONTINUING ACQUISITION TOTAL
----- ----- ---------- ----------- -----
LM LM LM LM LM

Outpayments and other cost of sales.............. 269 251 36 152 188
Other operating expenses (net)................... 270 241 19 178 197
Millennium and NCNC costs........................ 12 16 -- 2 2
Depreciation and amortisation.................... 156 135 2 101 103
=== === === === ===

All activities in the years ended March 31, 1999 and 2000 were continuing.

6 MILLENNIUM AND NATIONAL CODE NUMBER CHANGE COSTS

Millennium costs

Millennium costs comprise the costs allocated to ConsumerCo through the ntl
(CWC) group Year 2000 Programme. This includes ConsumerCo's share of the costs
of making software and systems compliant, upgrading rented customer premises
equipment, purchasing new software and employing external consultants and
advisors, as well as the costs of ConsumerCo employees working on the Year 2000
Programme. A cumulative total of L30 million has been incurred to date, of which
L1 million has been capitalised and L29 million has been written off to the
profit and loss account.

National Code Number Change Costs

National Code Number Change costs are being incurred by ConsumerCo through
the ntl (CWC) group, in relation to the change in national code numbers which
has been initiated by OFTEL. National dialling codes are being reorganised to
provide additional UK numbering capacity required for long term growth in new
numbers for fixed and mobile telephones, fax, pager, and internet use.

Costs of L2 million had been incurred during the year in relation to
National Code Number Change, which were capitalised (1999: L1 million expensed
in the profit and loss account). The National Code Number Change programme is
expected to take a further year to complete. Total costs are expected to be L5
million of which L3 million is expected to relate to capital expenditure, the
balance being written off to the profit and loss account as incurred.

7 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION

Loss on ordinary activities before taxation is stated after charging:

2000 1999 1998
---- ---- ----
LM LM LM

Depreciation of owned tangible fixed assets................. 144 122 91
Depreciation of fixed assets held under finance leases...... 12 12 12
Amortisation of goodwill.................................... -- 1 --
Operating lease payments -- hire of plant and machinery..... -- 2 2
Operating lease payments -- other........................... 5 8 9
Management service fees payable (see Note 33)............... -- 1 3

F-75
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

8 EMPLOYEES

In 2000 the average monthly number of persons working within ConsumerCo was
5,262 (1999: 5,130 and 1998: 5,407).

The aggregate remuneration and associated costs of ConsumerCo employees
were:

2000 1999 1998
---- ---- ----
LM LM LM

Salaries and wages.......................................... 142 126 106
Social security costs....................................... 11 11 10
Pension costs of defined benefit scheme..................... 3 3 3
Pension costs of defined contribution schemes............... 3 3 2
--- --- ---
Total staff costs........................................... 159 143 121
Less: Staff costs capitalised within network fixed assets... (79) (47) (34)
--- --- ---
80 96 87
=== === ===

Details of the pension schemes are given in Note 9.

9 PENSIONS

ConsumerCo, through ntl (CWC), participates in a pension scheme operated by
Cable and Wireless. The scheme is a defined benefit scheme whereby retirement
benefits are based on the employees' final remuneration and length of service,
and is funded through a separate trustee administered scheme. Contributions to
the scheme are based on pension costs for all members of the scheme across the
Cable and Wireless group and are made in accordance with the recommendations of
independent actuaries who value the scheme at regular intervals, usually
triennially. The last valuation currently available relates to the position of
the scheme as at March 31, 1999. Full details relating to the pension scheme are
disclosed in the financial statements of Cable and Wireless.

ConsumerCo also operates several defined contribution pension plans.

ConsumerCo will establish a new exempt approved pension scheme and
employees allocated to ConsumerCo who are active members of the Cable and
Wireless superannuation fund will be invited to join the new ConsumerCo scheme
and to transfer their accrued rights to it. Employees allocated to ConsumerCo
who are active members of ntl (CWC) pension schemes will, for the time being,
remain in those schemes.

10 COSTS OF FUNDAMENTAL REORGANISATION

Following the formation of the ntl (CWC) group on April 28, 1997, the
nature and focus of operations of the constituent companies were fundamentally
reorganised. Costs of L96 million have been allocated to ConsumerCo and include
branding, employee related costs such as redundancies and property
rationalisations.

The inclusion of the costs of fundamental reorganisation had no material
impact on the tax charge for 2000 or 1999 or 1998.

F-76
209
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

11 NET INTEREST PAYABLE

2000 1999 1998
---- ---- ----
LM LM LM

Interest receivable and similar income:
Deposits and short term loan interest....................... 4 8 8
Funds placed with parent undertaking........................ -- 6 1
---- ---- ----
4 14 9
==== ==== ====
Interest payable:
Finance charges on leases................................... (6) (9) (7)
Bank loans and overdrafts................................... (70) (89) (90)
Loan notes.................................................. (146) (132) (58)
Funds borrowed from parent undertaking...................... (2) -- (1)
---- ---- ----
(224) (230) (156)
Less: interest capitalised within network fixed assets (Note
14)....................................................... 30 37 26
---- ---- ----
(194) (193) (130)
---- ---- ----
Net interest payable........................................ (190) (179) (121)
==== ==== ====

12 TAXATION

The tax credit comprises:

2000 1999 1998
---- ---- ----
LM LM LM

United Kingdom taxation:
Current corporation tax at 30% (1999: 31%, 1998: 31%)....... 34 -- --
Deferred tax................................................ -- -- --
Adjustment in respect of prior years........................ -- -- --
--- --- ---
Tax credit on profit on ordinary activities................. 34 -- --
=== === ===

If deferred tax had been provided in 2000 on a full provision basis, there
would have been no change in the tax charge for the year (1999: no change, 1998:
no change). The effective tax rate for the year ended March 31, 2000 is 0%
(1999: 0%, 1998: 0% after costs of fundamental reorganisation). This rate
differs from the statutory tax rate of 30% because the companies within
ConsumerCo were loss making in the period and deferred tax assets for such
losses were not recognised in full. The tax credit in the year ended March 31,
2000 reflects a payment of L34 million from CWC DataCo for losses surrendered by
way of group relief.

F-77
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

13 INTANGIBLE FIXED ASSETS

GOODWILL
--------
LM

COST
At April 1, 1999............................................ 9
Additions................................................... --
---
At March 31, 2000........................................... 9
---
AMORTISATION
At April 1, 1999............................................ 1
Charge for the year......................................... --
---
At March 31, 2000........................................... 1
---
Net book value at March 31, 2000............................ 8
---
Net book value at March 31, 1999............................ 8
===

Goodwill arising on the acquisition of Two Way TV Limited is amortised over
20 years, which is the ntl (CWC) Directors' estimate of its economic useful
life.

14 TANGIBLE FIXED ASSETS

LAND NETWORK CABLE, NON-NETWORK
AND PLANT AND PLANT AND
BUILDINGS EQUIPMENT EQUIPMENT TOTAL
--------- -------------- ----------- -----
LM LM LM LM

COST
At April 1, 1999............................ 53 3,020 14 3,087
Additions................................... 1 423 73 497
Disposals................................... -- (8) (18) (26)
--- ----- --- -----
At March 31, 2000........................... 54 3,435 69 3,558
--- ----- --- -----
DEPRECIATION
At April 1, 1999............................ 4 218 5 227
Charge for the year......................... 5 130 21 156
Transfers................................... -- 16 -- 16
Disposals................................... -- (3) (5) (8)
--- ----- --- -----
At 31 March 2000............................ 9 361 21 391
--- ----- --- -----
NET BOOK VALUE AT
March 31, 2000.............................. 45 3,074 48 3,167
--- ----- --- -----
March 31, 1999.............................. 49 2,802 9 2,860
=== ===== === =====

F-78
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2000 1999
---- ----
LM LM

The net book value of land and buildings comprised:
Freehold.................................................. 19 19
Long leasehold............................................ 2 2
Short leasehold........................................... 24 28
--- ---
45 49
=== ===

Interest totalling L30 million (1999: L37 million) for the year ended March
31, 2000 that is directly applicable to the design, construction and
installation of ConsumerCo's cable television and telecommunications network has
been capitalised within additions to network assets. Accumulated interest
capitalised included in the total cost of tangible fixed assets at March 31,
2000 amounted to L93 million (1999: L63 million).

Included in the net book value of Network cable, plant and equipment is L83
million in respect of assets held under finance leases and similar hire purchase
contracts (1999: L95 million). Accumulated depreciation on these assets is L42
million (1999: L30 million) and the charge for the year is L12 million (1999:
L12 million). Network cable, plant and equipment includes L127 million (1999:
L118 million) in respect of assets not yet in service and consequently upon
which depreciation has not been charged.

15 DEBTORS

2000 1999
---- ----
LM LM

DUE WITHIN ONE YEAR
Trade debtors outside receivables securitisations........... 12 7
Amounts due from CWC DataCo (see below)..................... 63 --
Other debtors............................................... 18 11
Prepayments and accrued income.............................. 38 49
--- ---
131 67
--- ---
DUE AFTER MORE THAN ONE YEAR
Prepayments and accrued income.............................. 68 69
--- ---
199 136
=== ===

Where, as part of attributing assets and liabilities to ConsumerCo and CWC
DataCo these assets and liabilities are to be transferred between legal entities
within the ntl (CWC) group, intragroup balances have been set up.

Included within prepayments and accrued income, is an amount of L100
million (1999: L112 million) in respect of the IT outsource representing:

2000 1999
------------------------------ -----
DUE AFTER
DUE WITHIN MORE THAN
ONE YEAR ONE YEAR TOTAL TOTAL
---------- --------- ----- -----
LM LM LM LM

Security deposit................................... 21 32 53 85
Consolidated billing system charge................. 9 27 36 14
Transition costs................................... 2 9 11 13
--- --- --- ---
32 68 100 112
=== === === ===

F-79
212
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The consolidated billing system charge is amortised over the life of the
outsource contract based on expected billing levels. The transition costs billed
by IBM in relation to the transition of the IT function to the outsource
provider include external legal, consultancy, property and other technical fees
which are amortised over differing periods depending on the period over which
ConsumerCo, through the ntl (CWC) group, derives benefit.

16 DEBTORS WITHIN RECEIVABLES SECURITISATION

2000 1999
---- ----
LM LM

Gross debtors.............................................. 56 85
Non-returnable proceeds.................................... (29) (62)
--- ---
27 23
=== ===

Within the overall working capital facilities, certain trade debtors have
been assigned as security against the advance of cash. This security is
represented by the assignment of a pool of trade debts to a trust for the
benefit of the providers of this securitisation facility. The financing provided
against this pool takes into account, inter alia, the risks that may be attached
to individual debtors and the expected collection period.

ConsumerCo, through the ntl (CWC) group, is not obliged (and does not
intend) to support any losses arising from the assigned debts against which cash
has been advanced. The providers of the finance have confirmed in writing that,
in the event of default in payment by a debtor, they will seek repayment of the
cash advanced only from the remainder of the pool of debts in which they hold an
interest, and that repayment will not be required from ConsumerCo in any other
way.

17 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2000 1999
---- ----
LM LM

Unsecured convertible loan notes............................ -- 9
Current instalments due on loans............................ 543 33
Obligations under finance leases............................ 7 5
Trade creditors............................................. 34 35
Amounts owed to CWC DataCo (see below)...................... -- 199
Amounts owed to parent undertaking.......................... 13 --
Other taxation and social security.......................... 11 5
Other creditors............................................. 7 30
Accruals and deferred income................................ 211 171
--- ---
826 487
=== ===

F-80
213
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

18 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2000 1999
----- -----
LM LM

Notes due 2003 ($750m at a coupon rate of 6.375%)........... 453 453
Notes due 2005 ($650m at a coupon rate of 6.625%)........... 393 393
Notes due 2008 ($1.1bn at a coupon rate of 6.750%).......... 665 665
Bonds due 2005 (L300m at a coupon rate of 7.125%)........... 298 298
Bonds due 2017 (L200m at a coupon rate of 7.375%)........... 199 199
Loans....................................................... 965 795
Obligations under finance lease............................. 100 108
Accruals and deferred income................................ 2 5
----- -----
3,075 2,916
===== =====

With the exception of certain specific finance lease obligations, all debt
of ntl (CWC) group has been allocated to ConsumerCo as such debt has primarily
been necessary to fund ConsumerCo's activities.

Substantially all third party borrowings were repaid as part of the
Transaction Agreement and were replaced with approximately L2.2 billion of
borrowings from another NTL group company.

19 PROVISIONS FOR LIABILITIES AND CHARGES

ONEROUS PROPERTY
OBLIGATIONS COSTS TOTAL
----------- -------- -----
LM LM LM

At March 31, 1999.................................... 5 9 14
Amounts used during the year......................... (3) (5) (8)
Established during the year.......................... -- -- --
--- -- ---
AT MARCH 31, 2000.................................... 2 4 6
=== == ===

At March 31, 2000 the onerous obligations provision relates to onerous
contract commitments not recorded in the books of Two Way TV Limited. This is
expected to be utilised over the next five years.

The remaining provision for property costs relates to the fair value
property provision for overmarket rents set up as a result of the acquisition of
Bell Cablemedia and NYNEX CableComms in April 1997, and is expected to be
utilised over the next 18 years.

20 DEFERRED TAX

The amount provided, and the full potential liability, in respect of UK
deferred taxation is as follows:

2000 1999
---- ----
LM LM

Amount provided and potential liability:.................... -- --
Tax effect of timing differences due to:
Excess capital allowances over depreciation............... (206) (140)
Other timing differences.................................. -- --
---- ----
(206) (140)
==== ====

F-81
214
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

As at March 31, 2000, ConsumerCo had substantial UK tax losses available to
carry forward which exceeded the timing differences due to the excess of capital
allowances over depreciation. No deferred tax asset has been recognised in the
accounts in respect of any unutilised tax losses.

21 CALLED UP SHARE CAPITAL

NUMBER OF SHARES
----------------
2000 1999 2000 1999
------ ------ ----- -----
M M LM LM

Authorised:
Ordinary shares of 50p each.................. 2,250 2,250 1,125 1,125
Allotted, issued and fully paid:
Ordinary shares of 50p each.................. 1,496 1,493 748 746

ntl (CWC) was listed on the London and New York Stock exchanges on April
28, 1997, when 1,489,253,555 shares were issued to acquire Bell Cablemedia and
NYNEX CableComms with a further 102,707 being issued on offer acceptances
received post-listing.

Allotments of ordinary shares of 50p each during the year to March 31, 2000
were as follows:

NUMBER OF GROSS
SHARES CONSIDERATION
ALLOTTED RECEIVED
--------- -------------
L

Bell Cablemedia plc Savings-Related Share Option Plan
1994................................................... 20,135 59,781
Bell Cablemedia plc No 1 Executive Share Option Plan
1994................................................... 13,944 41,521
Bell Cablemedia plc No 2 Executive Share Option Plan
1994................................................... 26,902 78,089
3.5% Bell Cablemedia plc unsecured convertible loan notes
due 2001............................................... 46,242 --
5% Bell Cablemedia unsecured convertible loan notes due
1995 (extended)........................................ 2,815,385 --
NYNEX CableComms Employees Share Option Plan............. 252,250 940,388
NYNEX CableComms Savings-Related Share Option Plan
1995................................................... 7,309 22,080
NYNEX CableComms Savings-Related Share Option Plan
1996................................................... 36,916 85,867
--------- ---------
3,219,083 1,227,726
========= =========

F-82
215
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Allotments of ordinary shares of 50p each during the year to March 31, 1999
were as follows:

NUMBER OF GROSS
SHARES CONSIDERATION
ALLOTTED RECEIVED
--------- -------------
L

Bell Cablemedia plc Savings-Related Share Option Plan
1994.................................................. 36,041 107,006
Bell Cablemedia plc No. 1 Executive Share Option Plan
1994.................................................. 137,199 394,646
Bell Cablemedia plc No. 2 Executive Share Option Plan
1994.................................................. 254,974 731,162
3.5% Bell Cablemedia plc unsecured convertible loan
notes due 2001........................................ 9,366 --
NYNEX CableComms Employees Share Option Plan............ 2,373,139 8,847,066
NYNEX CableComms Savings-Related Share Option Plan
1995.................................................. 29,098 87,905
NYNEX CableComms Savings-Related Share Option Plan
1996.................................................. 46,218 107,504
--------- ----------
2,886,035 10,275,289
========= ==========

At March 31, 2000, capital instruments which were convertible into ordinary
shares of ntl (CWC) were as follows:

PROJECTED
PRINCIPAL NUMBER OF PERIOD OF
AMOUNT SHARES CONVERSION
--------- --------- ----------
L

5% unsecured convertible loan notes due 1995
(extended).................................. 1,925,000 826,303 1999-2001
3.5% unsecured convertible loan notes due
2001........................................ 57,564 23,086 1999-2001

Both loan notes are convertible at the option of the holders.

22 RESERVES

SHARE OTHER
PREMIUM RESERVES
------- --------
LM LM

At April 1, 1999............................................ 9 (1,034)
Gross premiums on shares allotted........................... 8 --
Amortisation of issue costs relating to capital
instruments............................................... -- --
Loss for the financial year................................. -- (165)
Other movements............................................. -- --
--- ------
At March 31, 2000........................................... 17 (1,199)
=== ======

23 FINANCIAL INSTRUMENTS

ConsumerCo, through the ntl (CWC) group, holds or issues financial
instruments to finance its operations and to manage the interest rate and
currency risks arising from its sources of finance. In addition, various
financial assets and liabilities, for example, trade debtors, trade creditors,
accruals and prepayments, arise directly from operations. ConsumerCo has taken
advantage of the exemption available to exclude short term debtors and creditors
from disclosures of financial assets and liabilities. Disclosure focuses on
those financial instruments which play a significant medium to long term role in
the financial risk profile.

F-83
216
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

ConsumerCo, through the ntl (CWC) group finances its operations by a
mixture of bank borrowings and other long term debt. The ntl (CWC) group borrows
in the major debt markets in Sterling and US dollars at both fixed and floating
rates of interest, using derivatives where appropriate to generate the desired
effective currency profile and interest rate basis. The derivatives used for
this purpose are principally interest rate swaps and cross currency swaps.

The main risks arising from financial instruments are interest rate risk
and currency risk.

Finance and interest rate risk

ConsumerCo, through the ntl (CWC) group's exposure to interest rate
fluctuations on its borrowings and deposits is managed by using interest rate
swaps and forward rate agreements (FRAs). The minimum proportion fixed is higher
in the near term than in the longer term, with the aim of reducing the
volatility of short term interest costs whilst maintaining the opportunity to
benefit from the movements in longer term rates. The interest rate profile of
the financial liabilities, after taking account of interest rate swaps, FRAs and
cross currency swaps, of ConsumerCo as at March 31, 2000 and 1999 was:

2000 1999
STERLING STERLING
-------- --------
LM LM

Floating rate financial liabilities......................... 1,492 117
Fixed rate financial liabilities............................ 2,131 2,828
----- -----
Total....................................................... 3,623 2,945
===== =====
Fixed rate financial liabilities
Weighted average interest rate (%)........................ 6.9% 7.1%
Weighted average period for which rate is fixed (years)... 5 6

In addition to swaps, further protection from interest rate movements will
be provided by interest rate collars on L700 million for 3 years from July 15,
1999. These start when the last FRAs mature and at this stage the weighted
average interest rate is expected to fall further.

ConsumerCo held the following financial assets as part of its financing
arrangements at March 31, 2000:

CURRENCY LM
- -------- ---

Sterling.................................................... 87

Liquidity risk

ConsumerCo, through ntl (CWC) group treasury operations, manages borrowings
with respect to both interest and financing risk. Accordingly there are a range
of maturities of debt from one year to 17 years. Financial flexibility is
provided via the L1,500 million revolving facility, of which L1,000 million is
for five years and L500 million for 364 days. At the 2000 year end L700 million
was drawn under the five year facility and L350 million was drawn under the 364
day facility.

F-84
217
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The maturity profile of financial liabilities, other than short term
creditors such as trade creditors and accruals, at March 31, 2000 and 1999 was:

2000 1999
---- ----
LM LM

Finance lease obligations are repayable as follows:
Within one year............................................. 7 6
Between one and two years................................... 8 6
Between two and five years.................................. 31 28
In five or more years....................................... 61 74
--- ---
107 114
=== ===

All finance lease obligations were settled upon acquisition by NTL on May
30, 2000 and replaced with NTL group financing.

2000 1999
----- -----
LM LM

Loans and Notes are repayable as follows:
Within one year............................................. 543 29
Between one and two years................................... 6 4
Between two and five years.................................. 1,854 1,541
In five or more years....................................... 1,113 1,257
----- -----
3,516 2,831
===== =====

All loans and notes were settled prior to, or upon, acquisition by NTL on
May 30, 2000 and replaced with NTL group financing.

The maturity profile of the ConsumerCo's undrawn committed borrowing
facilities at March 31, 2000 was:

2000 1999
---- ----
LM LM

Within one year............................................. 150 500
Greater than two years...................................... 40 225
--- ---
190 725
=== ===

F-85
218
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Fair values of financial assets and liabilities

The estimated fair value of ConsumerCo's financial instruments are
summarised below:

2000 1999
---------------------- ----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
LM LM LM LM

PRIMARY FINANCIAL INSTRUMENTS HELD OR
ISSUED TO FINANCE OPERATIONS:
Long term debt.......................... (3,075) (3,127) (2,911) (2,962)
Cash and short term deposits............ 87 87 127 127
Derivative financial instruments held to
manage the interest rate and currency
profile
Interest rate swaps -- assets........... -- 9 -- --
Interest rate swaps -- (liabilities).... -- -- -- (76)
INTEREST RATE COLLARS -- ASSETS......... -- 5 -- --
INTEREST RATE COLLARS --
(LIABILITIES)......................... -- -- -- (8)
CROSS CURRENCY SWAPS -- ASSETS.......... -- -- -- 38
Cross currency swaps -- (liabilities)... -- (48) -- (17)

Cash at bank and in hand, account receivable, account payable, short term
borrowings and current investment liabilities.

The carrying value approximates fair value either because of the short
maturity of the instruments or because the interest rate on investments is reset
after periods not greater than six months.

Long term borrowings

The fair value is based on quoted market prices or, where these are not
available, on the quoted market prices of comparable debt issued by other
companies.

Interest rate swaps, collars and currency swaps

The fair value of interest rate and currency swaps is the estimated amount
which ConsumerCo, through the ntl (CWC) group, expects to pay or receive on the
termination of the agreement, taking into consideration current interest rates
and the current credit worthiness of the counterparties. The nominal value of
the interest rate and currency swaps at March 31, 2000 was L2,898 million (1999:
L2,935 million). The nominal value of the interest rate collars at March 31,
2000 was L700 million (1999: L700 million).

Currency risk

ConsumerCo, through the ntl (CWC) group has significant sources of finance
denominated in US dollars which have been hedged back into sterling using cross
currency swaps.

F-86
219
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Gains and losses on instruments used for hedging are not recognised until
the exposure that is being hedged is itself recognised. Unrecognised gains and
losses on the instruments used for hedging, and the movements thereon are as
follows as at March 31, 2000:

GAINS LOSSES TOTAL
----- ------ -----
LM LM LM

Unrecognised gains and losses on hedges
As at April 1, 1999....................................... 38 (101) (63)
--- ---- ---
Gains and losses arising before April 1, 1999 that were
not recognised in the year.............................. 38 (101) (63)
Gains and losses arising in the year that were not
recognised in the year.................................. (24) 53 29
--- ---- ---
Unrecognised gains and losses on hedges at March 31,
2000.................................................... 14 (48) (34)
--- ---- ---
Gains and losses expected to be realised in 2000.......... 14 (48) (34)
Gains and losses expected to be realised in 2001 or
later................................................... -- -- --
--- ---- ---
14 (48) (34)
=== ==== ===

24 COMMITMENTS

The amount of capital expenditure, excluding that relating to the IT
outsource, authorised by ConsumerCo, for which no provision has been made in the
consolidated financial information is as follows:

2000 1999
---- ----
LM LM

Contracted.................................................. 86 180

ConsumerCo, through the ntl (CWC) group, is also contracted to IBM under
the IT outsource agreement. At March 31, 2000, the total outstanding commitment
was L1.3 billion which was shared equally between ConsumerCo and CWC DataCo in
accordance with the Transaction Agreement for a 10 year period against which the
security deposit is offset throughout the term of the contract (1999: L1.5
billion, 1998: Lnil).

25 CONTINGENT LIABILITIES

There are no contingent liabilities at March 31, 2000.

F-87
220
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

26 LEASES

Operating lease commitments payable in the following year, analysed
according to the period in which each lease expires are as follows:

2000 1999
---- ----
LM LM

LAND AND BUILDINGS
Expiring within one year.................................... -- --
Expiring in years two to five............................... 1 --
Expiring thereafter......................................... 5 7
--- ---
6 7
=== ===
OTHER ASSETS
Expiring within one year.................................... 1 1
Expiring in years two to five............................... 3 --
Expiring thereafter......................................... -- --
--- ---
4 1
=== ===

27 RECONCILIATION OF OPERATING (LOSS) PROFIT TO NET CASH (OUTFLOW) INFLOW FROM
OPERATING ACTIVITIES

2000 1999 1998
---- ---- ----
LM LM LM

Operating (loss)/profit..................................... (13) 45 60
Depreciation and amortisation............................... 156 135 103
Decrease in non refundable receipts from receivables
securitisation............................................ (33) 1 61
Increase in debtors......................................... 32 (21) (29)
Decrease in creditors....................................... (231) 60 191
---- --- ---
Net cash (outflow)/inflow from operating activities before
fundamental reorganisation and IT outsource costs......... (89) 220 386
Outflow relating to fundamental reorganisation.............. (6) (28) (30)
Outflow relating to IT outsource transition costs........... -- (13) --
---- --- ---
Net cash (outflow)/inflow from operating activities......... (95) 179 356
==== === ===

28 CASH INFLOW FROM ACQUISITIONS AND DISPOSALS

The analysis of net inflow of cash in respect of the acquisition and
disposal of subsidiaries is as follows:

2000 1999 1998
---- ---- ----
LM LM LM

Acquisition of subsidiaries................................. -- (4) --
Share issue costs........................................... -- -- (49)
Cash acquired with subsidiaries............................. -- 4 137
--- --- ---
Net cash inflow from acquisition............................ -- -- 88
Disposal of business........................................ -- 4 --
--- --- ---
Net cash inflow from acquisitions and disposals............. -- 4 88
=== === ===

F-88
221
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

29 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

2000 1999 1998
------ ------ ------
LM LM LM

(Decrease) increase in cash in the period............. (40) (102) 144
Cash outflow resulting from debt and lease
financing........................................... (706) (331) (378)
------ ------ ------
Changes in net debt resulting from cash flows......... (746) (433) (234)
Other movements....................................... 12 7 --
Acquisition of subsidiaries........................... -- -- (2,197)
Inception of finance lease contracts.................. -- -- (30)
------ ------ ------
Movement in net debt in the period.................... (734) (426) (2,461)
Net (debt) funds at April 1........................... (2,802) (2,376) 85
------ ------ ------
Net debt at March 31.................................. (3,536) (2,802) (2,376)
====== ====== ======

30 ANALYSIS OF CHANGES IN NET DEBT

AT AT AT
APRIL 1, CASH OTHER APRIL 1, CASH OTHER MARCH 31,
1998 FLOW MOVEMENTS 1999 FLOW MOVEMENTS 2000
-------- ---- --------- -------- ---- --------- ---------
LM LM LM LM LM LM LM

Cash at bank and in hand............. 229 (102) -- 127 (40) -- 87
------ ---- --- ------ ---- --- ------
Debt due within one year............. (28) 10 -- (18) (541) 9 (550)
Debt due after more than one year.... (2,577) (341) 7 (2,911) (165) 3 (3,073)
------ ---- --- ------ ---- --- ------
Total debt........................... (2,605) (331) 7 (2,929) (706) 12 (3,623)
------ ---- --- ------ ---- --- ------
Total net (debt) cash................ (2,376) (433) 7 (2,802) (746) 12 (3,536)
====== ==== === ====== ==== === ======

F-89
222
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

31 ACQUISITIONS AND DISPOSALS

Acquisitions

On July 28, 1998, ConsumerCo, through ntl (CWC), subscribed for shares
representing 50.1% of the enlarged ordinary share capital of Two Way TV Limited
for L13 million.

For Two Way TV Limited the fair value of assets and liabilities acquired,
together with the fair value of consideration paid (including acquisition costs)
is set out below:

1999
----------------------------------
1999 CWC
BOOK FAIR VALUE CONSUMERCO
VALUE ADJUSTMENTS FAIR VALUE
----- ----------- ----------
LM LM LM

NET ASSETS ACQUIRED:
Tangible fixed assets............................ 1 -- 1
Stocks........................................... -- -- --
Debtors.......................................... 9 -- 9
Cash............................................. 4 -- 4
Creditors: amounts falling due within one year... (2) -- (2)
Creditors: amounts falling due after one year.... (1) -- (1)
Provisions....................................... -- (3) (3)
Minority interest................................ (4) -- (4)
--- --- ---
7 (3) 4
Goodwill......................................... 9
--- --- ---
Fair value of consideration...................... 16 (3) 13
--- --- ---
Satisfied by:
Cash............................................. 4
Deferred cash consideration...................... 9
===

On April 28, 1997 ConsumerCo, through ntl (CWC), acquired 100% of Bell
Cablemedia, as enlarged by its acquisition of Videotron, and 100% of NYNEX
CableComms. This transaction has been accounted for under the acquisition
method. The consideration comprised L2 billion in shares.

F-90
223
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

For the acquisition of Bell Cablemedia and NYNEX CableComms the fair value
of assets and liabilities acquired, together with the fair value of
consideration paid (including acquisition costs) is set out below:

1998
-----------------------------------------------------
1998 ACCOUNTING
FAIR VALUE POLICY
BOOK VALUE ADJUSTMENTS ALIGNMENT FAIR VALUE
---------- ----------- ---------- ----------
LM LM LM LM

Net assets acquired:
Intangible fixed assets............. 517 -- (517) --
Tangible fixed assets............... 2,371 (194) -- 2,177
Debtors............................. 144 (36) -- 108
Cash and cash equivalents........... 137 -- -- 137
Borrowings.......................... (2,000) (197) -- (2,197)
Creditors: amounts falling due
within one year................... (139) (26) -- (165)
Provisions.......................... -- (48) -- (48)
Minority interests.................. (13) -- -- (13)
------ ---- ---- ------
1,017 (501) (517) (1)
Goodwill............................ 2,006
------
Fair value of consideration
Satisfied by:
Shares allotted..................... 2,005
Cash................................ --
------
2,005
======

Bell Cablemedia held L517 million of goodwill in its balance sheet arising
principally on its acquisition of Videotron. This amount has been written off
directly to reserves in accordance with ConsumerCo policy in 1998.

The principal fair value adjustments were:

- An adjustment for L129 million to write-down analogue set-top boxes and
head-end equipment, L31 million for property and IT systems and L34
million of other fixed assets;

- An adjustment to write off deferred financing costs and arrangement fees
of L58 million, L25 million of which were classified in debtors and L33
million in borrowings;

- An adjustment of L164 million to borrowings to restate the high yield
debt obligations of Bell Cablemedia at their fair value;

- An adjustment to provide for onerous contracts of L48 million, including
programming costs, future commitments to purchase analogue set-top boxes,
property and other items;

- Other adjustments of L37 million relating to other assets and
liabilities.

F-91
224
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The fair value of assets and liabilities acquired on each of the
significant acquisitions is set out below:

FAIR VALUE
BOOK VALUE ADJUSTMENTS FAIR VALUE
---------- ----------- ----------
LM LM LM

NYNEX CableComms:
Tangible fixed assets.......................... 1,158 (60) 1,098
Debtors........................................ 66 (27) 39
Cash........................................... 5 -- 5
Borrowings..................................... (615) -- (615)
Creditors: amounts falling due within one
year......................................... (28) (5) (33)
Provisions..................................... -- (23) (23)
----- ---- -----
586 (115) 471
===== ==== =====

FAIR VALUE ACCOUNTING
BOOK VALUE ADJUSTMENTS POLICY ALIGNMENT FAIR VALUE
---------- ----------- ---------------- ----------
LM LM LM LM

Bell Cablemedia:
Intangible fixed assets......... 517 -- (517) --
Tangible fixed assets........... 1,214 (133) -- 1,081
Debtors......................... 78 (9) -- 69
Cash............................ 132 -- -- 132
Borrowings...................... (1,385) (197) -- (1,582)
Creditors: amounts falling due
within one year............... (111) (21) -- (132)
Provisions...................... -- (26) -- (26)
Minority interests.............. (13) -- -- (13)
------ ---- ---- ------
432 (386) (517) (471)
====== ==== ==== ======

The summarised results of ConsumerCo's material acquisitions, through ntl
(CWC), from the end of the previous financial year to the date of acquisition by
ntl (CWC) were as follows:

NYNEX
BELL CABLEMEDIA CABLECOMMS
JAN. 1, 1997 TO JAN. 1, 1997 TO
APRIL 28, 1997 APRIL 28, 1997
--------------- ---------------
LM LM

Turnover........................................... 35 63
Operating loss..................................... (27) (24)
Loss before tax.................................... (56) (33)
Taxation........................................... -- 7
Loss after tax..................................... (56) (26)
Minority interests................................. -- --
Loss attributable to shareholders.................. (56) (26)

There were no recognised gains and losses in these periods other than the
losses attributable to shareholders. The table below gives summarised financial
information for the ConsumerCo's material acquisitions for their full financial
year prior to acquisition.

F-92
225
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

NYNEX
BELL CABLEMEDIA CABLECOMMS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1996
--------------- ------------
LM LM

Loss after tax........................................ (96) (74)
Minority interests.................................... -- 11

32 SUBSEQUENT EVENTS

Certain key transaction steps have taken place subsequent to the balance
sheet date, as detailed below.

Following the announcement of the clearance by the Secretary of State of
France Telecom's investment in NTL on May 10, 2000, all necessary conditions to
the ntl (CWC) Scheme of Arrangement which forms part of the Transaction were
satisfied.

With effect from close of trading on May 11, 2000, the listing of ntl (CWC)
shares on the London Stock Exchange was cancelled. On May 12, 2000, the ntl
(CWC) Scheme became effective. As part of the Scheme, all of the existing ntl
(CWC) shares were cancelled and the resulting credit in the books of ntl (CWC)
was applied in issuing paid up in full, new ntl (CWC) shares to Cable & Wireless
Communications (Holdings) plc. Consequently, Cable & Wireless Communications
(Holdings) plc has become the immediate parent undertaking of ntl (CWC). ntl
(CWC) shareholders who were on the register of ntl (CWC) at the Dealings Record
Time were issued with shares in Cable & Wireless Communications (Holdings) plc
in proportion to their cancelled holdings of ntl (CWC) shares. In addition, ntl
(CWC) has been re-registered as a private company.

On May 12, 2000, the ntl (CWC) issued a 30 day redemption notice to the
Yankee Bondholders and deposited redemption monies with the Trustee of the
Yankee Bonds. On May 13, 2000, CWC DataCo was transferred to Cable & Wireless
Communications (Holdings) plc.

On May 24, 2000, NTL exercised the option granted to it by Cable and
Wireless plc, required for completion of the Transaction, which took place on
May 30, 2000. Following completion, NTL became the ultimate parent undertaking
of the ntl (CWC).

On June 13, 2000 the Cable & Wireless Communications changed its name to
ntl (CWC) Limited.

33 RELATED PARTY TRANSACTIONS

Transactions with affiliates

Cable and Wireless and Bell Atlantic Corporation are considered related
parties on the basis of their equity shareholdings in ntl (CWC) which at April
30, 2000 amounted to 52.73% (1999: 52.84%) and 18.55% (1999: 18.59%)
respectively.

During the period ConsumerCo had the following transactions with Cable and
Wireless:

NOTE 2000 1999 1998
----- ---- ---- ----
LM LM LM

Interest payable.................................. -- -- (1)
Contribution towards group development
programme....................................... (i) (1) (1) (1)
Management service charge payable................. (ii) -- (1) (3)
Net lease payments on property.................... (iii) (1) (1) --

All transactions with CWC DataCo undertakings are on commercial terms.

F-93
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

NOTES:

(i) Cable and Wireless undertakes a number of development programmes which are
of benefit to its subsidiary undertakings. ConsumerCo makes contributions
for its share of the cost of these development programmes.

(ii) Management service charges cover the provision of technical training,
marketing, taxation, internal audit and treasury services and other
professional advice.

(iii) This relates to office space in properties rented from Cable and Wireless.

Other Consumerco transactions as part of the ntl (CWC) group

In the year ended March 31, 1998 ConsumerCo, through the ntl (CWC) group
had transactions with Bell Canada International Telecommunications Holdings
relating to the transfer of consortium relief. The balance due to Bell Canada
International Telecommunication Holdings at March 31, 1998 was L3 million.

ConsumerCo, through ntl (CWC) had an interconnect agreement with Mercury
Personal Communications, trading as One2One, a partnership in which Cable and
Wireless until October 1999 had a 50% interest. The agreement covers the
carrying of traffic on each party's respective networks. During the year ended
March 31, 1998, revenues from One2One were L30 million and purchases were L41
million.

ConsumerCo, through ntl (CWC) reinsures its health care claims fund through
Pender Insurance Ltd, a wholly owned subsidiary company of Cable and Wireless.
The cost of this arrangement is L3.5 million.

ntl (CWC) shareholders' agreement

On March 21, 1997, Cable and Wireless, Bell Canada International
Telecommunication Holdings, Bell Atlantic, together the Shareholder Companies,
and ntl (CWC) entered into an agreement setting out the terms of the
relationship among them in respect of ntl (CWC). Under this agreement, the
Shareholder Companies have agreed that their group members will enter into
contracts with ntl (CWC) only on a normal commercial basis and on arms' length
terms.

Management and technical services agreement

The Shareholder Companies and ntl (CWC) entered into a management and
technical services agreement under which each of the Shareholder Companies
provide various services to ntl (CWC) at ntl (CWC)' request, including tax,
legal, internal audit, treasury and corporate finance and human resource
services. The services which may be provided by ntl (CWC) to each of the
Shareholder Companies include payroll and accounting, car fleet management and
VAT services. The terms and conditions of any services requested will be
negotiated and agreed on an arm's length basis.

Secondment agreement

The Shareholder Companies and ntl (CWC) have also entered into the
Secondment Agreement pursuant to which each of the Shareholder Companies, on the
one hand, and ntl (CWC), on the other hand, will, subject to certain conditions,
be able to second their employees or employees of their subsidiary undertakings
to each other, respectively, or to companies within their respective groups. The
fee for any such secondment will broadly be based on the employee's salary,
remuneration and other benefits paid or provided to the employee by the
providing company.

Tax agreements

Under the Tax Sharing Agreement entered into on March 21, 1997 between the
Shareholder Companies and ntl (CWC) i) the tax affairs of ntl (CWC) will be
managed on a "stand alone" basis; ii) dividends paid by ntl (CWC) will be paid
outside of any election under Section 247 of the Income and Corporation Tax Act
1988; iii) Cable and Wireless will be entitled to surrender, but did not in the
year ended March 31, 1999, to ntl (CWC)

F-94
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

ACT to the fullest extent permitted by law (such surrender to be for payment);
iv) the shareholders will consider proposals to structure such surrenders in
such a way as to reduce the tax disadvantage for Bell Atlantic; v) ntl (CWC)
will make, at the request of Bell Atlantic, certain elections with regard to its
subsidiaries for the purposes of reducing US tax disadvantages to Bell Atlantic,
unless such elections would have a detrimental effect on the affairs of ntl
(CWC), its subsidiaries, or the other shareholders; vi) ntl (CWC) will consult
generally with the shareholders regarding its tax affairs.

Cable and Wireless Licence

Cable and Wireless has granted ntl (CWC) the right to use the 'Cable &
Wireless', 'C&W' and Globe Device trade marks (together with other trade marks
relating to Cable and Wireless products previously offered by Mercury) in the
United Kingdom on a royalty free basis.

34 PRINCIPAL OPERATING SUBSIDIARY UNDERTAKINGS

COUNTRY OF
SUBSIDIARY INCORPORATION HOLDING PRINCIPAL ACTIVITIES
- ---------- ------------- ------- --------------------

ntl (Aylesbury and Chiltern) Limited UK 100% Cable TV and telecommunications provider
ntl (Broadland) Limited UK 100% Cable TV and telecommunications provider
ntl (County Durham) Limited UK 100% Cable TV and telecommunications provider
ntl (Ealing) Limited UK 100% Cable TV and telecommunications provider
ntl (Fenland) Limited UK 100% Cable TV and telecommunications provider
ntl (Greenwich and Lewisham) Limited UK 100% Cable TV and telecommunications provider
ntl (Hampshire) Limited UK 100% Cable TV and telecommunications provider
ntl (Harrogate) Limited UK 100% Cable TV and telecommunications provider
ntl (Harrow) Limited UK 100% Cable TV and telecommunications provider
ntl (Kent) Limited UK 100% Cable TV and telecommunications provider
ntl (Lambeth and Southwark) Limited UK 100% Cable TV and telecommunications provider
ntl (Leeds) Limited UK 100% Cable TV and telecommunications provider
ntl Wirral Telephone and Cable TV Company UK 100% Cable TV and telecommunications provider
ntl (Norwich) Limited UK 100% Cable TV and telecommunications provider
ntl (Peterborough) Limited UK 100% Cable TV and telecommunications provider
ntl (Southampton and Eastleigh) Limited UK 100% Cable TV and telecommunications provider
ntl (South East) Limited UK 100% Cable TV and telecommunications provider
ntl (South Hertfordshire) Limited UK 33.3% Cable TV and telecommunications provider
ntl (South London) Limited UK 100% Cable TV and telecommunications provider
ntl (Thamesmead) Limited UK 100% Cable TV and telecommunications provider
ntl (Wandsworth) Limited UK 100% Cable TV and telecommunications provider
ntl (Wearside) Limited UK 100% Cable TV and telecommunications provider
ntl (West London) Limited UK 100% Cable TV and telecommunications provider
ntl (York) Limited UK 100% Cable TV and telecommunications provider
ntl CableComms Bolton UK 100% Cable TV and telecommunications provider
ntl CableComms Bromley UK 100% Cable TV and telecommunications provider
ntl CableComms Bury and Rochdale UK 100% Cable TV and telecommunications provider
ntl CableComms Cheshire UK 100% Cable TV and telecommunications provider
ntl CableComms Derby UK 100% Cable TV and telecommunications provider
ntl CableComms East Lancashire UK 100% Cable TV and telecommunications provider
ntl CableComms Greater Manchester UK 100% Cable TV and telecommunications provider
ntl CableComms Macclesfield UK 100% Cable TV and telecommunications provider
ntl CableComms Oldham and Tameside UK 100% Cable TV and telecommunications provider
ntl CableComms Solent UK 100% Cable TV and telecommunications provider
ntl CableComms Staffordshire UK 100% Cable TV and telecommunications provider
ntl CableComms Stockport UK 100% Cable TV and telecommunications provider
ntl CableComms Surrey UK 100% Cable TV and telecommunications provider
ntl CableComms Sussex UK 100% Cable TV and telecommunications provider
ntl CableComms Wessex UK 100% Cable TV and telecommunications provider
ntl CableComms Wirral UK 100% Cable TV and telecommunications provider
ntl (CWC) Programming Limited UK 100% Cable programming company
ntl Communications Services Limited UK 100% Management company
Two Way TV Limited UK 50.1% Development company

F-95
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CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

35 SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES

Basis of preparation

ConsumerCo has prepared its combined financial statements in accordance
with generally accepted accounting principles in the United Kingdom which differ
in certain material respects from US generally accepted accounting principles.
The significant differences relate principally to the following items and the
adjustments necessary to restate net loss and shareholders' equity in accordance
with US generally accepted accounting principles are shown below.

a) Goodwill

Under UK generally accepted accounting principles, goodwill arising on
acquisitions before April 1, 1998 is eliminated directly against reserves.
Goodwill arising on acquisitions after April 1, 1998 is capitalised and
amortised through the profit and loss account over the Directors' estimate of
its useful economic life, which may be up to 20 years. Under US generally
accepted accounting principles goodwill is capitalised and amortised by charges
against income up to 20 years.

b) Deferred tax

Under UK generally accepted accounting principles, provision is made for
deferred taxation only when there is a reasonable probability that the liability
will arise in the foreseeable future. US generally accepted accounting
principles requires full provision for deferred income taxes under the liability
method on all temporary differences and, if required, a valuation allowance is
established to reduce gross deferred tax assets to the amount which is likely to
be realised.

c) Prematurity

Under US generally accepted accounting principles, depreciation of costs in
the period between the completion of a portion of the network and the time that
expected subscriber numbers are achieved (the prematurity period) are determined
in accordance with SFAS 51, "Financial Reporting by Cable Television Companies".
This requires that depreciation and capitalisation during the prematurity period
be determined by reference to the ratio of the greater of i) the average number
of customers expected that month as estimated at the beginning of the
prematurity period; ii) the average number of customers that would be attained
using at least equal, that is, straight line, monthly progress in adding new
customers towards the estimate of customers at the end of the prematurity
period; and iii) the average number of actual customers -- to the estimated
number of customers at the end of the prematurity period. ConsumerCo follows
policies which, because the size of the portion of the network tracked is
significantly smaller than a "portion" under SFAS 51, result in no material
difference to applying SFAS 51.

Under UK generally accepted accounting principles interest on borrowings
used to finance construction of the network is capitalized until that portion of
the network is completed, hence no interest on borrowings that continue to
finance completed portions of the network in the prematurity period is
capitalised. However, US generally accepted accounting principles allow such
interest to continue to be capitalised in the prematurity period.

d) Cash flows

The Cash Flow Statement is prepared in accordance with the UK Financial
Reporting Standard No. 1 Revised, Cash Flow Statements, referred to as FRS1
Revised, for UK generally accepted accounting principles reporting. Its
objective and principles are similar to those set out in Statement of Financial
Accounting Standard (SFAS) 95, "Statement of Cash Flows". The principal
difference between the standards is in respect of classification. Under FRS 1
Revised, ConsumerCo presents its combined cash flows for: operating activities;
F-96
229
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

returns on investments and servicing of finance; taxation; capital expenditure
and financial investment; acquisitions and disposals; equity dividends paid; and
financing. SFAS 95 requires only three categories of cash flow activity;
operating; investing and financing.

Cash flows arising from taxation and returns on investments and servicing
of finance under FRS 1 Revised would, with the exception of dividends paid, be
included as operating activities under SFAS 95; dividend payments would be
included as a financing activity under SFAS 95. Under FRS 1 Revised, cash is
defined as cash in hand and deposits repayable on demand, short term deposits
which are readily convertible into known amounts of cash at or close to their
carrying value are classified as liquid resources. SFAS 95 defines cash and cash
equivalents as cash in hand and short term highly liquid investments with
original maturities of three months or less. Cash flows in respect of short term
deposits with original maturities exceeding three months are included in
investing activities under SFAS 95 and are included in capital expenditure and
financial investments under FRS 1 Revised.

e) Debt

On May 12, 2000, ConsumerCo issued a 30 day redemption notice to Yankee
Bondholders and deposited redemption monies with the Trustee of the Yankee
Bonds. This debt was treated as long term under UK GAAP. However, in accordance
with US GAAP, ConsumerCo had committed to pay the monies prior to release of
these financial statements, therefore this debt is classified as current.

The effects of these different accounting principles are as follows:

An exchange rate of US$1.63 has been used to translate sterling to US
dollars. Such translations are for convenience only and should not be construed
as representations that the sterling amounts have been converted into US dollars
at that or any other rate.

RECONCILIATION OF UK/US GAAP

2000 2000 1999
----- ----- -----
$M LM LM

RECONCILIATION OF UK/US GAAP -- NET LOSS
NET LOSS AS REPORTED UNDER UK GAAP.......................... (269) (165) (135)
US GAAP adjustments:
Amortisation of goodwill.................................... (165) (101) (101)
Capitalisation of Prematurity Interest...................... 7 4 --
Deferred Tax................................................ (18) (11) --
----- ----- -----
NET LOSS UNDER US GAAP...................................... (445) (273) (236)
===== ===== =====

2000 2000 1999
----- ----- -----
$M LM LM

RECONCILIATION OF UK/US GAAP -- SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY AS REPORTED UNDER UK GAAP.............. (707) (434) (279)
Goodwill.................................................... 2,799 1,717 1,818
Capitalisation of Prematurity Interest...................... 7 4 --
Deferred Tax................................................ (18) (11) --
----- ----- -----
SHAREHOLDERS' EQUITY UNDER US GAAP.......................... 2,081 1,276 1,539
===== ===== =====

F-97
230
CONSUMERCO

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2000 2000 1999
------ ----- -----
$M LM LM

COMBINED STATEMENT OF CASH FLOWS UNDER US GAAP
Net cash (used) provided by operating activities............ (31) (19) (223)
Net cash used in investing activities....................... (1,133) (695) (234)
Net cash provided by financing activities................... 1,099 674 355
------ ----- -----
Net change in cash under US GAAP............................ (65) (40) (102)
====== ===== =====

F-98
231

PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY

NTL Communications Corp.
110 East 59th Street
New York, New York 10022
USA
TRUSTEE, PRINCIPAL PAYING AGENT, TRANSFER AGENT AND REGISTRAR

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
USA
LUXEMBOURG PAYING AND TRANSFER AGENT

Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338, Luxembourg
LISTING AGENT

Banque Internationale a Luxembourg
69, route d'Esch
1-1470 Luxembourg
LEGAL ADVISORS TO THE COMPANY

Skadden, Arps, Slate, Meagher & Flom LLP
One Canada Square
Canary Wharf
London E14 5DS
England
AUDITORS

Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
USA
232

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You should rely only on the information contained in this document or that
we have referred you to. We have not authorized any other person to provide you
with different information. This prospectus may be delivered to you after the
date of this prospectus. However, you should realize that the affairs of NTL may
have changed since the date of this prospectus. This prospectus will not reflect
such changes. You should not consider this prospectus to be an offer or
solicitation relating to the notes in any jurisdiction in which such an offer or
solicitation is not authorized.

------------------

TABLE OF CONTENTS

PAGE
----

Explanatory Note Regarding Corporate
Structure of NTL..................... ii
Presentation of Information............ iii
Prospectus Summary..................... 1
Risk Factors........................... 8
The Exchange Offer..................... 15
Use of Proceeds........................ 22
Exchange Rates......................... 22
Capitalization......................... 23
Selected Historical Consolidated
Financial Information................ 24
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of NTL Communications..... 29
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of ConsumerCo............. 40
Business............................... 45
Management............................. 68
Description of the Notes............... 71
Book-Entry, Delivery and Form.......... 90
Definitions............................ 94
Registration Rights.................... 106
Description of Other Indebtedness...... 108
Federal Income Tax Considerations...... 121
Plan of Distribution................... 125
Legal Matters.......................... 125
Experts................................ 125
Enforceability of Civil Liabilities.... 126
Where You Can Find More Information.... 127
General Information.................... 128
Index to Financial Statements.......... F-1

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- ------------------------------------------------------
Until September 16, 2001, which is 90 days after the date of this
prospectus, if you are a dealer effecting transactions in the new notes, whether
or not you are participating in the exchange offer, you may be required to
deliver a prospectus. This obligation is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.

[LOGO GRAPHIC]

NTL COMMUNICATIONS CORP.

E300,000,000
12 3/8% SENIOR NOTES
DUE 2008

-------------------
PROSPECTUS
-------------------
June 18, 2001

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