10-Q

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

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2003
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-22616

NTL Incorporated

(Exact name of registrant as specified in its charter)

Delaware	52-1822078
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
110 East 59th Street, New York, New York	10022
(Address of principal executive offices)	(Zip Code)

(212) 906-8440
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

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

The number of shares outstanding of the registrant’s common stock as of March 31, 2003 was 50,500,969.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	Condensed Consolidated Balance Sheets- March 31, 2003 and December 31, 2002
	Condensed Consolidated Statements of Operations- Three months ended March 31, 2003 and 2002 and January 1, 2003
	Condensed Consolidated Statement of Shareholders’ Equity — Three months ended March 31, 2003
	Condensed Consolidated Statements of Cash Flows- Three months ended March 31, 2003 and 2002
	Notes to Condensed Consolidated Financial Statements
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES
RISK FACTORS
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
EX-3.1: AMENDED AND RESTATED BY-LAWS
EX-99.1: CERTIFICATION OF CEO AND CFO

NTL INCORPORATED AND SUBSIDIARIES

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	Condensed Consolidated Balance Sheets- March 31, 2003 and December 31, 2002		3
	Condensed Consolidated Statements of Operations- Three months ended March 31, 2003 and 2002 and January 1, 2003		5
	Condensed Consolidated Statement of Shareholders’ Equity — Three months ended March 31, 2003		6
	Condensed Consolidated Statements of Cash Flows- Three months ended March 31, 2003 and 2002 and January 1, 2003		8
	Notes to Condensed Consolidated Financial Statements		9
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition			27
Item 3. Quantitative and Qualitative Disclosures about Market Risk			37
Item 4. Controls and Procedures			37
Risk Factors			38
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			45
Item 2. Changes in Securities and Use of Proceeds			45
Item 6. Exhibits and Reports on Form 8-K			46
SIGNATURES			48

2

PART I. FINANCIAL INFORMATIONS

ITEM 1. FINANCIAL STATEMENTS

NTL Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets
(dollars in millions)

		March 31,		December 31,
		2003		2002
		Reorganized		Predecessor
		Company		Company
		(unaudited)		(see note)
Assets
Current assets:
	Cash and cash equivalents	$	461.7	$	502.0
	Marketable securities		17.1		5.2
	Accounts receivable-trade, less allowance for doubtful accounts of $92.6 (2003) and $92.7 (2002)		362.7		395.9
	Other		198.2		194.3
	Due from NTL Europe, Inc.		1.7		73.3
Total current assets			1,041.4		1,170.7
Fixed assets, net			7,630.3		11,088.9
Reorganization value in excess of amounts allocable to identifiable assets			630.5		—
Goodwill			—		330.6
Intangible assets, net			1,190.6		64.7
Investments in and loans to affiliates, net			6.2		8.4
Other assets, net of accumulated amortization of $16.9 (2003) and $184.8 (2002)			178.8		378.1
Total assets		$	10,677.8	$	13,041.4

3

NTL Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets — Continued
(dollars in millions)

		March 31,			December 31,
		2003			2002
		Reorganized			Predecessor
		Company			Company
		(unaudited)			(see note)
Liabilities and shareholders’ equity (deficiency)
Current liabilities:
	Accounts payable	$	297.9		$	385.8
	Accrued expenses and other		733.9			780.5
	Accrued construction costs		71.8			70.4
	Interest payable		135.2			177.3
	Deferred revenue		360.7			359.8
	Due to NTL Europe, Inc.		3.7			236.1
	Current portion of long-term debt		2.6			5,955.4
Total current liabilities			1,605.8			7,965.3
Long-term debt			6,448.2			—
Less: unamortized discount			(219.5	)		—
			6,228.7			—
Other			47.0			—
Deferred income taxes			165.4			94.4
Commitments and contingent liabilities
Liabilities subject to compromise			—			10,157.8
Shareholders’ equity (deficiency):
	Series preferred stock — $.01 par value; authorized 5,000,000 (2003) and none (2002) shares; issued and outstanding none		—			—
	Common stock -$.01 par value; authorized 400,000,000 (2003) and 100 (2002) shares; issued and outstanding 50,500,969 (2003) and 13 (2002) shares		0.5			—
	Additional paid-in capital		2,927.1			14,045.5
	Accumulated other comprehensive (loss)		(42.3	)		(653.6	)
	(Deficit)		(254.4	)		(18,568.0	)
			2,630.9			(5,176.1	)
Total liabilities and shareholders’ equity (deficiency)		$	10,677.8		$	13,041.4

Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date.

See accompanying notes.

4

NTL Incorporated and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
(in millions, except per share data)

		Three Months Ended
		March 31,
	2003			2002
	Reorganized			Predecessor
	Company			Company
Revenues	$	875.9		$	792.9
Costs and expenses
Operating expenses (exclusive of depreciation shown separately below)		408.6			380.9
Selling, general and administrative expenses		216.5			192.0
Other charges		2.9			1.6
Depreciation		259.2			322.5
Amortization		49.8			14.9
		937.0			911.9
Operating (loss)		(61.1	)		(119.0	)
Other income (expense)
Interest income and other, net		2.7			9.4
Interest expense		(176.5	)		(324.8	)
Recapitalization expense		—			(32.1	)
Share of income from equity investments		0.1			0.3
Foreign currency transaction (losses)		(3.4	)		(5.0	)
(Loss) before income taxes		(238.2	)		(471.2	)
Income tax (expense) benefit		(16.2	)		11.3
Net (loss)	$	(254.4	)	$	(459.9	)
Basic and diluted net (loss) per common share — (pro forma in 2002)	$	(5.04	)	$	(9.11	)
Weighted average shares — (pro forma in 2002)		50.5			50.5

	January 1,
	2003
	Predecessor
	Company
Gain on debt discharge	$	8,451.6
Fresh-start adoption — intangible assets		1,521.7
Fresh-start adoption — long-term debt		221.3
Fresh-start adoption — deferred tax liability		(68.6	)
Fresh-start adoption — accrued expenses		(120.4	)
Fresh-start adoption — fixed assets		(3,194.9	)
Recapitalization expense		(8.0	)
Net income	$	6,802.7
Pro forma basic and diluted net income per common share	$	134.71
Pro forma weighted average shares		50.5

See accompanying notes.

5

NTL Incorporated and Subsidiaries
Condensed Consolidated Statement of Shareholders’ Equity
(unaudited)
(dollars in millions)

		Series Preferred Stock				Common Stock
		$.01 Par Value				$.01 Par Value					Additional
											Paid-In
		Shares		Par		Shares			Par		Capital
Predecessor Company
Balance, December 31, 2002			—	$	—		13		$	—	$	14,045.5
Net income January 1, 2003
Issuance of common stock							50,500,969			0.5		1,062.1
Fresh-start adoption -other							(13	)				(12,180.5	)
Reorganized Company
Balance, January 1, 2003			—		—		50,500,969			0.5		2,927.1
Comprehensive loss:
Net loss for the three months ended March 31, 2003
Currency translation adjustment
	Total
Balance, March 31, 2003			—	$	—		50,500,969		$	0.5	$	2,927.1

6

NTL Incorporated and Subsidiaries
Condensed Consolidated Statement of Shareholders’ Equity
(unaudited) — Continued
(dollars in millions)

					Accumulated Other
					Comprehensive
					(Loss)
					Foreign			Pension
		Comprehensive			Currency			Liability
		(Loss)			Translation			Adjustments			(Deficit)
Predecessor Company
Balance, December 31, 2002					$	(549.9	)	$	(103.7	)	$	(18,568.0	)
Net income January 1, 2003												6,802.7
Issuance of common stock
Fresh-start adoption — other						549.9			103.7			11,765.3
Reorganized Company
Balance, January 1, 2003						—			—			—
Comprehensive loss:
Net loss for the three months ended March 31, 2003		$	(254.4	)								(254.4	)
Currency translation adjustment			(42.3	)		(42.3	)
	Total	$	(296.7	)
Balance, March 31, 2003					$	(42.3	)	$	—		$	(254.4	)

See accompanying notes.

7

NTL Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in millions)

	Three Months Ended
	March 31,
	2003			2002
	Reorganized			Predecessor
	Company			Company
Net cash provided by (used in) operating activities	$	21.5		$	(67.3	)
Investing activities
Purchase of fixed assets		(185.2	)		(214.5	)
Investments in and loans to affiliates		2.1			(3.7	)
Decrease in other assets		2.1			—
Purchase of marketable securities		(17.1	)		(2.0	)
Proceeds from sales of marketable securities		5.2			—
Net cash (used in) investing activities		(192.9	)		(220.2	)
Financing activities
Proceeds from borrowings, net of financing costs		—			430.4
Principal payments		(2.4	)		(0.9	)
Contribution from NTL (Delaware), Inc.		—			3.7
Net cash (used in) provided by financing activities		(2.4	)		433.2
Effect of exchange rate changes on cash and cash equivalents		(5.2	)		(3.5	)
(Decrease) increase in cash and cash equivalents		(179.0	)		142.2
Cash and cash equivalents at beginning of period		640.7			251.1
Cash and cash equivalents at end of period	$	461.7		$	393.3
Supplemental disclosure of cash flow information
Cash paid during the year for interest exclusive of amounts capitalized	$	217.1		$	187.1
Income taxes paid		—			—

	January 1,
	2003
	Predecessor
	Company
Net cash (used in) operating activities	$	(46.9	)
Investing activities
Decrease in other assets		162.8
Net cash provided by investing activities		162.8
Financing activities
Proceeds from borrowings, net of financing costs		396.3
Principal payments		(373.5	)
Net cash provided by financing activities		22.8
Increase in cash and cash equivalents		138.7
Cash and cash equivalents at beginning of period		502.0
Cash and cash equivalents at end of period	$	640.7

See accompanying notes.

8

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements

Note A — Basis of Presentation

Chapter 11 Reorganization

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

Pursuant to the Plan, the entity formerly known as NTL Incorporated and its subsidiaries and affiliates were split into two separate groups, and the Company and NTL Europe, Inc. each emerged as independent public companies. The entity formerly known as NTL Communications Corp. was renamed “NTL Incorporated” and became the holding company for the former NTL group’s principal UK and Ireland assets. Prior to consummation of the Plan, the Company was a wholly-owned subsidiary of the entity then known as NTL Incorporated, which, pursuant to the Plan, was renamed “NTL Europe, Inc.” and which became the holding company for the former NTL group’s continental European and certain other assets. Pursuant to the Plan, all of the outstanding securities of the Company’s former ultimate parent company (NTL Europe, Inc.) and certain of its subsidiaries, including the Company, were cancelled, and the Company issued shares of its common stock and Series A warrants and NTL Europe, Inc. issued shares of its common stock and preferred stock to various former creditors and stockholders of the Company’s former ultimate parent company and its subsidiaries, including the Company. The precise mix of new securities received by holders of each particular type of security of the Company’s former ultimate parent company and its subsidiaries was set forth in the Plan. The outstanding notes of Diamond Holdings Limited and NTL (Triangle) LLC were not cancelled and remain outstanding.

Basis of Presentation

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

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

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

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

Basic and diluted net loss per common share in the three months ended March 31, 2002 is computed as if the 50.5 million shares issued in connection with our emergence from Chapter 11 reorganization on January 10, 2003 were outstanding as of January 1, 2002.

9

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note A — Basis of Presentation (continued)

Stock-Based Compensation

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

The Company’s employees participated in the various stock option plans of its former ultimate parent company. All options to purchase shares of the Company’s former ultimate parent company’s common stock were cancelled on the Effective Date pursuant to the Plan.

Pro forma information regarding net loss has been determined as if the Company had accounted for its and its former ultimate parent’s employee stock options under the fair value method of SFAS No. 123. 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 2003 and 2002: risk-free interest rates of 3.90% and 4.47%, respectively, dividend yield of 0%, volatility factor of the expected market price of the Company’s and its former ultimate parent’s common stock of .638 and .702, respectively, and a weighted-average expected life of the option of 10 years and 10 years, respectively.

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 these stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options’ vesting period. The effects of applying SFAS No. 123 on pro forma disclosures of net loss for the three months ended March 31,2003 and 2002 are not likely to be representative of the pro forma effects on net loss in future years.

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

	Three Months Ended
	March 31,
	2003			2002
	Reorganized			Predecessor
	Company			Company
	(in millions, except per share data)
Non-cash compensation expense, as reported	$	—		$	—
Non-cash compensation expense, pro forma	$	0.6		$	64.0
Net loss, as reported	$	(254.4	)	$	(459.9	)
Net loss, pro forma	$	(255.0	)	$	(523.9	)
Basic and diluted net (loss) per common share (pro forma in 2002)	$	(5.04	)	$	(9.11	)
Basic and diluted net (loss) per common share, pro forma	$	(5.05	)	$	(10.37	)

10

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note B — Reorganization and Emergence from Chapter 11

Background of Restructuring

Both the equity and debt capital markets experienced periods of significant volatility in 2001 and 2002, particularly for securities issued by telecommunications and technology companies. As a result, the ability of the Company’s former ultimate parent company and its subsidiaries to access those markets as well as its ability to obtain financing from its bank lenders and equipment suppliers became severely restricted. In addition, the Company’s former ultimate parent company and its subsidiaries, including the Company, had no further funds available, or were unable to draw upon funds, under the Company’s credit facilities. As a result of these factors, together with its substantial leverage, on January 31, 2002, the Company’s former ultimate parent company announced that it had appointed professional advisors to advise on strategic and recapitalization alternatives to strengthen its balance sheet, reduce debt and put an appropriate capital structure in place for its business.

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

The Company’s former ultimate parent company and its subsidiaries failed to make interest payments on some of the outstanding notes starting on April 1, 2002. The Company’s former ultimate parent company also failed to declare or pay dividends on certain series of its outstanding preferred stock due to a lack of available surplus under Delaware law.

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

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

The Plan was confirmed by the Bankruptcy Court on September 5, 2002. During the fall of 2002, the Company’s former ultimate parent company negotiated with a group of lenders to enter into a new financing arrangement to repay the DIP facility, to repay certain obligations and to provide liquidity to the Company and its subsidiaries. The Plan became effective on January 10, 2003, at which time the Company emerged from Chapter 11 reorganization. In connection with the Company’s emergence from Chapter 11 reorganization, the Company and certain of its subsidiaries issued $558.249 million aggregate principal face amount of 19% Senior Secured Notes due 2010 (the “Exit Notes”) on January 10, 2003. Initial purchasers of the Company’s Exit Notes also purchased 500,000 shares of the Company’s common stock on that date. The gross proceeds from the sale of the Exit Notes and such shares totaled $500.0 million. The proceeds were used in part to repay all amounts outstanding under the DIP facility and to purchase from NTL Delaware a £90.0 million note of NTL (UK) Group Inc. and to repay certain other obligations. Also on January 10, 2003, the Company and its lending banks amended the Company’s existing credit facilities.

We have historically incurred operating losses and negative operating cash flow. In addition, we required and expect to continue to require significant amounts of capital to finance construction of our networks, connection of customers to the networks, other capital expenditures and for working capital needs including debt service requirements.

We currently expect that we will require between £5.0 million and £15.0 million to fund our working capital including debt service and capital expenditures, net of cash from operations, in the twelve months from April 1, 2003 to March 31, 2004. We believe that cash, cash equivalents and marketable securities on hand of $478.8 million as of March 31, 2003 will be sufficient for our cash requirements during the twelve months from April 1, 2003 to March 31, 2004.

11

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note B — Reorganization and Emergence from Chapter 11 (continued)

Reorganization Value

The Company adopted fresh-start reporting upon its emergence from Chapter 11 reorganization in accordance with SOP 90-7. The Company engaged an independent financial advisor to assist in the determination of its reorganization value as defined in SOP 90-7. The Company and its independent financial advisor determined the Company’s reorganization value was $11,247.5 million. This determination was based upon various valuation methods, including discounted projected cash flow analysis, selected comparable market multiples of publicly traded companies and other applicable ratios and economic information relevant to the operations of the Company. Certain factors that were incorporated into the determination of the Company’s reorganization value included the following:

• Reporting unit 10 year cash flow projections

• Corporate income tax rates of 30% in the UK and 12.5% in Ireland

• Present value discount factors of 14.5%, 15% and 16% depending upon the reporting unit

• Residual value representing the sum of the value beyond 10 years into perpetuity was calculated using the Gordon Growth Model

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

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

Present value of discounted cash flows of the emerging entity		$	9,811.0
Current assets			1,237.0
Other assets			199.5
	Reorganization value	$	11,247.5

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

Allowed claims:
	Liabilities subject to compromise	$	10,157.8
Post petition liabilities:
	Current liabilities		7,965.3
	Deferred income taxes		94.4
			18,217.5
Reorganization value			11,247.5
		$	6,970.0

12

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note B — Reorganization and Emergence from Chapter 11 (continued)

Gain on Debt Discharge

The Company realized a gain of $8,451.6 million in connection with the recapitalization of its debt in accordance with the Plan. This gain has been reflected in the results of operations of the Predecessor Company on January 1, 2003. A summary of the gain on debt discharge follows (in millions):

Liabilities subject to compromise
	Pre-petition long-term debt subject to compromise	$	9,814.2
	Accounts payable and accrued expenses		1.6
	Interest payable		316.8
	Due to NTL Europe, Inc.		25.2
			10,157.8
Unamortized deferred financing costs			(127.9	)
			10,029.9
Claims assumed and consideration exchanged:
	Diamond Holdings notes assumed		327.3
	Interest payable assumed		38.0
	Accounts payable and accrued expenses assumed		1.6
	Due to NTL Europe, Inc. assumed		25.2
	Value of Reorganized Company’s common stock		1,186.2
			1,578.3
		$	8,451.6

Fresh-Start Reporting

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

The Company engaged an independent financial advisor to assist in the determination of the reorganization value (or fair value) of its assets and the present value of its liabilities. This determination resulted in the fresh-start reporting adjustments to write-down fixed assets and write-up intangible assets to their fair values. In addition, the Company’s total reorganization value exceeded the amounts allocable to identifiable assets that resulted in a new indefinite-lived intangible asset.

The adjustments entitled “Emergence from Chapter 11” reflect the consummation of the Plan, including the cancellation of a substantial portion of the Company’s outstanding debt and the issuance of shares of new common stock and Series A warrants to various former creditors and stockholders of the Company’s former ultimate parent company and certain of its subsidiaries, including the Company. The adjustments entitled “Fresh-Start” reflect the adoption of fresh-start reporting.

13

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note B — Reorganization and Emergence from Chapter 11 (continued)

		December 31,								January 1,
		2002								2003
		Predecessor		Emergence from			Fresh-			Reorganized
		Company		Chapter 11			Start			Company
		(in millions)
Assets
Current assets:
	Cash and cash equivalents	$	502.0	$	138.7		$	—		$	640.7
	Marketable securities		5.2		—			—			5.2
	Accounts receivable-trade, less allowance for doubtful accounts		395.9		—			—			395.9
	Due from affiliates		1.6		—			—			1.6
	Other		192.7		—			—			192.7
	Due from NTL Europe, Inc.		73.3		(72.4	)		—			0.9
Total current assets			1,170.7		66.3			—			1,237.0
Fixed assets, net			11,088.9		—			(3,194.9	)		7,894.0
Intangible assets, net			395.3		—			868.4			1,263.7
Investments in and loans to affiliates, net			8.4		—			—			8.4
Reorganization value in excess of amounts allocable to identifiable assets			—		—			653.3			653.3
Other assets, net			378.1		(187.0	)		—			191.1
Total assets		$	13,041.4	$	(120.7	)	$	(1,673.2	)	$	11,247.5

14

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note B — Reorganization and Emergence from Chapter 11 (continued)

		December 31,									January 1,
		2002									2003
		Predecessor			Emergence from			Fresh-			Reorganized
		Company			Chapter 11			Start			Company
		(in millions)
Liabilities and shareholders’ (deficiency) equity
Liabilities not subject to compromise
Current liabilities:
	Accounts payable	$	385.8		$	0.7		$	—		$	386.5
	Accrued expenses and other		780.5			6.6			(32.7	)		754.4
	Accrued construction costs		70.4			—			—			70.4
	Interest payable		177.3			38.0			—			215.3
	Deferred revenue		359.8			—			—			359.8
	Due to NTL Europe, Inc.		236.1			(234.6	)		—			1.5
	Current portion of long-term debt		5,955.4			(5,952.3	)		—			3.1
Total current liabilities			7,965.3			(6,141.6	)		(32.7	)		1,791.0
Long-term debt			—			6,540.1			—			6,540.1
Long-term debt discount			—			—			(221.3	)		(221.3	)
Other			—			—			47.2			47.2
Deferred income taxes			94.4			—			68.5			162.9
Commitments and contingent liabilities
Liabilities subject to compromise			10,157.8			(10,157.8	)		—			—
Shareholders’ (deficiency) equity:
	Common stock-old		—			—			—			—
	Common stock-new		—			0.5			—			0.5
	Additional paid-in capital		14,045.5			1,194.1			(12,312.5	)		2,927.1
	Accumulated other comprehensive (loss)		(653.6	)		0.4			653.2			—
	(Deficit) retained earnings		(18,568.0	)		8,443.6			10,124.4			—
			(5,176.1	)		9,638.6			(1,534.9	)		2,927.6
Total liabilities and shareholders’(deficiency) equity		$	13,041.4		$	(120.7	)	$	(1,673.2	)	$	11,247.5

Pro Forma Results of Operations

The unaudited condensed consolidated pro forma results of operations for the three months ended March 31, 2002 assuming the emergence from Chapter 11 reorganization and the adoption of fresh-start reporting occurred on January 1, 2002 follows (in millions, except per share data). The pro forma results of operations are not necessarily indicative of the results that would have occurred had the emergence from Chapter 11 reorganization and the adoption of fresh-start reporting occurred on January 1, 2002, or that might occur in the future.

	Three Months Ended
	March 31, 2002
Total revenue	$	792.9
Net (loss)		(203.2	)
Net (loss) per share		(4.02	)

15

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C — Recent Accounting Pronouncements

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

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

Note D — Fixed Assets

Fixed assets consist of:

	March 31,			December 31,
	2003			2002
	Reorganized			Predecessor
	Company			Company
	(unaudited)
	(in millions)
Operating equipment	$	6,723.2		$	13,659.9
Other equipment		637.3			1,295.6
Construction-in-progress		525.4			1,027.8
		7,885.9			15,983.3
Accumulated depreciation		(255.6	)		(4,894.4	)
	$	7,630.3		$	11,088.9

The change in fixed assets is primarily the result of the $3,194.9 million reduction in the carrying value upon the adoption of fresh-start reporting as of January 1, 2003.

Note E — Intangible Assets

Intangible assets consist of:

		March 31,		December 31,
		2003		2002
		Reorganized		Predecessor
		Company		Company
		(unaudited)
		(in millions)
Intangible assets not subject to amortization:
	License acquisition costs	$	—	$	23.6
Intangible assets subject to amortization:
	Customer lists, net of accumulated amortization of $49.1 (2003) and $121.0 (2002)		1,190.6		41.1
		$	1,190.6	$	64.7

16

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note E — Intangible Assets (continued)

The change in intangible assets is primarily the result of the $1,222.6 million increase in the carrying value of customer lists and the $23.6 million decrease in the carrying value of license acquisition costs upon the adoption of fresh-start reporting as of January 1, 2003.

Estimated aggregate amortization expense for each of the five succeeding fiscal years from December 31, 2002 is as follows: $196.4 million in 2003, $196.4 million in 2004, $196.4 million in 2005, $194.9 million in 2006 and $193.9 million in 2007.

Note F- Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

		March 31,		December 31,
		2003		2002
		Reorganized		Predecessor
		Company		Company
		(unaudited)
		(in millions)
Accounts payable		$	—	$	0.6
Interest payable			—		316.8
Due to NTL Europe, Inc.			—		25.2
Accrued expenses			—		1.0
Long-term debt
NTL Communications:
	12 3/4% Senior Deferred Coupon Notes		—		277.8
	11 1/2% Senior Deferred Coupon Notes		—		1,050.0
	10% Senior Notes		—		400.0
	9 1/2% Senior Sterling Notes, less unamortized discount		—		200.8
	10 3/4% Senior Deferred Coupon Sterling Notes		—		439.2
	9 3/4% Senior Deferred Coupon Notes		—		1,193.3
	9 3/4% Senior Deferred Coupon Sterling Notes		—		441.6
	11 1/2% Senior Notes		—		625.0
	12 3/8% Senior Deferred Coupon Notes		—		380.6
	7% Convertible Subordinated Notes		—		489.8
	9 1/4% Senior Euro Notes		—		262.1
	9 7/8% Senior Euro Notes		—		367.0
	11 1/2% Senior Deferred Coupon Euro Notes		—		166.1
	11 7/8% Senior Notes, less unamortized discount		—		491.7
	12 3/8% Senior Euro Notes, plus unamortized premium		—		315.3
	6 3/4% Convertible Senior Notes		—		1,150.0
Diamond Cable:
	13 1/4% Senior Discount Notes		—		285.1
	11 3/4% Senior Discount Notes		—		531.0
	10 3/4% Senior Discount Notes		—		420.5
Diamond Holdings:
	10% Senior Sterling Notes		—		217.3
	9 1/8% Senior Notes		—		110.0
Total		$	—	$	10,157.8

17

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note F- Liabilities Subject to Compromise (continued)

Upon emergence from Chapter 11 reorganization and in accordance with the Plan, all of the outstanding public notes of NTL Communications Corp. were cancelled, and all of the outstanding public notes of Diamond Cable Communications Limited were acquired by NTL Communications Corp. and the former holders of the notes were issued shares of common stock of NTL Incorporated. On February 4, 2003, Diamond Cable Communications Limited was released from any further obligations to pay interest and/or principal on these notes. The Diamond Holdings Notes remain outstanding.

Note G — Long-Term Debt

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

			March 31,		December 31,
			2003		2002
			Reorganized		Predecessor
			Company		Company
			(unaudited)
			(in millions)
NTL Incorporated:
		19% Senior Secured Notes, less unamortized discount of $10.2	$	490.6	$	—
Communications Cable Funding Corp.:
		DIP Facility		—		229.0
NTL Communications Limited and subsidiaries:
		Senior Credit Facility		4,397.2		4,482.1
		Working Capital Credit Facility		644.7		657.1
		Other		61.5		63.2
NTL Triangle:
		11.2% Senior Discount Debentures, less unamortized discount of $137.4 (2003)		379.9		517.3
	Other			3.2		3.6
Diamond:
		10% Senior Sterling Notes, less unamortized discount of $40.6 (2003)		172.6		—
		9 1/8% Senior Notes, less unamortized discount of $31.3 (2003)		78.7		—
		Other		2.9		3.1
				6,231.3		5,955.4
Less current portion				2.6		5,955.4
			$	6,228.7	$	—

In connection with the Company’s emergence from Chapter 11 reorganization, the Company and certain of its subsidiaries issued $558.249 million aggregate principal face amount of 19% Senior Secured Notes due 2010 (the “Exit Notes”) on January 10, 2003. Initial purchasers of the Company’s Exit Notes also purchased 500,000 shares of the Company’s common stock on that date. The gross proceeds from the sale of the Exit Notes and such shares totaled $500.0 million. The proceeds were used in part to repay amounts outstanding under the DIP facility and to purchase from NTL Delaware a £90.0 million note of NTL (UK) Group Inc. and to repay certain other obligations. The Exit Notes are due on January 1, 2010. The Exit Notes are redeemable at the Company’s option after January 10, 2003. Interest on the Exit Notes is payable in cash semiannually from July 1, 2003, with respect to the interest payment due on July 1, 2003, the Company may elect to pay any portion of the interest in cash or by issuance of additional “pay-in-kind” notes. With respect to the interest payments due on January 1, 2004 and July 1, 2004, the Company may make a similar election based on its Available Cash, as defined.

18

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note G — Long-Term Debt (continued)

The effective interest rates on the Company’s variable interest rate debt were as follows:

		March 31,			December 31,
		2003			2002
NTL Communications Limited:
	Senior Credit Facility		7.49	%		6.26	%
	Term Facility		9.49	%		7.76	%
	Working Capital Credit Facility		11.98	%		11.76	%

Note H — Other Charges

Other charges of $2.9 million and $1.6 million in the three months ended March 31, 2003 and 2002, respectively were restructuring charges for employee severance and related costs. These costs in the three months ended March 31, 2003 were incurred for approximately 125 employees, all of whom were terminated by March 31, 2003.

The Company recorded restructuring charges in the fourth quarter of 2002 as a result of actions to reorganize, re-size and reduce operating costs and create greater efficiency in various areas of the Company. These charges included employee severance and related costs for approximately 740 employees to be terminated, of which approximately 25 employees were still employed by the Company as of March 31, 2003.

The following table summarizes the restructuring charges incurred and utilized since December 31, 2002:

	Employee
	Severance
	and Related			Lease Exit			Agreement
	Costs			Costs			Modifications		Other			Total
	(in millions)
Balance, December 31, 2002	$	19.6		$	78.7		$	1.2	$	1.5		$	101.0
Foreign currency exchange translation adjustments		1.2			5.3			0.1		0.1			6.7
Charged to expense		2.9			—			—		—			2.9
Utilized		(18.6	)		(3.8	)		—		(0.4	)		(22.8	)
Balance, March 31, 2003	$	5.1		$	80.2		$	1.3	$	1.2		$	87.8

Note I — Related Party Transactions

The Company’s President — Chief Executive Officer is also the Chairman of ATX Communications, Inc. (“ATX”) (formerly known as CoreComm Holdco, Inc.). Until January 2003, ATX shared resources with the Company related specifically to corporate activity, including corporate employees and a corporate office. In conjunction with these arrangements, the Company provided ATX with management, financial, legal and administrative support services through the use of employees, as well as access to office space and equipment and use of supplies and related office services. The salaries of employees providing service to ATX were charged to ATX by the Company based on the allocation of their time spent providing services to ATX.

Amounts charged to ATX by the Company consisted of direct costs allocated to ATX where indentifiable and a percentage of the portion of the Company’s corporate overhead which cannot be specifically allocated to the Company. It is not practicable to determine the amounts of these expenses that would have been incurred had ATX operated as an unaffiliated entity. In the opinion of management, this allocation method is reasonable. For the three months ended March 31, 2003 and 2002, the Company charged ATX $32,000 and $84,000, respectively, which reduced the Company’s selling, general and administrative expenses.

The Company obtains billing and software development services from ATX. ATX billed the Company $737,000 and $747,000 in the three months ended March 31, 2003 and 2002, respectively for these services.

At March 31, 2003 and December 31, 2002, the Company had a receivable from ATX of $2.5 million and $2.5 million, respectively.

19

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note J — Comprehensive Loss

The Company’s comprehensive loss for the three months ended March 31, 2003 and 2002 was $296.7 million and $536.5 million, respectively.

Note K — Commitments and Contingent Liabilities

At March 31, 2003, the Company was committed to pay $1,399.3 million for equipment and services and for investments in and loans to affiliates. This amount includes $963.0 million for operations and maintenance contracts and other commitments from April 1, 2004 to 2013. The aggregate amount of the fixed and determinable portion of these obligations for the succeeding five fiscal years is as follows (in millions):

Year Ending March 31:
2004	$	436.3
2005		107.6
2006		107.6
2007		106.8
2008		106.8
	$	865.1

The Company is involved in certain other 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.

Note L — Condensed Consolidating Financial Statements of NTL Incorporated

In connection with the Company’s emergence from Chapter 11 reorganization, the Company and certain of its subsidiaries issued the Exit Notes. The Exit Notes are guaranteed on a senior basis by the following subsidiaries of the Company: NTL Digital (US), Inc., CableTel Ventures Limited, Bearsden Nominees, Inc., CableTel Programming, Inc., NTL International Services, Inc. and NTL Funding (NJ), Inc. (collectively referred to as the “Other Guarantors”). The Exit Notes are guaranteed on a subordinated basis by Communications Cable Funding Corp.

The following condensed consolidating financial statements of the Company as of March 31, 2003 and December 31, 2002 and for the three months ended March 31, 2003 and 2002 are provided pursuant to Article 3-10(c) of Regulation S-X.

20

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note L — Condensed Consolidating Financial Statements of NTL Incorporated (continued)

	(unaudited) (in millions)
	Three Months Ended March 31, 2003
																Consolidated
				Communications Cable			Other			All						NTL
Statement of Operations	NTL Incorporated			Funding			Guarantors			Other Subsidiaries			Adjustments			Incorporated
Revenue	$	—		$	—		$	—		$	875.9		$	—		$	875.9
Costs and expenses
Operating expenses (exclusive of depreciation shown separately below)		—			—			0.2			408.4			—			408.6
Selling, general and administrative expenses		137.0			—			—			79.5			—			216.5
Other charges		0.8			—			—			2.1			—			2.9
Depreciation		—			—			—			259.2			—			259.2
Amortization		—			—			—			49.8			—			49.8
		137.8			—			0.2			799.0			—			937.0
Operating (loss) income		(137.8	)		—			(0.2	)		76.9			—			(61.1	)
Other income (expense)
Interest income and other, net		0.6			0.4			1.3			1.9			(1.5	)		2.7
Interest expense		(25.0	)		(2.8	)		(0.9	)		(199.1	)		51.3			(176.5	)
Recapitalization expense		—			—			—			—			—			—
Share of (losses) income from equity investments		(81.7	)		—			0.1			—			81.7			0.1
Foreign currency transaction (losses)		—			—			(0.3	)		(3.1	)		—			(3.4	)
(Loss) before income taxes		(243.9	)		(2.4	)		—			(123.4	)		131.5			(238.2	)
Income tax (expense)		(10.5	)		—			—			(5.7	)		—			(16.2	)
Net (loss)	$	(254.4	)	$	(2.4	)	$	—		$	(129.1	)	$	131.5		$	(254.4	)

	January 1, 2003
													Consolidated
				Communications Cable		Other		All					NTL
	NTL Incorporated			Funding		Guarantors		Other Subsidiaries			Adjustments		Incorporated
Gain on debt discharge	$	7,322.8		$	—	$	—	$	1,128.8		$	—	$	8,451.6
Fresh-start adoption — intangible assets		—			—		—		1,521.7			—		1,521.7
Fresh-start adoption — long-term debt		—			—		—		221.3			—		221.3
Fresh-start adoption — deferred tax liability		—			—		—		(68.6	)		—		(68.6	)
Fresh-start adoption — accrued expenses		—			—		—		(120.4	)		—		(120.4	)
Fresh-start adoption — fixed assets		(0.8	)		—		—		(3,194.1	)		—		(3,194.9	)
Recapitalization expense		(8.0	)		—		—		—			—		(8.0	)
Share of (losses) from equity investments		(511.3	)		—		—		—			511.3		—
Net income	$	6,802.7		$	—	$	—	$	(511.3	)	$	511.3	$	6,802.7

21

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note L — Condensed Consolidating Financial Statements of NTL Incorporated (continued)

(unaudited)
(in millions)

	Three Months Ended March 31, 2002
				Communications					All						Consolidated
				Cable		Other			Other						NTL
Statement of Operations	NTL Incorporated			Funding		Guarantors			Subsidiaries			Adjustments			Incorporated
Revenue	$	—		$	—	$	—		$	792.9		$	—		$	792.9
Costs and expenses
Operating expenses (exclusive of depreciation shown separately below)		—			—		0.3			380.6			—			380.9
Selling, general and administrative expenses		6.8			—		(0.1	)		185.3			—			192.0
Other charges		—			—		—			1.6			—			1.6
Depreciation		0.1			—		—			322.4			—			322.5
Amortization		6.5			—		—			8.4			—			14.9
		13.4			—		0.2			898.3			—			911.9
Operating (loss)		(13.4	)		—		(0.2	)		(105.4	)		—			(119.0	)
Other income (expense)
Interest income and other, net		6.0			—		1.2			3.2			(1.0	)		9.4
Interest expense		(196.4	)		—		(1.1	)		(129.4	)		2.1			(324.8	)
Recapitalization expense		(18.9	)		—		—			(13.2	)		—			(32.1	)
Share of (losses) income from equity investments		(273.3	)		—		0.3			—			273.3			0.3
Foreign currency transaction (losses) gains		36.1			—		—			(41.1	)		—			(5.0	)
(Loss) before income taxes		(459.9	)		—		0.2			(285.9	)		274.4			(471.2	)
Income tax benefit		—			—		—			11.3			—			11.3
Net (loss)	$	(459.9	)	$	—	$	0.2		$	(274.6	)	$	274.4		$	(459.9	)

22

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note L — Condensed Consolidating Financial Statements of NTL Incorporated (continued)

(unaudited, except December 31, 2002)
(in millions)

	March 31, 2003
			Communications					All					Consolidated
	NTL		Cable		Other			Other					NTL
Balance Sheet	Incorporated		Funding		Guarantors			Subsidiaries		Adjustments			Incorporated
Current assets	$	223.1	$	424.8	$	0.1		$	810.8	$	(417.4	)	$	1,041.4
Investments in and loans to affiliates, net		2,936.6		2,853.0		6.2			—		(5,789.6	)		6.2
Fixed and noncurrent assets		—		—		105.2			9,630.0		(105.0	)		9,630.2
Total assets	$	3,159.7	$	3,277.8	$	111.5		$	10,440.8	$	(6,312.0	)	$	10,677.8
Current liabilities	$	38.2	$	160.4	$	—		$	1,563.3	$	(156.1	)	$	1,605.8
Noncurrent liabilities		490.6		2,643.6		133.8			8,680.2		(5,507.1	)		6,441.1
Liabilities subject to compromise		—		—		—			—		—			—
Shareholders’ equity (deficiency)		2,630.9		473.8		(22.3	)		197.3		(648.8	)		2,630.9
Total liabilities and shareholders’ equity (deficiency)	$	3,159.7	$	3,277.8	$	111.5		$	10,440.8	$	(6,312.0	)	$	10,677.8

	December 31, 2002
				Communications					All						Consolidated
	NTL			Cable		Other			Other						NTL
Balance Sheet	Incorporated			Funding		Guarantors			Subsidiaries			Adjustments			Incorporated
Current assets	$	47.4		$	454.3	$	2.5		$	1,033.7		$	(367.2	)	$	1,170.7
Investments in and loans to affiliates, net		3,413.9			18,645.8		8.4			—			(22,059.7	)		8.4
Fixed and noncurrent assets		128.7			162.8		102.2			11,570.6			(102.0	)		11,862.3
Total assets	$	3,590.0		$	19,262.9	$	113.1		$	12,604.3		$	(22,528.9	)	$	13,041.4
Current liabilities	$	245.8		$	122.6	$	0.4		$	7,594.4		$	2.1		$	7,965.3
Noncurrent liabilities		—			2,784.3		135.2			7,053.4			(9,878.5	)		94.4
Liabilities subject to compromise		8,520.3			—		—			1,637.5			—			10,157.8
Shareholders’ equity (deficiency)		(5,176.1	)		16,356.0		(22.5	)		(3,681.0	)		(12,652.5	)		(5,176.1	)
Total liabilities and shareholders’ equity (deficiency)	$	3,590.0		$	19,262.9	$	113.1		$	12,604.3		$	(22,528.9	)	$	13,041.4

23

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note L — Condensed Consolidating Financial Statements of NTL Incorporated (continued)

(unaudited)
(in millions)

	Three Months Ended March 31, 2003
				Communications											Consolidated
	NTL			Cable		Other			All						NTL
Statement of Cash Flows	Incorporated			Funding		Guarantors			Other Subsidiaries			Adjustments			Incorporated
Net cash (used in) provided by operating activities	$	(89.6	)	$	0.5	$	(2.4	)	$	105.7		$	7.3		$	21.5
Net cash (used in) provided by investing activities		(4.8	)		2.1		2.3			(185.2	)		(7.3	)		(192.9	)
Net cash (used in) financing activities		—			—		—			(2.4	)		—			(2.4	)
Effect of exchange rate changes on cash and cash equivalents		—			—		—			(5.2	)		—			(5.2	)
Decrease (increase) cash and cash equivalents		(94.4	)		2.6		(0.1	)		(87.1	)		—			(179.0	)
Cash and cash equivalents at beginning of period		295.2			3.3		0.2			342.0			—			640.7
Cash and cash equivalents at end of period	$	200.8		$	5.9	$	0.1		$	254.9		$	—		$	461.7

	January 1, 2003
				Communications											Consolidated
	NTL			Cable			Other		All						NTL
Statement of Cash Flows	Incorporated			Funding			Guarantors		Other Subsidiaries			Adjustments			Incorporated
Net cash (used in) provided by operating activities	$	(69.7	)	$	49.6		$	—	$	—		$	(26.8	)	$	(46.9	)
Net cash (used in) provided by investing activities		(171.3	)		162.8			—		—			171.3			162.8
Net cash provided by (used in) financing activities		500.0			(229.0	)		—		(103.7	)		(144.5	)		22.8
Increase (decrease) in cash and cash equivalents		259.0			(16.6	)		—		(103.7	)		—			138.7
Cash and cash equivalents at beginning of period		36.2			19.9			0.2		445.7			—			502.0
Cash and cash equivalents at end of period	$	295.2		$	3.3		$	0.2	$	342.0		$	—		$	640.7

	Three Months Ended March 31, 2002
				Communications											Consolidated
	NTL			Cable		Other			All						NTL
Statement of Cash Flows	Incorporated			Funding		Guarantors			Other Subsidiaries			Adjustments			Incorporated
Net cash (used in) provided by operating activities	$	(110.9	)	$	—	$	5.0		$	(43.5	)	$	82.1		$	(67.3	)
Net cash provided by (used in) investing activities		80.2			—		(3.8	)		(214.5	)		(82.1	)		(220.2	)
Net cash provided by financing activities		3.7			—		—			429.5			—			433.2
Effect of exchange rate changes on cash and cash equivalents		—			—		—			(3.5	)		—			(3.5	)
(Decrease) increase in cash and cash equivalents		(27.0	)		—		1.2			168.0			—			142.2
Cash and cash equivalents at beginning of period		78.5			—		0.1			172.5			—			251.1
Cash and cash equivalents at end of period	$	51.5		$	—	$	1.3		$	340.5		$	—		$	393.3

24

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note M- Segment Data

The Company implemented a reorganization of certain of its business units in the three months ended March 31, 2003. The associated changes included moving its Wholesale Internet division from Business to Consumer, its Public Safety division from Business to Broadcast and the creation of Carriers by merging its carriers division with its mobile division and removing both from Business. These changes better align the expertise in the divisions with the needs of the Company’s customers. In addition, the allocation of certain costs from Shared Services to the various business units and the allocation of costs between Consumer and Business have changed. Finally, NTL Ireland is a separate business unit for financial reporting purposes effective January 1, 2003. Amounts in prior periods have been reclassified to conform to the current presentation.

The Company’s primary measure of profit or loss for each reportable segment is Operating EBITDA as defined below. The Company considers Operating EBITDA an important indicator of the operational strength and performance of its reportable segments, including the ability to provide cash flows to service debt and fund capital expenditures. Operating EBITDA excludes the impact of costs and expenses that do not directly effect cash flows such as depreciation, amortization and share of income from equity investments. The Company also excludes costs and expenses that are not directly related to the performance of a single reportable segment from Operating EBITDA rather than allocating these costs and expenses to multiple reportable segments. Other charges, recapitalization expense and foreign currency transactions are not directly related to a single segment. Operating EBITDA should be considered in addition to, not as a substitute for, operating (loss), net (loss) and other measures of financial performance reported in accordance with generally accepted accounting principles.

		Revenues				Operating EBITDA (1)
		Three Months Ended				Three Months Ended
		March 31,				March 31,
		2003		2002		2003			2002
		(in millions)
Consumer		$	580.3	$	516.2	$	244.7		$	202.8
Business			120.2		118.3		33.8			28.4
Broadcast			103.1		91.8		45.8			40.2
Carrier			44.2		47.1		35.6			38.5
Ireland			28.1		19.5		7.9			3.7
Shared			—		—		(117.0	)		(93.6	)
	Total	$	875.9	$	792.9	$	250.8		$	220.0

		Total Assets
		March 31,		December 31,
		2003		2002
		(in millions)
Consumer		$	6,467.8	$	7,790.0
Business			1,714.7		3,299.2
Broadcast			1,417.2		539.6
Carrier			174.0		156.5
Ireland			175.5		206.1
Shared (2)			728.6		1,050.0
	Total	$	10,677.8	$	13,041.4

(1)	Represents earnings before interest, taxes, depreciation, amortization, other charges, share of income from equity investments, foreign currency transaction (losses) and recapitalization expense.
(2)	At March 31, 2003, shared assets included $465.8 million of cash, cash equivalents and marketable securities and $262.8 million of other assets. At December 31, 2002, shared assets included $458.2 million of cash and cash equivalents and $591.8 million of other assets.

25

NTL Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note M- Segment Data (continued)

The reconciliation of segment combined Operating EBITDA to (loss) before income taxes is as follows:

		Three Months Ended March 31,
		2003			2002
	(in millions)
Segment combined Operating EBITDA		$	250.8		$	220.0
(Add) deduct:
Other charges			2.9			1.6
Depreciation			259.2			322.5
Amortization			49.8			14.9
Interest income and other, net			(2.7	)		(9.4	)
Interest expense			176.5			324.8
Share of (income) from equity investments			(0.1	)		(0.3	)
Foreign currency transaction losses			3.4			5.0
Recapitalization items, net			—			32.1
			489.0			691.2
(Loss) before income taxes		$	(238.2	)	$	(471.2	)

26

NTL Incorporated and Subsidiaries

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

NTL’s Completed Restructuring

On May 8, 2002, NTL Incorporated (then known as NTL Communications Corp.), NTL Europe, Inc. (“NTL Europe”) (then known as NTL Incorporated) and certain of our and NTL Europe’s subsidiaries filed a pre-arranged joint reorganization plan under Chapter 11 of the U.S. Bankruptcy Code. Our operating subsidiaries and those of NTL Europe were not included in the Chapter 11 filing. The Plan became effective on January 10, 2003, at which time we emerged from Chapter 11 reorganization.

Pursuant to the Plan, the entity formerly known as NTL Incorporated and its subsidiaries and affiliates were split into two separate groups, and we and NTL Europe each emerged as independent public companies. The entity formerly known as NTL Communications Corp. (the registrant) was renamed “NTL Incorporated” and became the holding company for the former NTL group’s principal UK and Ireland assets. Prior to consummation of the Plan, we were a wholly-owned subsidiary of the entity then known as NTL Incorporated, which, pursuant to the Plan, was renamed “NTL Europe, Inc.” and which became the holding company for the former NTL group’s continental European and certain other assets. Pursuant to the Plan, all of the outstanding securities of our former ultimate parent company (NTL Europe) and certain of its subsidiaries, including us, were cancelled, and we issued shares of our common stock and Series A warrants and NTL Europe issued shares of its common stock and preferred stock to various former creditors and stockholders of our former ultimate parent company and its subsidiaries, including us. The precise mix of new securities received by holders of each particular type of security of our former parent company and its subsidiaries was set forth in the Plan. The outstanding notes of Diamond Holdings Limited and NTL (Triangle) LLC were not cancelled and remain outstanding.

Background of Restructuring

Both the equity and debt capital markets experienced periods of significant volatility in 2001 and 2002, particularly for securities issued by telecommunications and technology companies. As a result, the ability of our former ultimate parent company and its subsidiaries to access those markets as well as its ability to obtain financing from its bank lenders and equipment suppliers became severely restricted. In addition, our former ultimate parent company and its subsidiaries, including us, had no further funds available, or were unable to draw upon funds under our credit facilities. As a result of these factors, together with its substantial leverage, on January 31, 2002, our former ultimate parent company announced that it had appointed professional advisors to advise on strategic and recapitalization alternatives to strengthen its balance sheet, reduce debt and put an appropriate capital structure in place for its business.

Promptly upon obtaining the requisite waivers from the lenders under its credit facilities, in March 2002, our former ultimate parent company commenced negotiations with a steering committee of the unofficial committee of its bondholders and the committee’s legal and financial advisors.

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

On April 16, 2002, our former ultimate parent company announced that it and the unofficial committee of its bondholders had reached an agreement in principle on a comprehensive recapitalization of the former NTL group. To implement the proposed recapitalization plan, on May 8, 2002, we, our former ultimate parent company and certain of our former ultimate parent company’s other subsidiaries filed cases and a pre-arranged joint reorganization plan under Chapter 11 of the U.S. Bankruptcy Code. In connection with the filing, some members of the unofficial creditors’ committee of bondholders entered into a credit facility agreement (referred to as the DIP facility) committing to provide a wholly-owned subsidiary of ours with up to $500 million in new debt financing. NTL Delaware committed to provide up to an additional $130 million to us under the DIP facility.

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

The Plan was confirmed by the Bankruptcy Court on September 5, 2002. During the fall of 2002, our former ultimate parent company

27

negotiated with a group of lenders to enter into a new financing arrangement to repay the DIP facility, to repay certain obligations and to provide liquidity to us and our subsidiaries. The Plan became effective on January 10, 2003 (referred to as the Effective Date), at which time we emerged from Chapter 11 reorganization. In connection with our emergence from Chapter 11 reorganization, we and certain of our subsidiaries issued $558.249 million aggregate principal face amount of 19% Senior Secured Notes due 2010 (the Exit Notes) on January 10, 2003. Initial purchasers of our Exit Notes also purchased 500,000 shares of our common stock on that date. The gross proceeds from the sale of our Exit Notes and such shares totaled $500.0 million. The proceeds were used in part to repay all amounts outstanding under the DIP facility and to purchase from NTL Delaware a £90.0 million note of NTL (UK) Group Inc. and to repay certain other obligations. Also on January 10, 2003, we and our lending banks amended our existing credit facilities.

Liquidity and Capital Resources

We have historically incurred operating losses and negative operating cash flow. In addition, we required and expect to continue to require significant amounts of capital to finance construction of our networks, connection of customers to the networks, other capital expenditures and for working capital needs including debt service requirements.

We currently expect that we will require between £5.0 million and £15.0 million to fund our working capital including debt service and capital expenditures, net of cash from operations, in the twelve months from April 1, 2003 to March 31, 2004. We believe that cash, cash equivalents and marketable securities on hand of $478.8 million as of March 31, 2003 will be sufficient for our cash requirements during the twelve months from April 1, 2003 to March 31, 2004.

Over the long term, we will continue to require cash to fund operations, service or repay our debt and implement our strategy. In order to fund these requirements, we anticipate that we will use cash flow from operations and may also need to issue additional debt or equity securities or may need to secure additional bank financing. Given the restrictions on incurring additional debt in the indentures governing our outstanding notes, there can be no assurance that these sources of funds will be available to us.

The indentures governing our outstanding notes, among other things, restrict and, in some cases, prohibit our ability and the ability of most of our subsidiaries to incur additional debt, create or incur liens, and sell assets. In addition, we and our subsidiaries must comply with certain financial covenants in these debt instruments. The Senior Credit Facility and Working Capital Credit Facility also impose restrictions on our ability and the ability of most of our subsidiaries to incur additional debt and other extensive restrictions on most of our subsidiaries, including restrictions on the ability of such subsidiaries to create or incur liens and sell assets. In addition, we and most of our subsidiaries must comply with and meet certain financial covenants in these credit facilities.

Our ability to meet our funding requirements is dependent upon a number of factors, including our existing cash balances, the cash flow generated by our operating subsidiaries, and our ability to obtain additional financing in the future. Failure to achieve profitability or maintain or achieve various other financial performance levels could in the future diminish our ability to sustain operations, meet financial covenants, obtain additional funds, and make required payments on our indebtedness.

Based on preliminary valuations of our pension plans, as of December 31, 2002, we believe the projected benefit obligations of certain of our defined benefit plans exceeded the fair value of plan assets by an aggregate of approximately £81.0 million ($128 million). We will need to fund this deficit in accordance with the laws and regulations in the UK. We currently believe we will have to use cash of approximately £8 million per year beginning in 2003 to meet the UK requirements. The valuation of our pension plans requires the use of assumptions and estimates. Changes in these assumptions and estimates as well as future investment returns could potentially have a material impact, either upwards or downwards, on this estimated funding requirement.

We are a holding company with no independent operations or significant assets other than our investments in and advances to our subsidiaries. We depend upon the receipt of sufficient funds from our subsidiaries to meet our obligations. In addition, the terms of our and our subsidiaries existing and future indebtedness and the laws of the jurisdictions under which those subsidiaries are organized limit the payment of dividends, loan repayments and other distributions to us under many circumstances.

28

Description of Outstanding Notes and Credit Facilities

The following summarizes the terms of the significant notes and credit facilities issued by us and our subsidiaries and outstanding as of March 31, 2003:

NTL Incorporated:

     (1) 19% Senior Secured Notes (Exit Notes) due January 1, 2010; principal amount at maturity of $558.249 million; redeemable at the Company’s option after January 10, 2003; interest payable in cash semiannually from July 1, 2003; with respect to the interest payment due on July 1, 2003, we may elect to pay any portion of the interest in cash or by issuance of additional “pay-in-kind” notes; with respect to the interest payments due on January 1, 2004 and July 1, 2004, we may make a similar election based on our Available Cash, as defined;

NTL Communications Limited:

     (2) Working Capital Credit Facility originally dated May 30, 2000 (and subsequently amended and restated) of approximately £408.3 million ($644.7 million), all of which was outstanding as of December 31, 2002; interest payable at least every six months at LIBOR plus mandatory costs plus a margin rate which commenced at 4.50% per annum and increases by 0.50% per annum at the end of each quarter after the date upon which the facility was first utilized (subject to a cap on total interest of 16% per annum and a cap on total interest payable in cash of 14% per annum (any excess being added to principal)); effective interest rate of 11.98% per annum at March 31, 2003; principal is due in full on March 31, 2006;

NTL Investment Holdings Limited (a wholly owned subsidiary of NTL Communications Limited):

     (3) Senior Credit Facility originally dated May 30, 2000 (and subsequently amended and restated) of £2,784.8 million ($4,397.2 million), all of which was outstanding as of December 31, 2002; comprising a revolving facility of £2,584.8 million ($4,081.4 million) and a term facility of £200.0 million ($315.8 million); interest payable at least every six months at LIBOR plus mandatory costs plus a margin rate which, in the case of the revolving facility, is fixed at 3.50% per annum for six months from January 10, 2003 and which then varies, depending upon satisfaction of a financial covenant over six monthly periods, between 4.00% and 2.50% per annum and which, in the case of the term facility, is fixed at 5.50% per annum; effective interest rate on the revolving facility of 7.49% per annum at March 31, 2003; effective interest rate on the term facility of 9.49% per annum at March 31, 2003; the unused portion of the commitment to make the revolving facility available 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 then outstanding under the revolving facility is due in full on September 30, 2005; principal under the term facility is due in six quarterly installments beginning on June 30, 2006 and increasing from £5 million repayments due on the first two repayment dates to £10 million repayments due on the next three repayment dates with the balance being due on September 30, 2007;

NTL Triangle:

     (4) 11.2% Senior Discount Debentures due November 15, 2007, principal amount at maturity of $517.3 million, interest payable semiannually from May 15, 2001, redeemable at NTL Triangle’s option after November 15, 2000;

29

Diamond Holdings:

     (5) 10% Senior Sterling Notes due February 1, 2008; principal amount at maturity of £135.0 million ($213.2 million); interest payable semiannually from August 1, 1998; redeemable at Diamond Holdings’ option on or after February 1, 2003; and

     (6) 9 1/8% Senior Notes due February 1, 2008; principal amount at maturity of $110.0 million; interest payable semiannually from August 1, 1998; redeemable at Diamond Holdings’ option on or after February 1, 2003.

Contractual Obligations and Commercial Commitments

The following table includes aggregate information about the Company’s contractual obligations as of March 31, 2003 and the periods in which payments are due.

Payments Due by Period

			Less than		1-3		4-5		After
Contractual Obligations	Total		1 Year		Years		Years		5 Years
	(in millions)
Long-Term Debt	$	6,440.6	$	—	$	4,726.1	$	1,156.3	$	558.2
Capital Lease Obligations		198.2		8.5		14.4		13.3		162.0
Operating Leases		788.0		89.4		144.5		123.0		431.1
Unconditional Purchase Obligations		1,399.3		436.3		215.2		213.7		534.1
Other Long-Term Obligations	none
Total Contractual Cash Obligations	$	8,826.1	$	534.2	$	5,100.2	$	1,506.3	$	1,685.4

The following table includes aggregate information about the Company’s commercial commitments as of March 31, 2003. Commercial commitments are items that the Company could be obligated to pay in the future. They are not required to be included in the consolidated balance sheet.

Amount of Commitment Expiration Per Period

	Total Amounts		Less than		1-3		4-5		Over
Other Commercial Commitments	Committed		1 Year		Years		Years		5 Years
	(in millions)
Guarantees	$	33.4	$	4.9	$	15.1	$	0.2	$	13.2
Lines of Credit	none
Standby Letters of Credit	none
Standby Repurchase Obligations	none
Other Commercial Commitments	none
Total Commercial Commitments	$	33.4	$	4.9	$	15.1	$	0.2	$	13.2

Consolidated Statements of Cash Flows

Cash provided by (used in) operating activities was $21.5 million and $(67.3) million in the three months ended March 31, 2003 and 2002, respectively. Cash paid for interest exclusive of amounts capitalized in the three months ended March 31, 2003 and 2002 was $217.1 million and $187.1 million, respectively. In addition, the change in cash used in operating activities is also due to changes in working capital as a result of the timing of receipts and disbursements.

Purchases of fixed assets were $185.2 million in the three months ended March 31, 2003 and $214.5 million in the three months ended March 31, 2002 as a result of the continuing fixed asset purchases and construction. Purchases of fixed assets in 2003 are primarily related to customer premise equipment, scaleable infrastructure and billing system integrations.

Proceeds from borrowings, net of financing costs, of $430.4 million in the three months ended March 31, 2002 includes $439.6 million borrowed under the NTLCL Working Capital Credit Facility.

30

Results of Operations

We implemented a reorganization of certain of our business units in the three months ended March 31, 2003. The associated changes included moving our Wholesale Internet division from NTL Business to NTL Home, our Public Safety division from NTL Business to NTL Broadcast and the creation of NTL Carriers by merging our carriers division with our mobile division and removing both from NTL Business. These changes better align the expertise in the divisions with the needs of our customers. In addition, the allocation of certain costs from Shared Services to the various business units and the allocation of costs between NTL Home and NTL Business have changed. Corporate Expenses are now included in the Central Support business unit and are grouped with selling, general and administrative expenses in our statement of operations. Finally, NTL Ireland is a separate business unit for financial reporting purposes effective January 1, 2003. We have reclassified amounts in prior periods to conform to the current period presentation.

We provide a broad range of communication services, including: (1) consumer telecommunications and television, (2) business telecommunications, (3) broadcast transmission and other related services and (4) carrier telecommunications services. Our consumer telecommunications and television services comprise broadband services to consumer markets including residential telephone, analog and digital cable television, Internet access and interactive services, as well as wholesale Internet access solutions to UK Internet service providers. Our business telecommunications services include business data, voice and Internet services. Our broadcast transmission and other services include digital and analog television and radio broadcast transmission services, tower site rental, satellite and media services for programmers, news agencies, sports broadcasters and production companies, and radio communications services to the public safety sector. Our carrier services division provides transmission, fiber and voice services for other telecommunications service providers over our national network in the UK and Ireland.

In our consumer telecommunications and television segment, we derive revenues principally from monthly fees and usage charges for (1) telephone service, (2) cable television service and (3) Internet access. Our packaging and pricing are designed to encourage our customers to use multiple services such as dual telephone and broadband, dual telephone and TV or triple telephone, TV and Internet access.

In our business telecommunications segment, we derive revenues principally from monthly fees and usage charges for inbound and outbound voice, data and Internet services.

In our broadcast transmission and other services segment, we derive revenues principally from charges for (1) site leasing services, (2) national and regional television broadcasting, (3) national, regional and local radio broadcasting, (4) satellite up-linking for program and content distribution and (5) charges for various outstanding arrangements provided to public safety customers.

In our carrier services segment, we derive revenues principally from charges for transmission, fiber and voice services provided to other telecommunications service providers over our national network in the UK and Ireland.

The principal components of our expenses include (1) costs to connect our network to other networks (referred to as interconnection), (2) television programming costs, (3) payroll and other employee related costs, (4) repairs and maintenance, (5) facility related costs, such as rent, utilities and rates, (6) marketing and selling costs and (7) provisions for bad debts.

As expected, our growth in 2002 was curtailed by funding constraints. Cash constraints present many challenges to the successful execution of our business plan. We are conserving cash by minimizing capital expenditures including expenditures to connect new customers to our network. In order to maintain revenues and cash from operations, we must reduce and limit customer churn. We continue to focus on improving our customer service and increasing our service offering to customers in an effort to curtail and reduce churn. We are in the process of integrating our various billing systems and customer databases in an effort to improve one of the main tools we use to provide customer service. This effort is at a relatively early stage although we have continued to make progress through March 31, 2003. Although the new system does not yet support our full suite of services, we expect to substantially complete the project by the third quarter of 2004. The total project cost is estimated to be approximately £75.0 million, of which we have incurred approximately £30.1 million through March 31, 2003. We cannot be certain that this project will be successful. If the full integration is not successful, we could experience an adverse effect on customer service, our churn rate and our costs of maintaining these systems going forward. We could also experience operational failures related to billing and collecting revenue from our customers, which, depending upon on the severity of the failure, could have a material adverse effect on our business.

31

Moreover, the integration process has involved a number of internal reorganizations of our business as we continue to strive for better performance. These reorganizations have typically involved, among other things, the termination of employees made redundant as a result of the process. Although we cannot predict precisely the effect that this has had, it is likely these internal reorganizations have negatively impacted employee morale. If we undertake additional internal reorganizations they will similarly likely negatively impact employee morale. Negative effects on employee morale can have a negative effect on our operations generally.

Our plan to reduce churn and to increase average revenue per unit (referred to as ARPU) includes an increase in broadband services to our existing customers. We believe that our triple play offering of telephony, broadband access to the Internet and digital television will continue to prove attractive to our existing customer base, which will result in higher ARPU as revenues per existing customer increase. However, there is still significant competition in our markets, through digital satellite and digital terrestrial television and through alternative Internet access media, such as DSL offered by BT. If in the future we are unable to charge the prices for these services that we anticipate in our business plan in response to competition or if our competition is able to attract our customers, our results of operations will be adversely affected.

The wholesale national and international telecommunications market saw the reorganization or bankruptcy of many of the new entrant operators in 2002, especially those companies whose focus had been on serving carriers. As a result of this, several customers that had signed contracts with us running through 2003 are no longer in business. While this will have some effect on our revenue for 2003, most of our existing contracts are now with telecommunications companies with high volumes of retail traffic. Furthermore, our sales focus is on UK telecommunications companies who service the retail rather than the wholesale markets. We attempt to structure commercial arrangements to minimize any financial exposure to another operator.

Media speculation regarding our recent Chapter 11 reorganization and financial condition could have an adverse effect on parts of our business. Similarly, negative press about the financial condition of alternative telecom carriers in general may adversely affect our reputation. One of the key strategies in our business plan is to increase our penetration of higher value small to medium size enterprises (or SMEs) and provide increased retail services of bundled voice, data and Internet services for SMEs. However, due to the negative publicity surrounding our recent Chapter 11 reorganization and financial condition and the potential effect of that publicity on our brand name, we may find it difficult to increase market share. We believe our recapitalization process and the general unfavorable climate for alternative telecom carriers affected our revenues in 2002 as prospective customers began deferring orders beginning in the fourth quarter of 2001. Even though we have successfully completed the recapitalization process, there is no assurance that such negative publicity will not adversely impact our results of operations or have a long-term effect on our brand.

In addition, this uncertainty may adversely affect our relationships with suppliers. If suppliers become increasingly concerned about our financial condition, they may demand faster payments or refuse to extend normal trade credit, both of which could further adversely affect our cash conservation measures and our results of operations. However, this did not have a significant effect on results of operations or cash flows in 2002 or in the three months ended March 31, 2003.

NTL Ireland has now introduced a more rigorous credit policy that will lead to the involuntary disconnection of certain customers. As a result of this, NTL Ireland anticipates that its residential customer base will continue to decline by approximately 25,000 customers during the remainder of 2003. As a result, we expect a decline in revenue, programming costs and bad debt expense, but taken together we believe these changes will not have a significant overall impact on our results of operations or cash flows.

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

We operated our business as a debtor-in-possession subject to the jurisdiction of the U.S. Bankruptcy Court during the period from May 8, 2002 until January 10, 2003. Accordingly, our consolidated financial statements for periods prior to our emergence from Chapter 11 reorganization were prepared in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (“SOP 90-7”). In addition, we adopted fresh-start reporting upon our emergence from Chapter 11 reorganization in accordance with SOP 90-7. For financial reporting purposes, the effects of the consummation of the Plan as well as adjustments for fresh-start reporting have been recorded in our consolidated financial statements as of January 1, 2003.

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Pursuant to fresh-start reporting, a new entity was deemed created for financial reporting purposes and the carrying value of assets and liabilities was adjusted. The carrying value of assets was adjusted to their reorganization value that was equivalent to their estimated fair value. The carrying value of liabilities was adjusted to their present value.

The emergence from Chapter 11 and the adoption of fresh-start reporting as of January 1, 2003 resulted in the following items of income (expense) that were recognized on that date (in millions):

	January 1,
	2003
	Predecessor
	Company
Gain on debt discharge	$	8,451.6
Fresh-start adoption — intangible assets		1,521.7
Fresh-start adoption — long-term debt		221.3
Fresh-start adoption — deferred tax liability		(68.6	)
Fresh-start adoption — accrued expenses		(120.4	)
Fresh-start adoption — fixed assets		(3,194.9	)
Recapitalization expense		(8.0	)
Net income	$	6,802.7

Three Months Ended March 31, 2003 and 2002

Consolidated revenues increased by 10.5% to $875.9 million in the three months ended March 31, 2003, as compared to $792.9 million in the three months ended March 31, 2002. Consolidated revenues in UK pounds decreased by 1.7% to £546.5 million from £556.1 million.

In the three months ended March 31, 2003 and 2002, the United Kingdom accounted for 96.8% and 97.5%, respectively and Ireland accounted for 3.2% and 2.5%, respectively of total consolidated revenues.

Consolidated revenues in dollars and UK pounds were comprised of the following:

		Three Months Ended
		March 31,
		2003		2002
		(in millions)
Consumer		$	580.3	$	516.2
Business			120.2		118.3
Broadcast			103.1		91.8
Carrier			44.2		47.1
Ireland			28.1		19.5
	Total revenue	$	875.9	$	792.9
Consumer			£362.1		£362.0
Business			75.0		83.0
Broadcast			64.3		64.4
Carrier			27.6		33.0
Ireland			17.5		13.7
	Total revenue		£546.5		£556.1

In the three months ended March 31, 2003 and 2002, consumer telecommunications and television revenues were 66.3% and 65.1%, respectively, business telecommunications revenues were 13.7% and 14.9%, respectively, broadcast transmission and other revenues were 11.8% and 11.6%, respectively, carrier revenues were 5.0% and 5.9%, respectively and Ireland revenues were 3.2% and 2.5%, respectively of total consolidated revenues.

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Consumer telecommunications and television revenues increased by 12.4% to $580.3 million from $516.2 million as a result of changes in foreign currency exchange rates. These revenues in UK pounds increased by less than 1.0% to £362.1 million from £362.0 million. Consumer telecommunications and television revenues were effectively unchanged reflecting the decline in the customer base due to disconnects, which was offset by an increase in broadband Internet services, the impact of price increases and growth in our wholesale Internet services business.

Business telecommunications revenues increased by 1.6% to $120.2 million from $118.3 million as a result of changes in foreign currency exchange rates. These revenues in UK pounds decreased by 9.6% to £75.0 million from £83.0 million. Business telecommunications revenues decreased principally as a result of uncertainties arising from our Chapter 11 reorganization and the general climate for competitive telecoms service providers.

Broadcast transmission and other revenues increased by 12.3% to $103.1 million from $91.8 million as a result of changes in foreign currency exchange rates. These revenues in UK pounds decreased by less than 1.0% to £64.3 million from £64.4 million due to modest increases in site sharing and public safety revenues offset by modest decreases in other revenues.

Carrier revenues decreased 6.2% to $44.2 million from $47.1 million. These revenues in UK pounds decreased by 16.4% to £27.6 million from £33.0 million. The primary reason for this decline was the recognition of £7.1 million ($10.1 million) of deferred revenue in the three months ended March 31, 2002 related to the termination of a long-term contract upon the financial distress of one of the division’s customers.

NTL Ireland revenues increased 44.1% to $28.1 million from $19.5 million. These revenues in UK pounds increased 27.7% to £17.5 million from £13.7 million. The primary reasons for the increase were growth in digital television customers, a price increase that became effective in January 2003 and an increase in business sector revenues.

Operating expenses (including network expenses) increased 7.3% to $408.6 million from $380.9 million as a result of changes in foreign currency exchange rates. These expenses in UK pounds decreased 4.5% to £255.0 million from £267.1 million primarily as a result of decreases in telephony interconnection and television programming costs. Operating expenses as a percentage of revenues declined to 46.6% in 2003 from 48.0% in 2002.

Selling, general and administrative expenses increased 12.8% to $216.5 million from $192.0 million primarily as a result of changes in foreign currency exchange rates. These expenses in UK pounds increased less than 1.0% to £135.1 million from £134.7 million. Selling, general and administrative expenses as a percentage of revenues increased to 24.7% in 2003 from 24.2% in 2002. The small change in these expenses in 2003 as compared to 2002 reflects an increase in marketing and selling costs offset by various cost savings efforts including restructurings announced in the fourth quarter of 2002.

Other charges of $2.9 million and $1.6 million in the three months ended March 31, 2003 and 2002, respectively were restructuring charges for employee severance and related costs. These costs were incurred for approximately 125 employees and approximately 55 employees in the three months ended March 31, 2003 and 2002, respectively.

The following table summarizes the restructuring charges incurred and utilized since December 31, 2002:

	Employee
	Severance			Lease
	and Related			Exit				Agreement
	Costs			Costs			Modifications					Other		Total
	(in millions)
Balance, December 31, 2002	$	19.6		$	78.7			$	1.2	$	1.5		$	101.0
Foreign currency exchange translation adjustments		1.2			5.3				0.1		0.1			6.7
Charged to expense		2.9			—				—		—			2.9
Utilized		(18.6	)		(3.8	)			—		(0.4	)		(22.8	)
Balance, March 31, 2003	$	5.1		$	80.2			$	1.3	$	1.2		$	87.8

Depreciation expense decreased to $259.2 million from $322.5 million primarily due to the $2,498.0 million decrease in the carrying value of fixed assets subject to depreciation effective January 1, 2003 due to the adoption of fresh-start reporting.

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Amortization expense increased to $49.8 million from $14.9 million due to the $1,222.6 million increase in customer lists that are subject to amortization effective January 1, 2003 due to the adoption of fresh-start reporting.

Interest expense decreased to $176.5 million from $324.8 million primarily as a result of the $9,486.9 million cancellation of debt on January 10, 2003 in connection with our emergence from Chapter 11 reorganization. Interest of $220.7 million and $199.7 million was paid in cash in the three months ended March 31, 2003 and 2002, respectively.

Recapitalization expense was $32.1 million in the three months ended March 31, 2002. Recapitalization expense includes all transactions incurred as a result of our Chapter 11 reorganization. Recapitalization expense in the three months ended March 31, 2002 included $8.8 million for employee retention related to substantially all of our UK employees and $23.3 million for financial advisor, legal, accounting and consulting costs.

Foreign currency transaction losses were $3.4 million and $5.0 million in the three months ended March 31, 2003 and 2002, respectively. These losses in 2003 are primarily due to the effect of changes in exchange rates on U.S. dollar denominated debt of our subsidiaries Diamond Holdings Limited and NTL (Triangle) LLC whose functional currency is not the U.S. dollar. Our results of operations will continue to be affected by foreign exchange rate fluctuations.

Income tax (expense) benefit was expense of $16.2 million in the three months ended March 31, 2003 and benefit of $11.3 million in the three months ended March 31, 2002. The 2003 expense is composed of $10.5 million U.S. income tax expense and $5.7 million of deferred foreign income tax expense. None of the 2003 income tax is expected to be payable in the next year.

Net loss was $254.4 million in the three months ended March 31, 2003 and $459.9 million in the three months ended March 31, 2002. This change was the result of the factors discussed above, particularly the reduction in interest expense of $148.3 million in 2003.

Basic and diluted net loss per common share in the three months ended March 31, 2002 is computed as if the 50.5 million shares issued in connection with our emergence from Chapter 11 reorganization on January 10, 2003 were outstanding as of January 1, 2002.

Fixed assets, net, totaled $7,630.3 million and $11,088.9 million, representing 71.5% and 85.0% of total assets, at March 31, 2003 and December 31, 2002, respectively. Fixed assets are stated at cost, which includes amounts capitalized for labor and overhead expended in connection with the design and installation of our operating network equipment and facilities. Costs associated with initial customer installations, additions of network equipment necessary to enable advanced services, acquisition of additional fixed assets and replacement of existing fixed assets are capitalized. The costs of reconnecting the same service to a previously installed premise are charged to expense in the period incurred. Costs for repairs and maintenance are charged to expense as incurred.

Internal costs directly related to the construction and installation of fixed assets, including payroll and related costs of certain employees and rent and other occupancy costs are capitalized. The payroll and related costs of certain employees that are directly related to construction and installation activities are capitalized based on specific time devoted to these activities where identifiable. In cases where the time devoted to these activities is not specifically identifiable, we capitalize costs based upon estimates. We are in the process of upgrading our accounting systems to reduce reliance upon estimates in determining amounts capitalized. Rent and other occupancy costs are capitalized based on rates derived from the costs of the facilities and a factor based on function or use. The internal costs capitalized in the three months ended March 31, 2003 and the year ended December 31, 2002 were approximately £23 million ($36.3 million) and £115 million ($185.1 million), respectively.

The American Institute of Certified Public Accountants issued an Exposure Draft of a Proposed Statement of Position on Accounting for Certain Costs and Activities related to Property, Plant and Equipment dated June 29, 2001. This Exposure Draft is not currently GAAP. However, if this Exposure Draft is adopted, it would require among other things that rent and other occupancy costs are charged to expense as incurred. In the three months ended March 31, 2003 and the year ended December 31, 2002, we capitalized approximately £2 million and £9 million of such costs.

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The following table includes the calculation of internal costs capitalized as a percentage of total operating and selling, general and administrative expenses and as a percentage of cash used to purchase fixed assets.

	Three
	Months			Year
	Ended			Ended
	March 31,			December 31,
	2003			2002
	(in millions)
Internal costs capitalized	$	36.3		$	185.1
Total operating and selling, general and administrative expenses		625.1			2,291.0
Internal costs capitalized as a percentage of total operating and selling, general and administrative expenses		5.8	%		8.1	%
Purchase of fixed assets		185.2			680.9
Internal costs capitalized as a percentage of purchase of fixed assets		19.6	%		27.2	%

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

Certain statements contained herein constitute “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995. When used herein, the words, “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by such forward-looking statements. Such factors include, among others, those set forth under the caption “Risk Factors” in this Form 10-Q as well as: the impact of our organizational restructuring and integration actions; our ability to maintain contracts that are critical to our operations; potential adverse developments with respect to our liquidity or results of operations; our ability to fund and execute our business plan; our ability to attract, retain and compensate key executives and associates; our ability to attract and retain customers; general economic and business conditions; technological developments; our ability to continue to design networks, install facilities, obtain and maintain any required governmental licenses or approvals and finance construction and development, all in a timely manner at reasonable costs and on satisfactory terms and conditions; assumptions about customer acceptance, churn rates, overall market penetration and competition from providers of alternative services; the impact of new business opportunities requiring significant up-front investment; and interest rate and currency exchange rate fluctuations. We assume no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting such statements.

Recent Accounting Pronouncements

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

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange and interest rates. We do not enter into derivative financial instruments for trading or speculative purposes.

To the extent we obtain financing in U.S. dollars and incurs construction and operating 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 a significant portion of our existing indebtedness are payable in U.S. dollars.

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 as of March 31, 2003 about our long-term fixed and floating interest rate debt that are sensitive to changes in interest rates and foreign currency exchange rates.

		Nine
		Months		Year		Year		Year		Year								Fair
		Ending		Ending		Ending		Ending		Ending								Value
		12/31/03		12/31/04		12/31/05		12/31/06		12/31/07			Thereafter			Total		03/31/03
(in millions)
Long-term Debt
Including Current
Portion
U.S. Dollars
Fixed Rate			—	$	—	$	—	$	—	$	517.3		$	668.2		$	1,185.5	$	1,021.6
Average Interest
Rate											11.20	%		17.37	%
U.K. Pound
Fixed Rate			—		—		—		—		—			£135.0			£135.0		£101.3
Average Interest
Rate														10.00	%
Average Forward
Exchange
	Rate													1.4326
U.K. Pound
Variable Rate			—		—		£2,584.8		£408.3		—			—			£2,993.1		£2,993.1
Average Interest
Rate						LIBOR plus 3.5%		LIBOR plus 8.0%
Average Forward
Exchange
	Rate				—		1.5417		1.5344
U.K. Pound
Variable Rate			—		—		—		£20.0		£180.0			—			£200.0		£200.0
Average Interest
Rate								LIBOR plus 5.5%		LIBOR plus 5.5%
Average Forward
Exchange
	Rate								1.5344		1.5291

ITEM 4. CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures. The Company’s management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-14(c) and Rule 15d-14(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company (and its consolidated subsidiaries) required to be included in the Company’s reports filed or submitted under the Exchange Act.

(b)

Changes in Internal Controls. Since the Evaluation Date, there have not been any significant changes in the Company’s internal controls, or in other factors that could significantly affect such internal controls.

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RISK FACTORS

Our business is capital intensive and we have historically incurred losses and generated negative cash flows and cannot assure you that we will be profitable in the future or that we will have sufficient liquidity to fund our working capital and capital expenditures and to meet our obligations under our existing debt instruments.

Our business is very capital intensive and has always required significant amounts of cash. Historically, construction, operating expenditures and interest costs have resulted in negative cash flow, which we expect will continue for the foreseeable future. We have also incurred and expect to continue to incur substantial 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, meet financial covenants, obtain additional required funds and make required payments on any indebtedness we have incurred or may incur.

We had net losses for the year ended December 31, 2002 of $2,375.8 million, and for the years ended December 31:

• 2001: $11,837.0 million (including an asset impairment charge of $8,160.6 million)

• 2000: $2,388.1 million

• 1999: $716.5 million

• 1998: $534.6 million

As of December 31, 2002, our accumulated deficit was $18.6 billion.

Moreover, we currently expect that we will require between £5.0 million and £15.0 million to fund our working capital and capital expenditures, net of cash from operations, in the twelve months from April 1, 2003 to March 31, 2004. We believe that cash, cash equivalents and marketable securities on hand of $478.8 million as of March 31, 2003 will be sufficient for our cash requirements during the twelve months from April 1, 2003 to March 31, 2004.

In addition, beginning in 2005, a series of principal payments will come due on our existing debt instruments as they approach their respective maturity dates. Our ability to make these payments and meet our ongoing funding requirements is dependent upon a number of factors, including our existing cash balances, the cash flow generated by our operating subsidiaries, and our ability to obtain additional financing in the future. Failure to achieve profitability or maintain or achieve various other financial performance levels could in the future diminish our ability to sustain operations, meet financial covenants, obtain additional funds, and make required payments on our indebtedness.

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. In addition, the Exit Notes are structurally subordinated to the obligations of our subsidiaries that are not senior guarantors.

We are a holding company with no independent operations or significant assets other than our investments in and advances to our subsidiaries, including interest and principal obligations with respect to the Exit Notes. We depend upon the receipt of sufficient funds from our subsidiaries to meet our obligations. Because of our substantial leverage and our dependence on our operating subsidiaries to generate distributions, there can be no assurance that we will have adequate funds to fulfill our interest and principal obligations in respect of the Exit Notes. In addition, the terms of existing and future indebtedness of us and our subsidiaries, including our Working Capital Credit Facility and Senior Credit Facility, and the indentures governing the notes of Diamond Holdings and NTL Triangle, and the laws of the jurisdictions under which those subsidiaries are organized limit the payment of dividends, loan repayments and other distributions to us under many circumstances.

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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.

For the years ended December 31, 2002, 2001, 2000, 1999 and 1998, our earnings were insufficient to cover fixed charges by approximately $2,447.8 million, $11,786.6 million, $2,563.1 million, $785.2 million and $535.0 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.

Our substantial leverage could adversely affect our financial health and diminish shareholder value.

We are, and, for the foreseeable future will continue to be, highly leveraged. As of March 31, 2003, the accreted value of our total long-term indebtedness less unamortized discount of $6,228.7 million represents 70.3% of our total capitalization.

Our substantial indebtedness, coupled with the relatively high effective interest rate on the notes, could adversely affect our financial health and, consequently, erode shareholder value, by, among other things:

• increasing our vulnerability to adverse changes in general economic conditions or increases in prevailing interest rates particularly for any borrowings at variable interest rates,

• limiting our ability to obtain additional financing, if needed, 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.

In addition, the significant cash payments required as a result of the relatively high interest rates of our debt, if left outstanding, could negatively impact shareholder value.

We are subject to restrictive debt covenants pursuant to our indebtedness.

As part of our implementation of the Plan, we issued $558.249 million principal amount of the old notes to certain of our creditors under the terms of an indenture. In addition, we amended the terms of our existing Senior Credit Facility and Working Capital Credit Facility.

The indentures governing our outstanding notes, including the Exit Notes, among other things, significantly restrict and, in some cases, prohibit our ability and the ability of most of our subsidiaries to:

• incur additional debt;

• create or incur liens;

• pay dividends or make other equity distributions;

• purchase or redeem share capital;

• create restrictions on the payment of dividends or other amounts by our subsidiaries;

• make investments;

• sell assets;

• issue or sell share capital of certain subsidiaries;

• engage in transactions with affiliates; and

• effect a merger or consolidation of, or sell all or substantially all of our assets.

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Similar restrictive covenants are contained in our Senior Credit Facility and Working Capital Credit Facility which are applicable to us and most of our subsidiaries. In addition, under our credit facilities, we and our subsidiaries must comply with certain financial covenants specifying various financial performance levels that we are required to meet. In the event we were to fail to meet any of these covenants and were unable to cure such breach or otherwise renegotiate such covenant, the lenders under those facilities would have significant rights to seize control of most of our assets. Such a default, or a breach of any of the other obligations in the indenture governing the notes, could also trigger a default under the notes.

The covenants in our credit facilities and the indentures governing our outstanding notes and any future debt may significantly restrict our future operations. Furthermore, upon the occurrence of any event of default under the indentures governing our outstanding notes, our credit facilities or the agreements governing any other debt of our subsidiaries, the lenders could elect to declare all amounts outstanding under such indentures, credit facilities or agreements, together with accrued interest, to be immediately due and payable. If those lenders accelerate the payment of those amounts, we cannot assure you that our assets and the assets of our subsidiaries will be sufficient to repay in full those amounts.

Our Chapter 11 reorganization and uncertainty over our financial condition may harm our business and our brand name.

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

In addition, uncertainty during our recapitalization process may have adversely affected our relationships with our suppliers. If suppliers become increasingly concerned about our financial condition, they may demand faster payments or refuse to extend normal trade credit, both of which could further adversely affect our cash conservation measures and our results of operations. We may not be successful in obtaining alternative suppliers if the need arises and this would adversely affect our results of operations.

The telecommunications industry is subject to rapid technological changes and we cannot predict the effect of any changes on our businesses.

The telecommunications industry is subject to rapid and significant changes in technology and the effect of technological changes on our businesses cannot be predicted. Our core offerings may become outdated due to technological breakthroughs rendering our products out of date. In addition, our business plan contemplates the introduction of services using new technologies. Our investments in those new services, such as those related to the 3G mobile network, may prove premature and we may not realize anticipated returns on these new products. The cost of implementation for emerging and future technologies could be significant, and our ability to fund such implementation may depend on our ability to obtain additional financing. We cannot be certain that we would be successful in obtaining any additional financing required.

We are subject to significant competition in each of our business areas and we expect that competition will intensify — if we are unable to compete successfully, our financial conditions and results of operations could be adversely affected.

We face significant competition from established and new competitors in each of our businesses. In particular, in two of our three key lines of business - telephony and television — the markets are dominated by our competitors (BT and BSkyB, respectively), who have very large market shares and generally have less financial and operating constraints than we do. 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. Moreover, we may also be required to reduce prices if our competitors reduce prices, or as a result of any other downward pressure on prices for telecommunications services, which could have an adverse effect on us.

In addition, BSkyB has access to various movie and sports programming content, with which they create some of the most popular pay TV channels in the UK. We carry several of those channels on our systems. Although there are competing channel providers, the position of programming supplier to us undoubtedly is an advantage to BSkyB, not only because the Sky brand is a feature of our cable TV service, but also because we are dependant upon the supply of these Sky premium channels allowing BSkyB to influence

40

pricing and bundling. Thus far, regulators have not disturbed the pricing arrangements imposed on us by BSkyB. We are currently negotiating with BSkyB a formal, long-term agreement for the supply of certain BSkyB channels, and we believe this will be concluded amicably. However, in the event that we are unable to conclude an agreement successfully, we may be faced with uncertainty over the terms and charges of such supply, now and in the future.

If we are unable to compete successfully, our financial condition and results of operations could be adversely affected.

Our growth has been curtailed by funding constraints.

We significantly decreased the amount we were spending on capital expenditures due to liquidity constraints during the recapitalization process and expect to continue to reduce capital expenditures during 2003. As a result, we may be unable to increase our customers in the short term and our near-term revenue and future revenue growth may be adversely affected.

We remain subject to the risks of successfully integrating the acquisitions through which we have historically grown our business. In particular, we are in the process of integrating our various billing and operation platforms — if we do not complete this integration, we could experience an adverse effect on our customer service, churn rate and operating costs.

We have historically grown our business through acquisitions. This has resulted in our being exposed to the risk of failing to successfully integrate those acquisitions, in particular, workforce, management, network and systems. A significant result of our growth through acquisitions is that we have inherited a variety of distinct billing and customer service systems from various companies that we have acquired. We are in the process of integrating our various billing systems and customer databases in an effort to improve one of the main tools we use to provide customer service; however, we do not as yet have an integrated billing and operational platform. We cannot be certain that this integration project will be successful. If the full integration of our billing and customer service systems is not successful, we could experience an adverse effect on our customer service, churn rate and costs of maintaining these systems going forward. We could also experience operational failures related to billing and collecting revenue from our customers, which, depending on the severity of the failure, could have a material adverse effect on our business.

Moreover, the integration process has involved a number of internal reorganizations of our business as we continue to strive for better performance. These reorganizations have typically involved, among other things, the termination of employees made redundant as a result of the process. Although we cannot predict precisely the effect that this has had, it is likely these internal reorganizations have negatively impacted employee morale. If we undertake additional internal reorganizations they will similarly likely negatively impact morale. Negative effects on employee morale can have a negative effect on our operations generally.

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

We have experienced rapid growth and development in a relatively short period, either through acquisitions or connecting customers to our network. One of our biggest challenges as we have grown has been to limit our customer churn. The successful implementation of our business plan depends upon a reduction in the percentage of our customers that stop using our services.

In order to reduce churn in the future, we aim to improve our customer service. This improvement will be difficult to obtain without an integrated billing system and a customer database across our entire network. If the integration of our various billing system is not successful, we could experience an adverse effect on customer service and, in turn, our churn rate.

We plan to increase our customer and revenue generating unit (referred to in this quarterly report as an RGU) base in 2003. If demand for our products and services is greater than anticipated, our customer service call centers could experience a higher than expected volume of calls. If customer service suffered as a result, it could contribute to churn. Our business plan also includes the migration of our customers from analog to digital service. The migration process could also increase churn levels.

Our ability to reduce churn could also be adversely affected by the availability of competing services in the UK, such as the digital satellite and digital terrestrial television services offered by BSkyB and the BBC, and telephone, Internet and broadband services offered by BT. BT and BSkyB have regularly launched strong direct and indirect win-back campaigns to entice our customers to churn and move to these competing services.

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

Our prospects will depend in part on our ability to control our costs while maintaining and improving our service levels following our restructuring.

As a result of capital constraints imposed on our business during our restructuring, we engaged in a process of reducing expenditures in a variety of areas, including by way of a substantial reduction in capital expenditure, a reduction in the number of our employees and the outsourcing of some functions. Our prospects will depend in part on our ability to continue to control costs and operate more efficiently, while maintaining and improving our existing service levels. In particular, in order to reduce costs we are in the process of negotiating with several of our vendors for better terms under existing and future agreements. We cannot be certain that such negotiations will conclude successfully.

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

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

Our actual results of operations and financial condition may differ from our reported results of operations and financial condition due to the use of estimates and assumptions in the preparation of our financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: the amount of uncollectible accounts and notes receivable, the amount to be paid to terminate certain agreements included in restructuring costs, the amount to be paid for other liabilities, our pension expense and pension funding requirements, estimates related to the amount of costs to be capitalized in connection with the construction and installation of our network and facilities and estimates related to the value of investments, long-lived assets and goodwill.

We are dependant 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. Although we have entered into employment contracts with all of our executive officers, those contracts cannot prevent such individuals from resigning. If an individual does resign, he or she is bound by certain non-compete clauses which may or may not discourage the individual from leaving.

Our principal businesses are subject to government regulation, including pricing regulation, and changes in current regulations may adversely affect us.

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

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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We are dependent upon many critical systems and processes, many of which are dependent upon hardware that is concentrated in a small number of locations. If a catastrophe were to occur at one or more of those locations, it could have a material adverse effect on our business.

Our business is dependent on many sophisticated critical systems, which support all of the various aspects of our operations from our network to our billing and customer service systems. The hardware supporting a large number of critical systems are housed in a relatively small number of locations. If one or more of these locations were to be subject to fire, natural disaster, terrorism, power loss, or other catastrophe, it could have a material adverse effect on and cause irreparable harm to our business. We are currently studying ways to improve our disaster recovery to prevent or mitigate such a potential failure. However, despite any disaster recovery, security and service continuity protection measures we have or may in the future take we cannot assure you that these measures will be sufficient. In addition, although we build our network in resilient rings to ensure the continuity of network availability in the event of any damage to our underground fibers, should any ring be cut twice in different locations, it is likely that no transmission signals will be able to pass, which could cause significant damage to our business. This is especially so in relation to our Sirius undersea ring connecting the UK to the Republic of Ireland: any simultaneous cut of the Northern and Southern rings would isolate our Irish networks from our UK networks for an extended period.

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

We obtain insurance of the type and in the amounts that we believe are customary 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.

We are subject to currency risk because we obtained significant financing and may in the future obtain additional financing in U.S. dollars but generally generate revenues and incur expenses in pounds sterling and Euros.

We encounter currency exchange rate risks because we generate revenues and incur construction and operating expenses in pounds sterling and Euros while we pay interest and principal obligations with respect to a significant amount of our existing indebtedness in U.S. dollars. We cannot assure you that any 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 we have not fully hedged against such declines, the effective cost of servicing our U.S. dollar debt will be higher and we will incur currency losses.

Our broadcast services and carrier telecommunications businesses are dependent upon certain important contracts.

Our broadcast services business has contracts for the provision of television broadcasting transmission services with the ITV national network of 15 affiliated television stations, Channel 4/S4C and Channel 5. The majority of the prices that we may charge these companies for transmission services are subject to regulation by the UK Office of Telecommunications (referred to in this quarterly report as OFTEL). 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.

Other contracts important to our broadcast services business include a contract for the provision of communication services to the Metropolitan Police. This contract is subject to renewal and we cannot assure you that the renewal will be on the same basis, or that the Metropolitan Police will not seek other parties to provide the services.

Our carrier services and mobile business has a contract with Orange plc for the design, build and maintenance of its mobile network. The minimum term of this contract is scheduled to expire in 2006 and there can be no assurance that it will be renewed.

In addition, our carrier services and mobile business currently has a contract with Vodafone for the supply of mobile transmission services, including core inter-switch and backhaul network capacity. This contract is scheduled to terminate in October 2004 and there are no present indications that it will be renewed..

The loss of any one of these contracts could have a material adverse effect on the relevant business division.

Our broadcast services business is dependent upon site sharing arrangements with its principal competitor.

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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, Crown Castle U.K. Ltd. and we have made arrangements 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 for analog broadcast services, 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’ written notice until December 31, 2005 or at any date which is a date 10 years or a multiple of 10 years after December 31, 2005. With respect to digital broadcast services, we and Crown Castle U.K. Ltd. are negotiating a formal arrangement pending finalization of a separate digital site sharing agreement which is envisaged to be on terms similar to the existing analog site sharing agreement. Presently the parties are operating under an informal arrangement pending finalization of the formal arrangement. Although we believe such formalization will be concluded successfully, we cannot be certain of that conclusion.

Some provisions of the agreements governing our indebtedness and the indebtedness of our subsidiaries, our stockholder rights plan and certain provisions of our certificate of incorporation could delay or prevent transactions involving a change of control of NTL Incorporated.

We may, under some circumstances involving a change of control, be obligated to offer to repurchase substantially all of our outstanding notes, and repay other indebtedness (including our bank facilities). We cannot assure you that we will have available financial resources necessary to repurchase those notes or repay that indebtedness in those circumstances.

If we cannot repurchase and repay this indebtedness in the event of a change of control, the failure to do so 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 threat of this could have the effect of delaying or preventing transactions involving a change of control of NTL Incorporated, including transactions in which stockholders might otherwise receive a substantial premium for their shares over then current market prices, and may limit the ability of our stockholders to approve transactions that they may deem to be in their best interest.

Our stockholder rights plan and certain provisions of our certificate of incorporation may have the effect, alone or in combination with each other or with the existence of authorized but unissued common stock and preferred stock, of preventing or making more difficult transactions involving a change of control of NTL Incorporated.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In connection with the now consummated Chapter 11 cases, proofs of claim were filed against us and other debtors in those cases by Morgan Stanley Senior Funding Inc. for $11,400,000. These claims are asserted by Morgan Stanley Senior Funding Inc. to relate to alleged unpaid fees for commitments of capital made to various companies within the former NTL group of companies in 1999. We believe we have legitimate defenses to all of these claims. In addition, on May 7, 2003, we filed in the United States Bankruptcy Court for the Southern District of New York an objection to one of these claims seeking its dismissal on the grounds that it was not properly before the Bankruptcy Court and asserting, in the alternative, that we had valid defenses to such claim.

NTL Europe, our former parent company prior to our emergence from Chapter 11 on January 10, 2003, and certain of its officers, including our President — Chief Executive Officer, have been named as defendants in a number of purported securities class action lawsuits. The complaints in those cases generally allege that the defendants failed to accurately disclose NTL Europe’s financial condition, finances and future prospects in press releases and other communications with investors prior to filing its Chapter 11 case in federal court. We do not know of any facts that would support these allegations, and the defendants have informed us that they intend to defend these lawsuits vigorously. While NTL Europe has been released from liability in these actions as a result of the consummation of the Plan, the case remains pending against the individuals named as defendants. We have not been named as a defendant. The cases have been consolidated for all purposes before the United States District Court for the Southern District of New York.

Two separate proceedings have been initiated in the United States Bankruptcy Court for the Southern District of New York by Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P., respectively, requesting that we be held liable for alleged damages attributable to their respective trading in our “when-issued” common stock prior to the consummation of the Plan. The damages allegedly arise from our actions in seeking Bankruptcy Court approval to reduce the number of shares of our new common stock issued to various former creditors and stockholders of our former parent company and its subsidiaries, including us, from 200 million to 50 million shares. We believe that we acted at all times in accordance with properly authorized process of the Bankruptcy Court, that the “when-issued” market is regulated solely by, and subject to the rules of, the NASD, which acted as it deemed appropriate in this matter, and that in any event these claims against us are barred under the terms of the Plan. We believe that these actions are without merit and intend to defend ourselves vigorously.

We are involved in certain other disputes and litigation arising in the ordinary course of our business. None of these matters are expected to have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On the Effective Date, we filed the Amended and Restated Certificate of Incorporation of NTL Communications Corp. (the “Certificate”) with the Secretary of State of the State of Delaware, authorizing, among other things, the change in our name from “NTL Communications Corp.” to “NTL Incorporated” and adopted the Amended and Restated By-Laws of NTL Incorporated (the “By-Laws”). Pursuant to the Certificate, our authorized capital stock, after the Effective Date, consists of 400,000,000 shares of Common Stock (as defined herein) and 5,000,000 shares of preferred stock, par value $0.01 per share. The Certificate and By-Laws were filed as Exhibits 1 and 2, respectively, to our registration statement on Form 8-A (the “Form 8-A”) filed with the Securities and Exchange Commission on the Effective Date, and are incorporated by reference herein. A description of our capital stock and other related matters is set forth in the Form 8-A, which is also incorporated by reference herein.

On the Effective Date and pursuant to the Plan, the following securities, representing all of our previously outstanding public debt and equity securities, were cancelled: our previously outstanding common stock, par value $0.01 per share; 12.75% Senior Deferred Coupon Notes due 2005; 11.5% Senior Notes due 2008; 11.5% Senior Deferred Coupon Notes due 2006; 12.375% Senior Deferred Coupon Notes due 2008; 9.25% Senior Euro Notes due 2006; 9.75% Senior Sterling Deferred Coupon Notes due 2009; 10% Senior Notes due 2007; 9.875% Senior Euro Notes due 2009; 9.5% Senior Sterling Notes due 2008; 11.5% Euro Deferred Coupon Notes due 2009; 10.75% Senior Deferred Coupon Notes due 2008; 11.875% Senior Notes due 2010; 9.75% Senior Deferred Coupon Notes due 2008; 12.375% Senior Euro Notes due 2008; 6.75% Convertible Notes due 2008 (co-obligation of us and the former NTL Incorporated); and 7% Convertible Subordinated Notes due 2008 (co-obligation of us, the former NTL Incorporated, and NTL Delaware).

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On the Effective Date and pursuant to the Plan, we issued to certain of our and our subsidiaries’ former creditors and stockholders (a) 50,000,000 shares of our common stock, par value $0.01 per share, together with associated preferred stock purchase rights (the “Common Stock”), and (b) warrants to purchase 8,750,000 shares (subject to adjustment) of Common Stock at an exercise price of $309.88 per share (subject to adjustment) (the “Series A Warrants”). These shares of Common Stock and Series A Warrants were issued in reliance on the exemption from registration afforded by Section 1145 of the US Bankruptcy Code. We received no proceeds from the issuance of such shares of Common Stock and Series A warrants.

We issued an additional 496 shares of Common Stock and 496 Series A Warrants subscribed for in the Equity Rights Offering and 473 shares of Common Stock subscribed for in the Noteholder Election Option on the Effective Date. These shares of Common Stock and Series A Warrants were also issued in reliance on the exemption from registration afforded by Section 1145 of the US Bankruptcy Code. After expenses, we received no net proceeds from such offerings.

Also on the Effective Date, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act, the Company and certain of our subsidiaries issued 19% Senior Secured Notes due 2010 (the “Exit Notes”) and 500,000 shares of our Common Stock to the initial purchasers of the Exit Notes. The gross proceeds from the Exit Notes and such shares totaled $500 million. The aggregate net proceeds of $500,000,000 from the sale of the Exit Notes and 500,000 shares of our Common Stock to the initial purchasers of the Exit Notes were used in part to repay approximately $68 million outstanding under our debtor-in possession facility (which was repaid on the Effective Date), to purchase from NTL Delaware a £90 million note of NTL (UK) Group Inc. and to repay certain other obligations. The remaining proceeds will be used 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. A description of the Exit Notes is set forth in our registration statement on Form S-4 filed with the Securities and Exchange Commission on April 17, 2003, which is incorporated by reference herein.

We have reserved (a) 8,750,496 shares (subject to adjustment) of Common Stock for issuance upon exercise of the Series A Warrants and (b) 5,000,000 shares (subject to adjustment) of Common Stock for issuance upon exercise of the management incentive options authorized for grant under our management incentive plan.

On January 24, 2003, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act, an aggregate of 83,245 shares of our Common Stock was issued in escrow to certain of our executives pursuant to their employment agreements. We received no proceeds from the issuance of such shares of our Common Stock.

On March 28, 2003, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act, the following securities were issued to James F. Mooney, our Non-Executive Chairman, pursuant to his employment agreement: (i) 200,000 shares of restricted Common Stock that will vest equally on a quarterly basis over a three-year period; (ii) stock options for the purchase of 100,000 shares of Common Stock that vested immediately upon issuance; and (ii) stock options for the purchase of 300,000 shares of Common Stock that will vest 20% per year on a quarterly basis over five years. No restricted shares or shares under option may be sold prior to the first anniversary date of Mr. Mooney’s employment with us. We received no proceeds from the issuance of such shares of our Common Stock.

The Common Stock and Series A Warrants are quoted on the Nasdaq National Market under the symbols “NTLI” and “NTLIW,” respectively. The Exit Notes are not listed or quoted on any national securities exchange or national market system or registered under the Exchange Act.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

3.1	Amended and Restated By-Laws of NTL Incorporated
99.1	Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K.

During the quarter ended March 31, 2003, the Company filed a Current Report on Form 8-K, dated January 10, 2003, reporting under Item 5, Other Events, that the Second Amended Joint Reorganization Plan of NTL Incorporated and Certain Subsidiaries, dated July 15, 2002 and confirmed on September 5, 2002, became effective.

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No financial statements were filed with this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NTL INCORPORATED
Date: May 14, 2003	By:	/s/ Barclay Knapp
		Barclay Knapp
		President and Chief Executive Officer
Date: May 14, 2003	By:	/s/ Gregg N. Gorelick
		Gregg N. Gorelick
		Vice President-Controller
		(Principal Accounting Officer)

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CERTIFICATIONS

I, Barclay Knapp, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NTL Incorporated;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c)presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003	/s/ Barclay Knapp
	Barclay Knapp
	Chief Executive Officer -
	President and Director

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I, Scott E. Schubert, certify that:

1.I have reviewed this quarterly report on Form 10-Q of NTL Incorporated;

2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003	/s/ Scott E. Schubert
	Scott E. Schubert
	Chief Financial Officer

50 EX-3.1 3 y86486exv3w1.htm EX-3.1: AMENDED AND RESTATED BY-LAWS

Exhibit 3.1

AMENDED AND RESTATED BY-LAWS

OF

NTL INCORPORATED

(hereinafter called the “Corporation”)

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the Corporation shall be located at 9 East Loockerman Street, City of Dover, County of Kent, in the State of Delaware 19901. The name of its registered agent at that address is National Registered Agents, Inc.

Section 2. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware as shall be designated from time to time by the Board of Directors as stated in the notice of meeting or in a duly executed waiver of notice thereof. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines

and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication, (a) participate in a meeting of stockholders and (b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication; provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

Section 2. Annual Meetings. Annual meetings of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect by a plurality vote a Board of Directors (subject to the rights, if any, of the holders of shares of preferred stock of the Corporation to nominate and elect a specified number of directors as provided in the Certificate of Incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”)), and transact such other business as may properly be brought before the meeting in accordance with these

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amended and restated by-laws of the Corporation, as amended and restated from time to time (the “By-laws”).

Section 3. Special Meetings. Except as otherwise required by applicable law or by the Certificate of Incorporation, special meetings of stockholders for any purpose or purposes may be called at any time solely by a majority vote of the Board of Directors, the Chairman of the Board of Directors, the President or a majority vote of a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority include the power to call special meetings. Special meetings of stockholders may not be called by any other person or persons.

Section 4. Advance Notification of Business to be Transacted at Meetings of Stockholders. To be properly brought before the annual or any special stockholders’ meeting, business must be either (a) specified in the notice of meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) solely in the case of the annual meeting, otherwise properly brought before the meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 4 and on the record date for the determination of stockholders entitled to notice of and to vote at an annual meeting and (ii) who complies with the notice procedures set forth in this Section 4.

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          In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

          To be timely, a stockholder’s written notice to the Secretary of the Corporation must be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy-five (75) days nor more than ninety (90) days prior to the first anniversary of the date of the immediately preceding year’s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, to be timely, notice by the stockholder must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting is first given or made (which for this purpose shall include any and all filings of the Corporation made on the EDGAR system of the Securities and Exchange Commission or any similar public database maintained by the Securities and Exchange Commission), whichever first occurs.

          To be in proper written form, a stockholder’s notice to the Secretary of the Corporation must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and record address of such stockholder proposing such business, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings

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between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the meeting to bring such business before the meeting.

          Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at the annual or any special stockholders’ meeting except business brought before the meeting in accordance with the procedures set forth in this Section 4; provided, however, that, once business has been properly brought before the meeting in accordance with such procedures, nothing in this Section 4 shall be deemed to preclude discussion by any stockholder of any such business. The officer of the Corporation presiding at the meeting shall, if the facts warrant, determine and declare to the meeting that the business was not properly brought before the meeting in accordance with the provisions of this Section 4, and if such officer shall so determine, such officer shall so declare to the meeting that any such business not properly brought before the meeting shall not be transacted.

Section 5. Advance Notification of Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation with respect to the rights, if any, of the holders of shares of preferred stock of the Corporation to nominate and elect a specified number of directors in certain circumstances.

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          Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 5 and on the record date for the determination of stockholders entitled to notice of and to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 5.

          In addition to any other applicable requirements, for a nomination made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

          To be timely, a stockholder’s written notice to the Secretary of the Corporation must be delivered to or mailed and received at the principal executive offices of the Corporation, in the case of: (x) an annual meeting, not less than seventy-five (75) days nor more than ninety (90) days prior to the first anniversary of the date of the immediately preceding year’s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, to be timely, notice by the stockholder must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting is first given or made (which for this purpose shall include any and all filings of the Corporation made on the EDGAR system of the Securities and Exchange Commission or

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any similar public database maintained by the Securities and Exchange Commission), whichever first occurs; and (y) a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting is first given or made (which for this purpose shall include any and all filings of the Corporation made on the EDGAR system of the Securities and Exchange Commission or any similar public database maintained by the Securities and Exchange Commission).

          To be in proper written form, a stockholder’s notice to the Secretary of the Corporation must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder proposing such nomination, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to

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which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named or referred to as a nominee and to serve as a director if elected. The Corporation may require any proposed nominee to furnish such other information (which may include meetings to discuss the information) as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

          No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 5. The officer of the Corporation presiding at the meeting shall, if the facts warrant, determine and declare to the meeting that the nomination was defective in accordance with the provisions of this Section 5, and if such officer shall also determine, such officer shall so declare to the meeting that any such defective nomination shall be disregarded.

Section 6. Notice. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting and, in the case of a special meeting, the purpose or purposes for which the

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meeting is called shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting. At a special meeting of stockholders, only such business as is stated in such notice (or any supplement or amendment thereto) shall be acted upon thereat.

Section 7. Quorum. Except as otherwise required by applicable law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 8 of this Article II.

Section 8. Adjournments. Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place, if any, thereof or the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be sent to each stockholder of

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record entitled to notice of and to vote at the meeting in accordance with the requirements of Section 6 of this Article II.

Section 9. Voting. Except as otherwise required by applicable law or by the Certificate of Incorporation, any question brought before any meeting of stockholders, other than the election of directors, shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat, voting as a single class. Except as otherwise provided in the Certificate of Incorporation and subject to Section 5 of Article V of these By-laws, each stockholder represented at a meeting of stockholders shall be entitled to cast one (1) vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy as provided in Section 10 of this Article II. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the stockholders, in such officer’s discretion, may require that any votes cast at such meeting be cast by written ballot.

Section 10. Proxies. Each stockholder entitled to vote at a meeting of the stockholders may authorize another person or persons to act for such stockholder as proxy but no proxy shall be voted on after three (3) years from its date, unless such proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:

          (a) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent

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signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.

          (b) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such telegram, cablegram or other means of electronic transmission; provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information upon which they relied.

          Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reliable reproduction shall be a complete reproduction of the entire original writing or transmission.

Section 11. List of Stockholders Entitled to Vote. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10)

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days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares of the Corporation registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (b) during ordinary business hours, at the principal place of business of the Corporation. This list need not include electronic mail addresses or other electronic contact information. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

Section 12. Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 11 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

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Section 13. Conduct of Meetings. The Board of Directors may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations adopted by the Board of Directors, the Chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such Chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the Chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) the determination of when the polls shall open and close for any given matter to be voted upon at the meeting; (c) rules and procedures for maintaining order at the meeting and the safety of those present; (d) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the Chairman of the meeting shall determine; (e) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (f) limitations on the time allotted to questions or comments by participants.

Section 14. Inspectors of Election. In advance of any meeting of the stockholders, the Board of Directors, or, if authorized by resolution of the Board of Directors, the Chairman or the President, shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the Chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law,

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inspectors may be officers, employees or agents of the Corporation; provided that no director or candidate for the office of director shall act as an inspector of an election of directors. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by applicable law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.

Section 15. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day preceding the day on which notice is given. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

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ARTICLE III

DIRECTORS

Section 1. Election of Directors. Subject to the rights, if any, of the holders of shares of preferred stock of the Corporation as provided in the Certificate of Incorporation, and except as provided in Section 2 of this Article III, directors shall be elected by a plurality of the votes cast at each annual meeting of stockholders and entitled to vote on the election of directors, and each director so elected shall hold office as provided by Article V of the Certificate of Incorporation.

Section 2. Vacancies. Except as otherwise required by applicable law or by the Certificate of Incorporation, any vacancy on the Board of Directors, howsoever resulting, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy shall hold office for a term that shall coincide with the term of the class to which such director shall have been elected except in the case a director elected by a class or series of preferred stock of the Corporation which shall be governed by the provisions of the Certificate of Incorporation.

Section 3. Duties and Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders.

Section 4. Meetings. The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to

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time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors, the President or by a majority vote of the Board of Directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, or personally or by telephone, telegram, telex or similar means of communication on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.

Section 5. Organization. At each meeting of the Board of Directors, the Chairman of the Board of Directors, or, in his or her absence, a director chosen by a majority of the directors present, shall act as Chairman. The Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors. In case the Secretary shall be absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of Secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the Chairman of the meeting may appoint any person to act as Secretary of the meeting.

Section 6. Resignations and Removals of Directors. Any director of the Corporation may resign at any time, by giving notice in writing or by electronic transmission to the Chairman of the Board of Directors, the President or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Subject to the rights, if any, of the holders of shares of preferred stock of the Corporation as provided in the Certificate of

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Incorporation, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of two-thirds (66 2/3%) of the outstanding shares of the Corporation then entitled to vote generally in the election of directors, considered for purposes of this Section 6 as one class.

Section 7. Quorum; Action of the Board of Directors. Except as otherwise required by applicable law or by the Certificate of Incorporation, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, and notice of the time and place of any such adjourned meeting shall be given to all of the directors unless such time and place were announced at the meeting at which the adjournment was taken, in which case such notice shall only be given to the directors who were not present thereat.

Section 8. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

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Section 9. Meetings by Means of Conference Telephone. Members of the Board of Directors of the Corporation, or any committee duly designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 9 shall constitute presence in person at such meeting.

Section 10. Committees. The Board of Directors shall have as permanent committees an Executive Committee, Audit Committee, Compensation Committee and Finance Committee, the operation of which Committees shall be governed by their respective Charters. No members of such Committees may be removed from such Committees except by unanimous vote of the full Board of Directors. The Board of Directors also may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by applicable law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Unless the Board of Directors or such committee shall otherwise provide, regular and special meetings and other actions of any committee shall be governed by the provisions of this Article III

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applicable to meetings and actions of the Board of Directors. Each committee shall keep regular minutes and report to the Board of Directors on a regular basis.

Section 11. Fees and Compensation. The directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board of Directors. Subject to applicable law and the rules and regulations of any securities exchange, inter-dealer quotation system or regulated quotation service on which securities of the Corporation are listed or admitted for trading, no such payment shall preclude any director from serving the Corporation or any subsidiary or affiliate thereof in any other capacity and receiving compensation therefore. Subject to applicable law and the rules and regulations of any securities exchange, inter-dealer quotation system or regulated quotation service on which securities of the Corporation are listed or admitted for trading, members of special or standing committees may be allowed compensation for service as committee members, such compensation to be determined by the Board of Directors or a separate committee thereof.

Section 12. Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because any such director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because any such director’s or officer’s votes are counted for such purpose if: (a) the material facts as to such director’s

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or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (b) the material facts as to such director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

ARTICLE IV

OFFICERS

Section 1. General. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose a Chairman of the Board of Directors (who must be a director) and Assistant Secretaries, Assistant Treasurers and other officers. Such officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective

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duties and powers. Any number of offices may be held by the same person, unless otherwise prohibited by applicable law, the Certificate of Incorporation or these By-laws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

Section 2. Election of Officers; Vacancies; and Resignations and Removals. The Board of Directors shall elect the officers of the Corporation, who shall be subject to the control of the Board of Directors and shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors, and each officer of the Corporation shall hold office until such officer’s successor is chosen and qualified, or until their earlier death, resignation, retirement, disqualification or removal from office. Any officer elected by the Board of Directors may be removed at any time, with or without cause, by the Board of Directors, subject to the terms and conditions of any employment or other agreement of such officer with the Corporation. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors or a committee thereof. Any officer of the Corporation may resign at any time, by giving notice in writing or by electronic transmission to the Chairman of the Board of Directors, the President or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective.

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Section 3. Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation (or take action by written consent) in which the Corporation may own securities and at any such meeting (or when taking such action by written consent) shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present (or in its action by written consent). The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

ARTICLE V

STOCK

Section 1. Form of Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate signed, by, or in the name of the Corporation by the (a) Chairman or Vice Chairman of the Board of Directors, the President or a Vice President of the Corporation and (b) Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by such stockholder in the Corporation. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and

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relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restriction of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, or in the case of uncertificated shares of stock, in the notice sent pursuant to Section 151(f) of the Delaware General Corporation Law (the “DGCL”); provided that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, or in the case of uncertificated shares of stock, in the notice sent pursuant to Section 151(f) of the DGCL, a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2. Signatures. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 3. Lost Certificates. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of a written affidavit delivered to the

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Corporation of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond or provide an indemnity to the Corporation in such sum as the Corporation may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificates or the issuance of such new certificate.

Section 4. Transfers. Stock of the Corporation shall be transferable in the manner prescribed by applicable law, any agreement among the stockholders of the Corporation and the Corporation (if a party), the Certificate of Incorporation and in these By-laws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; provided, however, that such surrender and endorsement or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. Every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom it was transferred and any other material information.

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Section 5. Dividend Record Date. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6. Record Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by applicable law.

Section 7. Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.

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ARTICLE VI

NOTICES

Section 1. Notices. Whenever written notice is required by applicable law, the Certificate of Incorporation or these By-laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex, cable or facsimile transmission.

Section 2. Waivers of Notice. Whenever any notice is required by applicable law, the Certificate of Incorporation or these By-laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by or on behalf of the person or persons entitled to said notice, or a waiver by electronic transmission by or on behalf of the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of stockholders or any regular or special meeting of the directors or members of a committee of directors need be specified in any

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written waiver of notice unless so required by applicable law, the Certificate of Incorporation or these By-Laws.

ARTICLE VII

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 1. Power to Indemnify in Actions, Suits or Proceedings other than those by or in the Right of the Corporation. Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), other than an action by or in the right of the Corporation, by reason of the fact that such person or a person of whom such person is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the DGCL permitted the Corporation to provide immediately prior to such amendment) if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe

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such person’s conduct was unlawful and the termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful, against all expense, liability and loss (including attorneys’ fees, judgments, fines or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person’s heirs, executors, administrators and legal representatives.

Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 3 of this Article VII, the Corporation shall indemnify and hold harmless to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the DGCL permitted the Corporation to provide immediately prior to such amendment) any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person or a person of whom such person is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other

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enterprise, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, against all expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for expenses which the Court of Chancery of the State of Delaware shall deem proper.

Section 3. Procedure. To obtain indemnification under this Article VII (unless ordered by a court), a claimant shall submit to the Corporation a written request (hereinafter a “demand”), including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written demand by a claimant for indemnification pursuant to the first sentence of this Section 3, a determination shall be made as to whether indemnification of the claimant is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be. With respect to a person who is a director or officer at the time of determination, the determination of the claimant’s entitlement to indemnification shall be made as follows (i) by a majority vote

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of the Disinterested Directors (as defined in Section 11 of this Article VII) who are not parties to such proceeding, even though less than a quorum, or (ii) by a committee of Disinterested Directors designated by a majority vote of Disinterested Directors, even though less than a quorum, or (iii) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel (as defined in Section 11 of this Article VII) in a written opinion (a copy of which will be delivered to the claimant), or (iv) by the stockholders. With respect to former directors and officers and any other persons entitled to indemnification pursuant to this Article VII, the determination shall be made by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within twenty (20) days after such determination. The right to indemnification conferred in this Article VII shall be a contract right and shall, subject to applicable law, include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the Corporation within twenty (20) days after the receipt by the Corporation of a statement or statements (setting forth in reasonable detail an itemized account of amounts due) from the claimant (or a statement from a third party for services rendered to the claimant) requesting such advance or advances from time to

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time; provided, however, that if the DGCL requires, the payment of such expenses incurred by a director or officer in such person’s capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article VII or otherwise. Notwithstanding anything to the contrary contained in this Article VII (including Section 13 of this Article VII), no demand on the Corporation will be required for a claimant seeking to enforce his right to indemnification and advancement of expenses under this Article VII.

Section 4. Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Section 1 or Section 2 of this Article VII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any

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applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 4 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

Section 5. Remedies for Non-Payment. If a claim under Section 1 or Section 2 of this Article VII is not paid in full by the Corporation within thirty (30) days after a demand pursuant to Section 3 of this Article VII has been received by the Corporation (or if demand is excused pursuant to Section 3 of this Article VII, thirty (30) days after written notice to the Corporation), the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be, but the burden of proving such defense shall be on the Corporation.

Section 6. Binding Effect. If a determination shall have been made pursuant to Section 1 or Section 2 of this Article VII that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to Section 4 of this Article VII. The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to Section 4 of this Article VII that the procedures and presumptions of this Article VII are not valid, binding and

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enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this Article VII.

Section 7. Remedy Not Exclusive. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article VII shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, the By-Laws, agreement, policy, vote of stockholders or Disinterested Directors or otherwise. No repeal or modification of this Article VII shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation hereunder in respect of any occurrence or matter arising prior to any such repeal or modification. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in this Article VII but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL or otherwise.

Section 8. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL. To the extent that the Corporation maintains any policy or policies providing such insurance, each such director or officer, and each such employee or agent to which rights to indemnification have been granted as provided in Section 9 of this Article VII, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such director, officer, employee or agent.

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Section 9. Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and, subject to applicable law, rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VII with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

Section 10. Savings Clause. If any provision or provisions of this Article VII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VII (including, without limitation, each portion of any paragraph of this Article VII containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VII (including, without limitation, each such portion of any paragraph of this Article VII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

Section 11. Definitions. For purposes of this Article VII:

          (a) references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so

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that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued;

          (b) the term “another enterprise” as used in this Article VII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent;

          (c) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan;

          (d) references to “serving at the request of the Corporation” shall include, among other matters, any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries;

          (e) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VII;

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          (f) “Disinterested Director” shall mean a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant; and

          (g) “Independent Counsel” shall mean a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law of the jurisdiction in which the Corporation was domiciled at the time the subject matter of the proceedings first occurred or was made known to the Disinterested Directors and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this Article VII.

Section 12. Notices. Any notice, request or other communication required or permitted to be given to or made by the Corporation under this Article VII shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation or to the claimant at the address or facsimile number provided to the Corporation and shall be effective only upon receipt by the Secretary or the claimant, as the case may be.

Section 13. Limitation on Indemnification. Notwithstanding anything contained in this Article VII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 3 of this Article VII), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or

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legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation pursuant to Section 3 of this Article VII.

ARTICLE VIII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the Corporation, subject to the requirements of the DGCL and the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors out of funds legally available therefor at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with these By-laws). Dividends may be paid in cash, in property or in shares of the Corporation’s capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

Section 2. Disbursements. All checks, drafts or demands for money and notes of the Corporation shall be signed, endorsed or accepted in the name of the Corporation by such

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officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 4. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5. Execution of Contracts, Deeds, Etc. The Board of Directors may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances.

Section 6. Reliance upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such director or officer reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

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SECTION 7. Time Periods. In applying any provision of these By-laws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

ARTICLE IX

AMENDMENTS

Section 1. Amendments. These By-laws may be repealed, altered, amended or rescinded, in whole or in part, or new By-laws may be adopted by either the affirmative vote of the holders of sixty-six and two-thirds percent (66 2/3%) of the outstanding capital stock of the Corporation entitled to vote thereon or by a majority of the entire Board of Directors.

Section 2. Entire Board of Directors. As used in this Article IX and in these By-laws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.

Adopted as of: January 10, 2003

39 EX-99.1 4 y86486exv99w1.htm EX-99.1: CERTIFICATION OF CEO AND CFO

Exhibit 99.1

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report on Form 10-Q of NTL Incorporated (the “Company”) for the quarter ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Barclay Knapp, as Chief Executive Officer of the Company, and Scott E. Schubert, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Barclay Knapp

Name:      Barclay Knapp

Title:      Chief Executive Officer

Date:      May 14, 2003

/s/ Scott E. Schubert

Name:      Scott E. Schubert

Title:      Chief Financial Officer

Date:      May 14, 2003

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934.

51 -----END PRIVACY-ENHANCED MESSAGE-----

EX-3.1

EX-3.1: AMENDED AND RESTATED BY-LAWS

EX-99.1

EX-99.1: CERTIFICATION OF CEO AND CFO