10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
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.)
909 Third Avenue, Suite 2863 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 ý No o

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

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 ý No o

The number of shares outstanding of the registrant’s common stock as of July 30, 2004 was 87,496,304.

NTL INCORPORATED
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

INDEX

	Page
PART I. FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets - June 30, 2004 and December 31, 2003	4
Condensed Consolidated Statements of Operations - Three and Six Months Ended June 30, 2004 and 2003	6
Condensed Consolidated Statement of Shareholders’ Equity - Six Months Ended June 30, 2004	7
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2004 and 2003	9
Notes to Condensed Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures about Market Risk	44
Item 4. Controls and Procedures	46
PART II. OTHER INFORMATION	47
Item 1. Legal Proceedings	47
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	48
Item 3. Defaults Upon Senior Securities	48
Item 4. Submission of Matters to a Vote of Security Holders	48
Item 5. Other Information	49
Item 6. Exhibits and Reports on Form 8-K	49
SIGNATURES	50

1

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

Various statements contained in this document constitute “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995. Words like “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” and similar expressions identify these forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from those contemplated, whether expressed or implied, by these forward-looking statements. These factors include those set forth under the caption “Risk Factors” in our Form 10-K that was filed with the SEC on March 11, 2004, as well as:

•potential adverse developments with respect to our liquidity or results of operations;

•our significant debt payments and other contractual commitments;

•our ability to fund and execute our business plan;

•our ability to generate cash sufficient to service our debt;

•the impact of new business opportunities requiring significant up-front investments;

•our ability to attract and retain customers, increase our overall market penetration and react to competition from providers of alternative services;

•our ability to integrate our billing systems;

•our significant management changes since our emergence from Chapter 11 reorganization;

•our ability to develop and maintain back-up for our critical systems;

•our ability to respond adequately to technological developments;

•our ability to maintain contracts that are critical to our operations;

•our ability to continue to design networks, install facilities, obtain and maintain any required governmental licenses or approvals and finance construction and development, in a timely manner at reasonable costs and on satisfactory terms and conditions;

•interest rate and currency exchange rate fluctuations; and

•the impact of our recent reorganization and subsequent organizational restructuring.

We assume no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.

2

Exchange Rates

The following tables set forth, for the periods indicated, the period end, period average, high and low noon buying rate in the City of New York for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York expressed as U.S. dollars per £1.00 and U.S. dollars per € 1.00. The noon buying rate of the pound sterling on June 30, 2004 was $1.8126 per £1.00 and the noon buying rate of the euro on June 30, 2004 was $1.2179 per €1.00.

	U.S. Dollars per £1.00
Six Months Ended June 30,	Period End	Average(1)	High	Low
2003	1.65	1.62	1.68	1.55
2004	1.81	1.82	1.90	1.75
	U.S. Dollars per €1.00
Six Months Ended June  30,	Period End	Average(1)	High	Low
2003	1.15	1.11	1.19	1.04
2004	1.22	1.23	1.29	1.18

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

The above rates may differ from the actual rates used in the preparation of the condensed consolidated financial statements and other financial information appearing in this quarterly report.  Our inclusion of these exchange rates is not meant to suggest that the pound sterling amounts actually represent these U.S. dollar amounts or that these amounts could have been converted into U.S. dollars at any particular rate, if at all.

Unless we otherwise indicate, all amounts in U.S. dollars as of June 30, 2004 are based on an exchange rate of $1.8126 to £1.00, all amounts disclosed for the six months ended June 30, 2004 are based on an average exchange rate of $1.8227 to £1.00, and all amounts disclosed for the six months ended June 30, 2003 are based on an average exchange rate of $1.6108 to £1.00. All amounts in U.S. dollars as of December 31, 2003 are based on an exchange rate of $1.7842 to £1.00. All rates are based on the noon buying rate in the City of New York for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York. U.S. dollar amounts for the three months ended June 30, 2003 and 2004 are determined by subtracting the U.S. dollar converted financial result for the three months ended March 31, 2003 and 2004 from the U.S. dollar converted financial result for the six months ended June 30, 2003 and 2004, respectively. The variation between the 2003 and 2004 exchange rates has impacted the dollar comparisons.

3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NTL INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)

	June 30, 2004		December 31, 2003
	(Unaudited)		(See Note)
Assets
Current assets
Cash and cash equivalents	$	183.9	$	795.9
Accounts receivable - trade, less allowance for doubtful accounts of $41.4 (2004) and $28.8  (2003)	451.7		405.3
Prepaid expenses	119.6		85.2
Other current assets	39.4		55.8
Total current assets	794.6		1,342.2
Fixed assets, net	7,659.4		7,880.5
Reorganization value in excess of amounts allocable to identifiable assets	545.6		539.1
Customer lists, net of accumulated amortization of $338.2 (2004) and $221.9 (2003)	1,084.8		1,178.9
Investments in and loans to affiliates, net	2.0		2.3
Other assets, net of accumulated amortization of $4.1 (2004) and $70.1  (2003)	236.3		229.8
Total assets	$	10,322.7	$	11,172.8

Note: The balance sheet at December 31, 2003 has been derived from the audited financial statements at that date.

See accompanying notes.

4

NTL INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(In millions, except per share data)

	June 30, 2004			December 31, 2003
	(Unaudited)			(See Note)
Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	284.7		$	260.0
Accrued expenses	584.9			633.1
Accrued construction costs	34.3			33.6
Interest payable	65.4			194.6
Deferred revenue	287.3			269.9
Other current liabilities	30.3			27.1
Current portion of long-term debt	71.1			2.3
Total current liabilities	1,358.0			1,420.6
Long-term debt, net of current portion	5,431.2			5,728.4
Deferred revenue and other long-term liabilities	333.4			325.7
Deferred income taxes	0.2			0.1
Commitments and contingent liabilities
Shareholders’ equity
Preferred stock - $.01 par value; authorized 5.0 (2004 and 2003) shares; issued and outstanding none	—			—
Common stock - $.01 par value; authorized 400.0 (2004 and 2003) shares; issued and outstanding 87.5  (2004) and 86.9 (2003) shares	0.9			0.9
Additional paid-in capital	4,358.5			4,325.0
Unearned stock-based compensation	(31.7		)	(15.0		)
Accumulated other comprehensive income	395.2			341.3
Accumulated (deficit)	(1,523.0		)	(954.2		)
Total shareholders’ equity	3,199.9			3,698.0
Total liabilities and shareholders’ equity	$	10,322.7		$	11,172.8

Note: The balance sheet at December 31, 2003 has been derived from the audited financial statements at that date.

See accompanying notes.

5

NTL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in millions, except per share data)

	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Revenue	$	1,055.5		$	892.5		$	2,131.6		$	1,768.4
Costs and expenses
Operating costs (exclusive of depreciation shown separately below)	(452.9		)	(389.2		)	(924.2		)	(797.8		)
Selling, general and administrative expenses	(236.9		)	(223.9		)	(483.2		)	(440.8		)
Other charges	(26.9		)	(20.9		)	(27.8		)	(23.8		)
Depreciation	(295.3		)	(290.7		)	(591.8		)	(575.1		)
Amortization	(56.2		)	(50.4		)	(113.3		)	(100.2		)
Total costs and expenses	(1,068.2		)	(975.1		)	(2,140.3		)	(1,937.7		)
Operating (loss)	(12.7		)	(82.6		)	(8.7		)	(169.3		)
Other income (expense)
Interest income and other, net	6.5			3.2			9.5			5.9
Interest expense	(127.3		)	(186.9		)	(265.2		)	(363.4		)
Loss on extinguishment of debt	(290.1		)	—			(290.1		)	—
Share of income (loss) from equity investments	1.0			(1.6		)	2.2			(1.5		)
Foreign currency transaction (losses) gains	(25.3		)	21.0			(12.4		)	17.6
(Loss) before income taxes	(447.9		)	(246.9		)	(564.7		)	(510.7		)
Income tax (expense)	(0.6		)	(12.6		)	(4.1		)	(28.8		)
Net (loss)	$	(448.5	)	$	(259.5	)	$	(568.8	)	$	(539.5	)
Basic and diluted net (loss) per common share	$	(5.16	)	$	(4.36	)	$	(6.55	)	$	(9.07	)
Average number of shares outstanding	87.0			59.5			86.9			59.5

See accompanying notes.

6

NTL INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(unaudited)(in millions, except per share data)

	Preferred Stock			Common Stock			Additional			Unearned
	$.01 Par Value			$.01 Par Value			Paid-In			Stock-Based
	Shares	Par		Shares	Par		Capital			Compensation
Balance, December 31, 2003	—	—		86.9	$	0.9	$	4,325.0		$	(15.0	)
Exercise of stock options	—	—		0.5	—		5.0			—
Stock option grants at fair value	—	—		—	—		22.2			(22.2		)
Repurchase of restricted stock	—	—		—	—		(1.8		)	—
Issuance of restricted stock	—	—		0.1	—		4.2			(4.2		)
Issuance of shares	—	—		—	—		3.9			(3.9		)
Restricted stock amortized to operations	—	—		—	—		—			1.4
Issuance of stock amortized to operations	—	—		—	—		—			3.6
Stock options amortized to operations	—	—		—	—		—			8.6
Comprehensive loss:
Net loss for the six months ended June 30, 2004	—	—		—	—		—			—
Currency translation adjustment	—	—		—	—		—			—
Net unrealized gains on derivatives	—	—		—	—		—			—
Pension liability adjustment	—	—		—	—		—			—
Total
Balance, June 30, 2004	—	$	—	87.5	$	0.9	$	4,358.5		$	(31.7	)

See accompanying notes.

7

NTL INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Continued)

(unaudited) (in millions, except per share data)

				Accumulated Other Comprehensive Income (Loss)
	Comprehensive Income (Loss)			Foreign Currency Translation		Pension Liability Adjustments			Net Unrealized Gains on Derivatives		Accumulated (Deficit)			Total
Balance, December 31, 2003				$	342.0	$	(0.7	)	$	—	$	(954.2	)	$		3,698.0
Exercise of stock options				—		—			—		—			5.0
Stock option grants at fair value				—		—			—		—			—
Repurchase of restricted stock				—		—			—		—			(1.8			)
Issuance of restricted stock				—		—			—		—			—
Issuance of shares				—		—			—		—			—
Restricted stock amortized to operations				—		—			—		—			1.4
Issuance of stock amortized to operations				—		—			—		—			3.6
Stock options amortized to operations				—		—			—		—			8.6
Comprehensive loss:
Net loss for the six months ended June 30, 2004	$	(568.8	)	—		—			—		(568.8		)	(568.8			)
Currency translation adjustment	51.9			51.9		—			—		—			51.9
Net unrealized gains on derivatives	2.0			—		—			2.0		—			2.0
Pension liability adjustment	—			—		—			—		—			—
Total	$	(514.9	)
Balance, June 30, 2004				$	393.9	$	(0.7	)	$	2.0	$	(1,523.0	)	$	3,199.9

See accompanying notes.

8

 NTL INCOPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)(in millions)

	Six months ended June 30,
	2004			2003
Net cash provided by operating activities	$	280.8		$	236.4
Investing activities
Purchase of fixed assets	(234.2		)	(299.7		)
Investments in and loans to affiliates	2.5			2.3
Decrease in other assets	—			2.1
Purchase of marketable securities	—			(17.1		)
Proceeds from sale of assets	4.2			—
Proceeds from sale of marketable securities	—			22.3
Net cash (used in) investing activities	(227.5		)	(290.1		)
Financing activities
Proceeds from employee stock option exercises	5.0			—
Proceeds from new borrowings, net	5,275.7			—
Principal payments on long-term debt	(5,942.2		)	(4.8		)
Net cash (used in) financing activities	(661.5		)	(4.8		)
Effect of exchange rate changes on cash and cash equivalents	(3.8		)	11.8
(Decrease) in cash and cash equivalents	(612.0		)	(46.7		)
Cash and cash equivalents, beginning of period	795.9			640.7
Cash and cash equivalents, end of period	$	183.9		$	594.0
Supplemental disclosure of cash flow information
Cash paid during the period for interest, exclusive of amounts capitalized	$	354.2		$	245.2
Income taxes paid	—			—

See accompanying notes.

9

NTL INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1 – Basis of Presentation

Chapter 11 Reorganization

On May 8, 2002, we, NTL Europe, Inc. (then known as NTL Incorporated) and certain of our 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, (the “Effective Date”) 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, Inc. each emerged as independent public companies. We changed our name from NTL Communications Corp. to “NTL Incorporated” and we 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 NTL Europe, Inc. and certain of its subsidiaries, including us, were cancelled, and we issued shares of our 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 NTL Europe, Inc. and its subsidiaries, including us. The precise mix of new securities received by holders of each particular type of security of NTL Europe, Inc. and its subsidiaries was set forth in the Plan. The outstanding notes of Diamond Holdings Limited, or Diamond, and NTL (Triangle) LLC, or NTL Triangle, were not cancelled under the Plan.

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 and six months ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2003, or our 2003 Annual Report.

As of January 1, 2004, we adopted Interpretation No. 46 (Revised December 2003), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51”. This interpretation replaces FIN 46, Consolidation of Variable Interest Entities” that was issued in January 2003. FIN 46R modifies and clarifies various provisions of FIN 46. FIN 46R addresses the consolidation of business enterprises of variable interest entities (VIEs), as defined by FIN 46R. FIN 46R exempts certain entities from its requirements and provides for special effective dates for entities that have fully or partially applied FIN 46 prior to issuance of FIN 46R. The adoption of FIN 46R did not have a material effect on our consolidated financial statements.

Certain prior period balances have been reclassified to conform to the current period presentation, principally consisting of long-term prepayments and deferred revenues related to circuit commitments.

10

Net loss and net loss per share for the three and six months ended June 30, 2003 have been revised to show the effect of the adoption of SFAS No. 123 “Accounting for Stock-Based Compensation” as of  January 1, 2003 and the completion of our rights offering in November 2003.  As a result of the adoption of SFAS No. 123 on January 1, 2003, we recorded compensation expense of $1.9 million and $2.3 million for the three and six months ended June 30, 2003 respectively. Owing to the effect of the rights offering, the average number of shares outstanding for the three and six months ended June 30, 2003 increased by 9.0 million shares.

	Three months ended			Six months ended
	June 30, 2003			June 30, 2003
	(in millions, except per share data)
Net loss, as previously reported	$	(257.6	)	$	(537.2	)
Effect of adoption of SFAS No. 123	(1.9		)	(2.3		)
Net loss, revised	$	(259.5	)	$	(539.5	)
Net loss per share, as previously reported	$	(5.10	)	$	(10.64	)
Effect of rights offering	0.77			1.61
Effect of adoption of SFAS No. 123	(0.03		)	(0.04		)
Net loss per share, revised	$	(4.36	)	$	(9.07	)

Basic and diluted net loss per share is computed by dividing the net loss by the average number of shares outstanding during the three and six months ended June 30, 2004 and 2003, as adjusted for the effect of the rights offering in November 2003. Options to purchase 3.1 million shares and 0.2 million shares of restricted stock at June 30, 2004 are excluded from the calculation of diluted net loss per share, since the inclusion of such options and shares is anti-dilutive. The average number of shares outstanding is computed as follows (in millions):

	Three Months ended June 30,		Six Months ended June 30,
	2004	2003	2004	2003
Number of shares outstanding at start of period (1)	86.9	50.5	86.8	50.5
Issues of common stock	0.1	—	0.1	—
Adjustment for the effect of the rights offering	—	9.0	—	9.0
Average shares outstanding	87.0	59.5	86.9	59.5

(1)Excludes 0.1 million shares of restricted stock

11

Note 2 – Stock Based Compensation

Our stock-based employee compensation plans are described more fully in Note 11 of our 2003 Annual Report. Effective as of January 1, 2003, we adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” prospectively for all stock options granted after December 31, 2002. The fair value of each option is estimated on the date of grant using a Black-Scholes option-pricing model. For the three and six months ended June 30, we expensed $8.8 million and $12.6 million, respectively, in 2004 and $3.9 million and $4.3 million, respectively, in 2003, related to stock-based compensation.

The following weighted-average assumptions have been used in the Black-Scholes option pricing model for 2004 and 2003:

	For the six months ended June 30,
	2004		2003
Risk-free Interest Rate	3.95	%	3.90	%
Expected Dividend Yield	0	%	0	%
Expected Volatility	0.85		0.638
Expected Lives	3.4		3.5

A summary of the activity and related information for stock options for the six months ended June 30, 2004 and 2003 is as follows:

	2004				2003
			Weighted				Weighted
			Average				Average
			Exercise				Exercise
	Options		Price		Options		Price
	(unaudited)
	(in millions)				(in millions)
Outstanding-beginning of period	3.2		$	13.85	—		$	—
Granted	0.5		41.63		3.8		13.34
Exercised	(0.5	)	12.73		—		—
Expired	—		—		—		—
Forfeited	(0.1	)	13.01		(0.1	)	15.00
Outstanding-end of period	3.1		$	18.75	3.7		$	13.30
Exercisable at end of the period	0.5		$	14.23	—		$	—
Weighted-average grant date fair value of options granted during the period			$	55.61			$	5.76

Exercise prices for options outstanding as of June 30, 2004 ranged from $0.01 to $71.60. The weighted-average remaining contractual life of those options is 9.3 years.

12

Note 3 – Employee Benefit Plans

Effective December 31, 2003, we adopted SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits.” This standard requires the disclosure of the components of net periodic benefit cost recognized during interim periods.

Components of Net Periodic Benefit Costs

	Three Months ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2004			2003			2004			2003
	(unaudited) (in millions)
Service costs	$	3.1		$	3.0		$	6.2		$	5.8
Interest costs	6.3			5.3			12.7			10.3
Expected return on plan assets	(6.3		)	(5.2		)	(12.8		)	(10.0		)
Amortization of transition obligation	—			—			—			—
Amortization of prior service costs	—			—			—			—
Recognized actuarial loss	—			—			—			—
Net periodic benefit costs	$	3.1		$	3.1		$	6.1		$	6.1

Employer Contributions

We previously disclosed in our financial statements for the year ended December 31, 2003, that we expected to contribute $26.6 million to our pension plans in 2004. For the three and six months ended June 30, 2004, we contributed $6.7 million and $13.6 million to our pension plans. We presently anticipate contributing an additional $13.6 million to fund our pension plans in 2004 for a total of $27.2 million.

13

Note 4 - Fixed Assets

Fixed assets consist of (in millions):

	Estimated	June 30,				December 31,
	Useful Life	2004				2003
	(unaudited)
Operating equipment
Towers and transmission facilities	8 - 30 years		$	374.1		$	355.3
Cable distribution plant	8 - 30 years	6,345.8				6,232.7
Switches and headends	8 - 10 years	577.6				557.4
Customer premises equipment	5 - 10 years	1,276.1				1,133.5
Other operating equipment	8 - 20 years	147.8				145.2
Total operating equipment		8,721.4				8,424.1
Other equipment
Land	—	31.3				30.8
Buildings	30 years	275.3				271.4
Leasehold improvements	20 years or, if less, the lease term	174.1				171.6
Computer infrastructure	3 - 5 years	201.7				171.3
Other equipment	5 - 12 years	73.9				72.9
Total other equipment		756.3				718.0
		9,477.7				9,142.1
Accumulated depreciation		(1,953.8			)	(1,345.3		)
		7,523.9				7,796.8
Construction in progress		135.5				83.7
			$	7,659.4		$	7,880.5

Note 5 - Intangible Assets

Customer Lists

Estimated aggregate amortization expense relating to customer lists for each of the five succeeding fiscal years from December 31, 2003 is as follows: $225.5 million in 2004, $225.5 million in 2005, $223.8 million in 2006, $222.6 million in 2007 and $90.1 million in 2008.

14

Reorganization Value in Excess of Amounts Allocable to Identifiable Assets

The change in the carrying amount of reorganization value in excess of amounts allocable to identifiable assets during the six months ended June 30, 2004 is as follows (in millions) (unaudited):

Reorganization value in excess of amounts allocable to identifiable assets - December 31, 2003	$	539.1
Foreign currency exchange translation adjustments	9.3
Adjustment to deferred tax accounts	(2.8		)
Reorganization value in excess of amounts allocable to identifiable assets - June 30, 2004	$	545.6

The increase in reorganization value in excess of amounts allocable to identifiable assets during the six months ended June 30, 2004 includes a tax benefit of approximately $2.8 million that is attributable to the use of tax attributes that existed as of the Effective Date.  The deferred tax asset attributable to these tax attributes had previously been offset by a valuation allowance.

Note 6 - Long-Term Debt

Long-term debt consists of (in millions):

	June 30,			December 31,
	2004			2003
	(unaudited)
NTL Cable PLC:
8.75% Senior Notes due 2014	$	425.0		$	—
9.75% Sterling Senior Notes due 2014	679.7			—
8.75% Euro Senior Notes due 2014	274.0			—
Floating Rate Senior Notes due 2012	100.0			—
NTL Investment Holdings Limited and subsidiaries:
Senior Credit Facility	3,949.2			4,968.6
Other	68.9			68.5
NTL (Triangle) LLC:
11.2% Senior Discount Debentures, less unamortized discount of $115.4 (2003)	—			401.9
Other	2.4			2.9
Diamond Holdings Limited:
10% Senior Sterling Notes, less unamortized discount of $38.7 (2003)	—			202.2
9 1/8% Senior Notes, less unamortized discount of $26.5 (2003)	—			83.4
Other	3.1			3.2
	5,502.3			5,730.7
Less: current portion	(71.1		)	(2.3		)
	$	5,431.2		$	5,728.4

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

	June 30,		December 31,
	2004		2003
Floating Rate Senior Notes due 2012	6.14	%	—
Senior Credit Facility
Revolving Facility	—		6.55	%
Term Facility	6.76	%	9.05	%

We completed our refinancing transaction from which we raised approximately $5.9 billion of new indebtedness. The refinancing transaction extended the maturities on substantially all of our debt and lowered our weighted average interest expense. In particular:

•On April 13, 2004, our wholly owned, newly formed subsidiary, NTL Cable PLC, issued £375 million aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million aggregate principal amount of 8.75% senior notes due 2014 and $100 million aggregate principal amount of floating rate senior notes due 2012, together referred to as the Senior Notes. The Senior Notes were offered and sold under Rule 144A and Regulation S.

•Also, on April 13, 2004, we entered into a new fully underwritten £2,425 million senior secured credit facility, which we refer to as our new credit facility, and which includes a £250 million revolving tranche.  On April 14, 2004 we drew down £2,175 million of our new credit facility, which, together with some of the proceeds from the issuance of the new notes and cash on hand, we used to repay our then-existing senior credit facility. At June 30, 2004, the revolving facility is undrawn. The senior credit facility is secured over most of our assets.

•The remaining proceeds from the notes offering, together with cash on hand, were used on May 13, 2004 to redeem the 10% Senior Sterling Notes due 2008 and 9 ¹/₈% Senior Notes due 2008 of Diamond, a wholly owned subsidiary of Diamond Cable Communications Limited, which we refer to as the Diamond notes, redeem the 11.2% Senior Discount Debentures due 2007 of NTL Triangle, which we refer to as the Triangle debentures, and to pay transaction costs.

The refinancing transaction resulted in a loss on extinguishment of debt as follows (in millions) (unaudited):

Redemption price				$	5,508.9
Net carrying amount:
Face value	$	5,497.5
Unamortized discount	(163.3		)
Unamortized issue costs	(115.4		)
				5,218.8
Loss on extinguishment of debt				$	290.1

Note 7 – Derivative Instruments and Hedging Activities

Following our refinancing, we continue to be exposed to various market risks, including changes in foreign currency exchange rates and interest rates. As some of our indebtedness accrues interest at variable rates, we have exposure to volatility in future cash flows and earnings associated with variable interest rate payments. Also, a substantial portion of our revenues and operating costs are earned and paid in pound sterling and, to a lesser extent, euros, but we pay interest and principal obligations on some of our indebtedness in U.S. dollars.  As a result, we have exposure to volatility in future cash flows and earnings associated with changes in foreign currency exchange rates on payments of principal and interest on a portion of our indebtedness.

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Our objective in managing our exposure to fluctuations in interest rates and foreign currency exchange rates is to decrease the volatility of our earnings and cash flows caused by changes in underlying rates. To achieve this objective, we enter into derivative financial instruments. We have established policies and procedures to govern the strategic management of these exposures through a variety of derivative financial instruments, including interest rate swaps, cross-currency interest rate swaps and foreign currency forward rate contracts. By policy, we do not enter into derivative financial instruments with a level of complexity or with a risk that is greater than the exposure to be managed nor do we enter into derivatives for trading or speculative purposes.

In accordance with Statement of Financial Accounting Standards No. 133 (“SFAS 133”), “Accounting for Derivative Instruments and Hedging Activities”, we recognize derivative financial instruments as either assets or liabilities measured at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. To the extent that the derivative instrument is designated and considered to be effective as a cash flow hedge of an exposure to future changes in interest rates or foreign currency exchange rates, the change in fair value of the instrument is deferred in other comprehensive income.  Amounts recorded in other comprehensive income are reclassified to the income statement to match the corresponding cash flows on the underlying hedged transaction.  Changes in fair value of any instrument not designated as a hedge or considered to be ineffective as a hedge are reported in earnings immediately.

As of June 30, 2004, we recorded in Other Assets an amount of $6.1 million representing the fair value of our interest rate swaps and we recorded in Deferred Revenue and Other Long-Term Liabilities an amount of $11.0 million, comprising $6.9 million and $4.1 million representing the fair value of our foreign currency forward contracts and cross-currency interest rate swaps, respectively.

Interest Rate Swaps - Hedging of Interest Rate Sensitive Obligations

As of June 30, 2004, we had entered into interest rate swap agreements to manage the exposure to variability in future cash flows on the interest payments associated with £1,200 million of our outstanding senior credit facility, which accrues at variable rates based on six-month LIBOR. The interest rate swaps allow us to receive interest based on six-month LIBOR in exchange for payments of interest at fixed rates of 5.30%. The interest rate swaps become effective on October 14, 2004 and mature on April 14, 2007.

We have designated these interest rate swaps as cash flow hedges under SFAS No. 133 because they hedge against changes in the amount of future cash flows attributable to changes in six-month LIBOR. As of June 30, 2004, we recorded $6.1 million of unrealized gain in accumulated other comprehensive income (loss) as a result of the increase in fair market value of these interest rate hedges. There was no realized gain or loss arising from any ineffectiveness of the hedges.

Cross Currency Interest Rate Swaps - Hedging the Interest Payments of our U.S. dollar 8.75% Senior Notes due 2014

As of June 30, 2004, we had entered into cross-currency interest rate swaps with a principal amount of $425 million to hedge the pound sterling value of the interest payments on the 8.75% Senior Notes due 2014, which are denominated in U.S. dollars. Under the cross-currency swaps, we receive interest in U.S. dollars at a fixed rate of 8.75% in exchange for payment of interest in pound sterling at a fixed rate of 9.42% based on the pound sterling equivalent of $425 million. The net settlement of $0.5 million under the hedge is included within interest expense for the three and six months ended June 30, 2004.

We have designated the cross-currency swaps as cash flow hedges of the changes in the pound sterling value of the interest payments on our US dollar denominated Senior Notes that result from changes in the U.S. dollar pound sterling exchange rate. As of June 30, 2004, we recorded $4.1 million of unrealized loss in accumulated other comprehensive income (loss) as a result of the decrease in fair market value of these cross currency interest rate hedges. There was no realized gain or loss arising from any ineffectiveness of the hedges.

Foreign Currency Forward Rate Contracts - Hedging the Principal Obligations of our U.S. dollar 8.75% Senior Notes due 2014

As of June 30, 2004, we have entered into foreign currency forward rate contracts to purchase $318.75 million maturing on April 14, 2009.  The contracts hedge changes in the pound sterling value of the principal obligation of the 8.75% Senior Notes due 2014 caused by changes in the U.S. dollar pound sterling exchange rate.

These forward rate contracts have not been designated as hedges and therefore do not qualify for hedge accounting treatment under SFAS 133, Accounting for Derivative Instruments and Hedging Activities. As such, the contracts are carried at fair value on our balance sheet with changes in the fair value recognized immediately in the income statement. The forward rate contracts do not subject

17

us to material volatility in our earnings and cash flows because changes in the fair value directionally and partially mitigate the gains or losses on the translation of our US dollar denominated debt into our functional currency pound sterling in accordance with SFAS 52, Foreign Currency Translation. Changes in fair value of these contracts are reported with foreign exchanges gains (losses).

Net changes in the fair value of the forward rate contracts recognized in net (loss) for the three and six months ended June 30, 2004 were as follows (in millions) (unaudited):

	Three months ended June 30,				Six months ended June 30,
	2004		2003		2004		2003
Net change in fair value of forward rate contracts	$	6.9	$	—	$	6.9	$	—

Note 8 - Other Charges Including Restructuring Charges

Other charges of $26.9 million and $27.8 million for the three and six months ended June 30, 2004, respectively, represent the costs incurred in connection with our call center consolidation program. The costs include $22.6 million for involuntary employee termination and related costs for approximately 2,300 employees, of whom approximately 400 were terminated by June 30, 2004 and $5.2 million for other costs. On April 7, 2004, we announced the consolidation over the next 18 months of our 13 customer service call centers, which support our ntl: home division, into three call centers in the UK equipped for growth. Following an internal review, three specialist call centers will be retained and developed and will be supported by four sales and customer support sites, located throughout the UK. As part of the consolidation, we intend to make additional investments in technology and training in order to streamline processes and generate efficiencies. As a result of these investments, we expect that in the medium term we will be able to deliver a higher level of customer service with up to 1,500 fewer employees. As of June 30, 2004, we have incurred £15.3 million, or $27.8 million, and we expect to incur approximately £25 million, or $45 million, of costs to execute this program.

Other charges of $20.9 million and $23.8 million for the three and six months ended June 30, 2003, respectively, were restructuring charges primarily for involuntary employee termination and related costs. These costs were incurred for approximately 635 employees, all of whom were terminated by June 30, 2004. The restructuring charges in 2003 related to our actions to reorganize, re-size and reduce operating costs and create greater efficiency in various areas.

The following table summarizes the restructuring charges incurred and utilized in the six months ended June 30, 2004 (in millions) (unaudited):

	Involuntary Employee Termination and Related Costs			Lease Exit Costs			Agreement Modifications			Other			Total
Balance, December 31, 2003	$	—		$	72.1		$	0.5		$	0.5		$	73.1
Foreign currency exchange translation adjustments	—			0.7			—			—			0.7
Released	—			—			—			—			—
Charged to expense	22.6			—			—			5.2			27.8
Utilized	(3.8		)	(9.4		)	(0.1		)	(5.2		)	(18.5		)
Balance, June 30, 2004	$	18.8		$	63.4		$	0.4		$	0.5		$	83.1

Note 9 - Related Party Transactions

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

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Stockholder Participation

Some of our significant stockholders were holders of the Diamond notes and the NTL Triangle debentures which were redeemed on May 13, 2004 in connection with the refinancing transaction. Some of these stockholders or other of our significant stockholders, including W.R. Huff Asset Management, which is a significant participant in the market for non-investment grade debt securities, acquired a substantial quantity of the notes issued in the refinancing transaction.

Advisory Fees

In connection with our rights offering in November 2003, we entered into separate participating purchase agreements with each of W.R. Huff Asset Management and Franklin Mutual Advisers. Pursuant to the agreements, and for their participation in the rights offering, some affiliates and managed accounts for which W.R. Huff Asset Management acts as an investment adviser were paid a fee of $5.3 million on March 24, 2004 and some funds for which Franklin Mutual Advisers acts as agent or investment adviser were paid a fee of $3.1 million on November 24, 2003 and $0.3 million on March 17, 2004.

In consideration for financial and business advisory services provided to us in connection with our refinancing transaction completed in April 2004, W.R. Huff Asset Management was paid $7.5 million on April 22, 2004. Our board also granted to each of Eric Koza and Karim Samii, both employees of W.R. Huff Asset Management, the right to receive 20,000 restricted shares of our common stock under the Amended and Restated 2004 NTL Stock Incentive Plan. This plan was approved by our stockholders at our annual meeting of stockholders in May 2004. The restricted stock award was made in consideration of financial and business advisory services provided to us by Messrs. Koza and Samii. Shares authorized under the Amended and Restated 2004 NTL Stock Incentive Plan, including those granted to Messrs. Koza and Samii, were registered under a registration statement on Form S-8 that we filed with the SEC on May 6, 2004.

Note 10 - Comprehensive Loss

Comprehensive loss for the three and six months ended June 30, 2004 and 2003 was $501.8 million and $514.9 million, respectively, in 2004 and $124.5 million and $446.4 million, respectively, in 2003.  Comprehensive loss comprises (in millions) (unaudited):

	Three Months ended June 30,						Six Months ended June 30,
	2004			2003			2004			2003
Net loss for period	$	(448.5	)	$	(259.5	)	$	(568.8	)	$	(539.5	)
Currency translation adjustment	(55.3		)	135.0			51.9			93.1
Net unrealized gains on derivatives	2.0			—			2.0			—
Pension liability adjustment	—			—			—			—
Comprehensive loss	$	(501.8	)	$	(124.5	)	$	(514.9	)	$	(446.4	)

Note 11 - Commitments and Contingent Liabilities

At June 30, 2004, we were committed to pay $426.3 million for equipment and services and for investments in and loans to affiliates.  This amount includes $107.8 million for operations and maintenance contracts and other commitments from July 1, 2005 to June 30, 2006.  The aggregate amount of the fixed and determinable portion of these obligations for the succeeding five fiscal years is as follows (in millions) (unaudited):

Year ended June 30
2005	$	318.5
2006	107.8
2007	—
2008	—
2009	—
	$	426.3

We are involved in certain 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.

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Our banks have provided guarantees in form of performance bonds on our behalf as part of our contractual obligations. The fair value of the guarantees has been calculated by reference to the monetary value for each performance bond. The amount of commitment expires over the following periods (in millions) (unaudited):

Year ended June 30
2005	$	0.7
2006	17.5
2007	—
2008	—
2009	—
Thereafter	15.0
	$	33.2

Note 12 - Segment Data

We are a leading broadband and communications services company in the UK and the Republic of Ireland based on total residential subscriber numbers. We provide our services to our customers through five reportable segments.

•ntl: home, which provides residential telephone, cable television and Internet services, as well as wholesale Internet access solutions to internet service providers in the UK;

•ntl: business, which provides data, voice and Internet services to large businesses, public sector organizations and small- and medium-sized enterprises located near our existing residential broadband network in the UK;

•ntl: broadcast, which provides digital and analog television and radio broadcast transmission services, network management, tower site rental and satellite and media services, as well as radio communications to public safety organizations, in the UK;

•ntl: carriers, which provides national and international communications transport services to communications companies in the UK and the Republic of Ireland; and

•ntl: Ireland, which provides primarily cable television services, as well as telephone and Internet services, to residential customers and television, data, voice and Internet services to business customers in the Republic of Ireland.

Our reportable segments are supported by various central shared services, including ntl: networks, which manages our UK national network. Other shared services include finance, information technology or IT, and human resources. Shared services also include assets and related depreciation and amortization that are not allocated to another segment. ntl: Ireland relies upon these central shared services to a lesser extent than our other reportable segments. Stock-based compensation expense forms a component of central shared services.

Our primary measure of profit or loss for each reportable segment is segment profit (loss), and is defined below. We consider this measure an important indicator of the operational strength and performance of our reportable segments and of the trends affecting our segments. This measure excludes the impact of costs and expenses that do not directly affect cash flows such as depreciation, amortization and share of income (losses) from equity investments. We also exclude costs and expenses that are not directly related to the performance of a single reportable segment from this measure such as interest income and expense, and gains or losses on foreign currency transactions, rather than allocating these costs and expenses to multiple reportable segments. Segment profit (loss) also excludes the impact on our results of operations of items that we believe are not characteristic of our underlying business operations for the period in which they are recorded. Other charges are excluded from this measure for these reasons, as well as because certain of their components are not directly related to the performance of a single reportable segment. This financial measure and combined segment profit should be considered in addition to, not as a substitute for, operating income (loss), net (loss) and other measures of financial performance reported in accordance with generally accepted accounting principles. The reconciliation of combined segment profit to net (loss) can be found further below.

Selected financial information for each reportable segment and the shared services division for the three and six months ended June 30, 2004 and 2003 is as follows (in millions):

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	Revenues								Segment profit / (loss) (1)
	Three months ended June 30,				Six months ended June 30,				Three months ended June 30,						Six months ended June 30,
	2004		2003		2004		2003		2004			2003			2004			2003
ntl: home	$	718.4	$	598.2	$	1,451.3	$	1,178.5	$	318.2		$	265.1		$	643.3		$	509.8
ntl: business	120.5		115.3		247.8		235.5		47.8			38.8			96.0			72.6
ntl: broadcast	131.3		104.9		262.6		208.0		60.8			43.6			115.8			89.4
ntl: carriers	52.8		44.4		105.3		88.6		42.2			37.7			84.3			73.3
ntl: Ireland	32.5		29.7		64.6		57.8		11.0			9.0			22.2			16.9
Shared services	—		—		—		—		(114.3		)	(114.8		)	(237.4		)	(232.2		)
Total	$	1,055.5	$	892.5	$	2,131.6	$	1,768.4	$	365.7		$	279.4		$	724.2		$	529.8
															Total assets
															June 30, 2004			December 31, 2003
															(unaudited)
ntl: home															$	6,857.4		$	7,041.1
ntl: business															687.7			688.6
ntl: broadcast															1,432.8			1,453.4
ntl: carriers															678.1			752.7
ntl: Ireland															228.8			233.1
Shared services (2)															437.9			1,003.9
Total															$	10,322.7		$	11,172.8

(1)Represents earnings before interest, taxes, depreciation, amortization, other charges, share of income from equity investments, loss on extinguishment of debt and foreign currency transaction gains (losses).

(2)At June 30, 2004, shared assets included $144.2 million of cash and cash equivalents and $293.7 million of other assets. At December 31, 2003, shared assets included $729.4 million of cash and cash equivalents and $274.5 million of other assets.

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The reconciliation of combined segment profit to net (loss) is as follows (in millions):

	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Combined segment profit	$	365.7		$	279.4		$	724.2		$	529.8
Add (deduct):
Other charges	(26.9		)	(20.9		)	(27.8		)	(23.8		)
Depreciation	(295.3		)	(290.7		)	(591.8		)	(575.1		)
Amortization	(56.2		)	(50.4		)	(113.3		)	(100.2		)
Interest income and other, net	6.5			3.2			9.5			5.9
Interest expense	(127.3		)	(186.9		)	(265.2		)	(363.4		)
Loss on extinguishment of debt	(290.1		)	—			(290.1		)	—
Share of income from equity investments	1.0			(1.6		)	2.2			(1.5		)
Foreign currency transaction (losses) gains	(25.3		)	21.0			(12.4		)	17.6
Income tax expense	(0.6		)	(12.6		)	(4.1		)	(28.8		)
	(814.2		)	(538.9		)	(1,293.0		)	(1,069.3		)
Net loss	$	(448.5	)	$	(259.5	)	$	(568.8	)	$	(539.5	)

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

Overview

On January 10, 2003, we emerged from reorganization under Chapter 11 of the U.S. Bankruptcy Code. As part of the Plan, we reduced our indebtedness significantly and changed our name from NTL Communications Corp. to NTL Incorporated.

We are a leading broadband and communications services company in the UK and the Republic of Ireland based on total residential subscriber numbers. We provide our services to our customers through five reportable segments.

•ntl: home provides residential telephone, cable television and Internet services, as well as wholesale Internet access solutions to internet service providers in the UK.

•ntl: business provides data, voice and Internet services to large businesses, public sector organizations and small- and medium-sized enterprises located near our existing residential broadband network in the UK.

•ntl: broadcast provides digital and analog television and radio broadcast transmission services, network management, tower site rental and satellite and media services as well as radio communications to public safety organizations, in the UK.

•ntl: carriers provides national and international communications transport services for communications companies in the UK and the Republic of Ireland.

•ntl: Ireland provides primarily cable television services, as well as telephone and Internet services, to residential customers and television, data, voice and Internet services to business customers in the Republic of Ireland.

Our reportable segments are supported by various central shared services, including ntl: networks, which manages our UK national network. Other shared services include finance, IT and human resources. ntl: Ireland relies upon these central shared services to a lesser extent than our other reportable segments. Stock-based compensation expense forms a component of central shared services.

Revenues

The principal sources of revenues within each reportable segment are:

•ntl: home: monthly fees and usage charges for telephone service, cable television service and Internet access as well as fees and charges for wholesale Internet access solutions in the UK;

•ntl: business: monthly fees and usage charges for inbound and outbound voice, data and Internet services in the UK;

•ntl: broadcast: charges for site leasing services, television and radio broadcasting and satellite up-linking for program and content distribution in the UK. We also derive revenues from various communications services provided to public safety organizations;

•ntl: carriers: charges for transmission, fiber and voice services provided to other telecommunications service providers over our national network in the UK and the Republic of Ireland; and

•ntl: Ireland: monthly fees and usage charges for cable television services and, to a lesser extent, telephone and Internet services in the Republic of Ireland.

Expenses

The principal components of our operating costs and selling, general and administrative expenses include:

•payroll and other employee related costs;

•interconnection costs paid to other carriers related to telephone services;

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•television programming costs primarily incurred by ntl: home and ntl: Ireland;

•marketing and selling costs;

•repairs and maintenance;

•facility related costs, like rent, utilities and rates; and

•allowances for doubtful accounts.

Segment Profit (Loss)

Our primary measure of profit or loss for each of our reportable segments is segment profit (loss). Our management, including our chief executive officer who is our chief operating decision maker, considers segment profit (loss) an important indicator of the operational strength and performance of our reportable segments. Segment profit (loss) for each reportable segment and the shared services division excludes the impact of costs and expenses that either do not directly affect our cash flows or do not directly relate to the operating performance of that segment or division. These costs and expenses include:

•depreciation;

•amortization;

•interest expense;

•loss on extinguishment of debt;

•foreign currency transaction gains (losses);

•share of income (losses) from equity investments; and

•taxation.

Other charges, including restructuring charges and other losses are also excluded from segment profit (loss) as management believes they are not characteristic of our underlying business operations. Furthermore management believes that some of the components of these charges are not directly related to the performance of a single reportable segment.

We also measure combined segment profit, which represents the combined measure of the segment profit (loss) from each of our reportable segments and our shared services division. Combined segment profit is not a financial measure under United States generally accepted accounting principles, or U.S. GAAP. A discussion relating to use of this measure is set forth below under “—Use of Non-U.S. GAAP Financial Measures.”

Combined segment profit (loss) should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) and other measures of financial performance reported in accordance with U.S. GAAP.

Factors Affecting Our Business

ntl: home.  Our ntl: home segment accounts for the majority of our total revenues. The revenues of ntl: home are driven by the number of customers, the number and types of services which each customer uses and the prices we charge for these services. Our segment profit is driven by the relative margins on the types of services we provide to customers. For example, broadband Internet is more profitable than analog television. Our packaging of services and pricing are designed to encourage our customers to use multiple services like dual telephone and broadband. The factors impacting our ntl: home segment include customer churn, average revenue per user, or ARPU, and competition.

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Summary customer statistics: Selected statistics in respect of customers connected directly to our network for ntl: home for the three months ended June 30, 2004 as well as the four prior quarters are set forth in the table below.

	June 30, 2004			March 31, 2004			December 31, 2003			September 30, 2003			June 30, 2003
Opening customers (1)	2,923,200			2,867,900			2,809,500			2,753,300			2,713,500
Datacleanse (2)	(2,200		)	(6,200		)	—			—			—
Opening customers after datacleanse	2,921,000			2,861,700			2,809,500			2,753,300			2,713,500
Customer additions	166,500			160,300			153,900			158,500			129,300
Customer disconnects	106,000			98,800			95,500			102,300			89,500
Net customer movement	60,500			61,500			58,400			56,200			39,800
Closing customers (1)	2,981,500			2,923,200			2,867,900			2,809,500			2,753,300
Churn (3)	1.2		%	1.1		%	1.1		%	1.2		%	1.1		%
Revenue generating units (2, 4)	5,752,600			5,636,100			5,497,800			5,364,100			5,240,700
Television	2,070,600			2,048,900			2,023,600			2,009,700			2,022,800
DTV	1,408,700			1,371,000			1,330,000			1,294,800			1,269,700
Telephone	2,593,100			2,558,400			2,525,000			2,489,800			2,453,700
Broadband	1,088,900			1,028,800			949,200			864,600			764,200
RGU/customers	1.93x			1.93x			1.92x			1.91x			1.90x
Internet dial-up and DTV access (5)	293,300			321,100			324,300			332,100			349,100
Broadband 60 day free trial	6,800			—			—			—			—
Average revenue per user (6)	£	41.38		£	41.91		£	41.96		£	41.43		£	41.04

(1)Opening and closing customers include master antenna television, or MATV customers.

(2)Data-cleanse activity, as part of the harmonization of billing systems, resulted in a reduction of recorded customers of approximately 2,200 and an increase to revenue generating units, or RGUs, of approximately 800.  We anticipate that there may be similar adjustments to customer and RGU numbers as the data cleanse progresses during the course of this year.

(3)Monthly customer churn is calculated by taking the total disconnects during the month and dividing them by the average number of customers during the month. Average monthly churn during a quarter is the average of the three monthly churn calculations within the quarter.

(4)Each telephone, television and broadband Internet subscriber directly connected to our network counts as one RGU. Accordingly, a subscriber who receives both telephone and television service counts as two RGUs. RGUs may include subscribers receiving some services for free or at a reduced rate in connection with incentive offers. The 6,800 60-day free trial broadband customers are excluded from the RGU numbers. The National Cable & Telecommunications Association reporting guidelines for the U.S. cable industry do not recognize dial-up Internet customers as RGUs, although they are revenue generating for us.

(5)Dial-up Internet customers have been adjusted to exclude metered customers who have not used the service for 30 days or more. The data cleanse activity reduced dial-up internet customers by approximately 20,000.

(6)Average Revenue Per User, or ARPU, is calculated on a monthly basis by dividing total revenues generated from the provision of telephone, cable television and Internet services to customers who are directly connected to our network in that month, exclusive of VAT, by the average number of customers in that month. Quarterly ARPU is the average of the three months in that quarter.

Customer Churn.  An increase in our customer churn can lead to increased costs and reduced revenues. We continue to focus on improving our customer service and enhancing and expanding our service offerings to existing customers in an effort to manage our customer churn rate. Customer churn is a measure of the number of customers who stop using our services. Although our ability to reduce our customer churn rate beyond a base level is limited by factors like customers moving outside our network service area, in particular during the summer season, managing our customer churn rate is a significant component of our business plan. To help meet these objectives, we need to integrate our billing systems and customer databases across our entire network. Although we are in the process of

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integrating our billing systems and customer databases, there can be no assurance that we will be successful in reaching this goal. In addition, our customer churn rate may also increase if we are unable to deliver our services over our network without interruption.

ARPU.  ARPU is a measure we use to evaluate how effectively we are realizing potential revenues from customers. We believe that our “triple play” offering of telephone service, broadband access to the Internet and DTV will prove attractive to our existing customer base and allow us to increase our ARPU by facilitating the sale of multiple services to each customer.

Competition.  Our ability to acquire and retain customers and increase revenues depends on our competitive strength. There is significant competition in our markets through digital satellite offered by BSkyB and digital terrestrial television offered by Freeview, as well as through alternative Internet access services, like DSL, which is offered by BT. If competitive forces prevent us from charging the prices for these services that we plan to charge, or if our competition is able to attract our customers or potential customers we are targeting, our results of operations will be adversely affected.

Capital Expenditures.  Our business requires substantial capital expenditures on a continuing basis for various purposes, including expanding and upgrading our network, investing in new customer acquisitions, and offering new services. If we do not continue to invest in our network, our ability to retain and acquire customers may be hindered. Therefore, our liquidity and the availability of cash to fund capital projects are important drivers of our revenues. When our liquidity is restricted, so is our ability to meet our capital expenditure requirements. We believe that our cash on hand, together with cash from operations and, if required, drawdowns under the £250 million revolving tranche of our new credit facility, will be sufficient for our cash requirements through June 2005. However, our cash requirements after that time may exceed, perhaps significantly, these sources of cash.

Capital expenditures include 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.

Labor and overhead costs directly related to the construction and installation of fixed assets, including payroll and related costs of some employees and related rent and other occupancy costs, are capitalized. The payroll and related costs of some 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, costs are capitalized based upon estimated allocations. The labor and overhead costs capitalized in the three and six months ended June 30, 2004 was £15.8 million and £31.8 million, or $28.5 million and $57.9 million, respectively, and in the three and six months ended June 30, 2003 was £20.7 million and £44.4 million, or $33.5 million and $71.5 million, respectively.

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The following table illustrates the calculation of labor and overhead costs capitalized as a percentage of total operating costs and selling, general and administrative expenses and as a percentage of cash used to purchase fixed assets (in millions, except percentage amounts).

	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Labor and overhead costs capitalized	$	28.5		$	33.5		$	57.9		$	71.5
Total operating costs and selling, general and administrative expenses	689.8			613.1			1,407.4			1,238.6
Labor and overhead costs capitalized as a percentage of total operating costs and selling, general and administrative expenses	4.1		%	5.5		%	4.1		%	5.8		%
Purchase of fixed assets	129.5			114.5			234.2			299.7
Labor and overhead costs capitalized as a percentage of purchase of fixed assets	22.0		%	29.3		%	24.7		%	23.9		%

Currency Movements.  We encounter currency exchange rate risks because substantially all of our revenues and operating costs are earned and paid primarily in pounds sterling and, to a lesser extent, euros, but we pay interest and principal obligations with respect to a portion of our existing indebtedness in U.S. dollars. To the extent that the pound sterling declines in value against the U.S. dollar, the effective cost of servicing our U.S. dollar debt will be higher. As of June 30, 2004, $920.2 million, or 16.7% of our long-term debt, was denominated in U.S. dollars.

Because revenues and expenses from our principal operations are denominated primarily in pounds sterling but we report our financial results in U.S. dollars, our financial results are also impacted by currency fluctuations, which are unrelated to our underlying results of operations.

Seasonality.  Certain revenue streams are subject to seasonal factors. For example, telephone usage revenues in ntl: home and ntl: business tend to be slightly lower during summer holiday months. Our customer churn rates include persons who disconnect service owing to moves, resulting in a seasonal increase in our churn rates during the summer months when higher levels of UK house moves occur and students leave their accommodations between school years.

Integration of Billing Systems.  Our historical growth through acquisitions has resulted in numerous billing systems and incompatible technology infrastructure. We are in the process of merging most of these systems onto a single set of platforms for use by our ntl: home and ntl: business segments. We expect this integration to reduce costs and improve customer call center efficiencies. Through June 30, 2004, we have expended approximately £73 million, or $124 million, of which approximately £17 million, or $31 million, was incurred in 2004. We currently expect the total cost of the integration to be approximately £89 million, or $153 million. Additionally, we are currently re-phasing the project and now expect the integration to be completed in the first quarter of 2005.

Call Center Consolidation. On April 7, 2004, we announced the consolidation over the next 18 months of our 13 customer service call centers, which support our ntl: home division, into three call centers in the UK equipped for growth. Following an internal review, three specialist call centers will be retained and developed and will be supported by four sales and customer support sites, located throughout the UK. As part of the consolidation, we intend to make additional investments in technology and training in order to streamline processes and generate efficiencies. As a result of these investments, we expect that in the medium term we will be able to deliver a higher level of customer service with up to 1,500 fewer employees. As of June 30, 2004, we have incurred £15.3 million, or $27.8 million, and we expect to incur approximately £25 million, or $45 million, of costs to execute this program.

If the integration of our billing systems or the consolidation of our call centers are not successful, we could experience an adverse effect on our customer service, customer churn rate and costs of maintaining these systems going forward. We could also experience operational failures related to billing and collecting revenues from our customers which, depending on the severity of the failure, could have a material adverse effect on our business.

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Consolidated Results of Operations

Three months ended June 30, 2004 and 2003

Revenues

For the three months ended June 30, 2004, consolidated revenues increased by 18.3% to $1,055.5 million from $892.5 million for the same period in 2003. Revenues expressed in pounds sterling increased by 6.0% to £584.4 million from £551.3 million for the same period. This increase is substantially due to higher revenues in ntl: home primarily a result of more customers subscribing to our broadband Internet services and our telephony services.

Expenses

Operating Costs.  For the three months ended June 30, 2004, operating costs, including network expenses, increased by 16.4% to $452.9 million from $389.2 million for the same period in 2003, and operating costs expressed in pounds sterling increased by 4.4% to £250.8 million compared with £240.3 million for the same period in 2003. Operating costs as a percentage of revenues decreased to 42.9% for the three months ended June 30, 2004, from 43.6% for the same period in 2003 primarily because revenue increases were focused on higher margin products and customers.

Selling, general and administrative expenses.  For the three months ended June 30, 2004, selling, general and administrative expenses increased by 5.8% to $236.9 million from $223.9 million for the same period in 2003, and selling, general and administrative expenses expressed in pounds sterling decreased by 5.3% to £131.2 million from £138.5 million for the same period in 2003. Selling, general and administrative expenses as a percentage of revenues decreased to 22.4% for the three months ended June 30, 2004, from 25.1% for the same period in 2003.

This improvement is primarily due to decreases in the cost of our outsourced IT services, and reductions in property and facility costs, as a result of property rationalization.

Other Charges

Other charges of $26.9 million in the three months ended June 30, 2004, relate to costs incurred in connection with our call center consolidation program. Of the costs incurred, $22.6 million relates to involuntary employee termination and related costs in respect of approximately 2,300 employees of whom approximately 400 were terminated by June 30, 2004, and $4.3 million of other costs.

Other charges of $20.9 million in the three months ended June 30, 2003 were restructuring charges primarily for involuntary employee termination and related costs. These costs were incurred for approximately 510 employees, all of whom were terminated by June 30, 2004.

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The following table summaries the restructuring charges incurred and utilized in the three months ended June 30, 2004 (in millions):

	Involuntary employee termination and related costs			Lease exit costs			Agreement modifications		Other			Total
Balance, March 31, 2004	$	—		$	70.2		$	0.4	$	0.5		$	71.1
Foreign currency exchange translation adjustments	—			(1.4		)	—		—			(1.4		)
Released	—			—			—		—			—
Charged to expense	22.6			—			—		4.3			26.9
Utilized	(3.8		)	(5.4		)	—		(4.3		)	(13.5		)
Balance, June 30, 2004	$	18.8		$	63.4		$	0.4	$	0.5		$	83.1

Depreciation expense

For the three months ended June 30, 2004, depreciation expense increased to $295.3 million from $290.7 million for the same period in 2003.  Depreciation expense expressed in pounds sterling decreased to £163.5 million in 2004 from £179.5 million for the same period in 2003.  This reduction in depreciation expense is due to the absence of depreciation on some assets that became fully depreciated in 2003.

Amortization expense

For the three months ended June 30, 2004, amortization expense increased to $56.2 million from $50.4 million for the same period in 2003. Amortization expense expressed in UK pound sterling remained constant at £31.1 million. Amortization expense relates to the amortization of customer lists that are being amortized over useful economic lives of between 3 and 12 years.

Interest expense

For the three months ended June 30, 2004, interest expense decreased to $127.3 million from $186.9 million for the same period in 2003. This reduction resulted from the repayment of $1.2 billion of indebtedness in November 2003 from the proceeds of our rights offering and the effects of our refinancing transaction in April 2004 that lowered our weighted average interest expense.

We paid interest in cash of $142.3 million for the three months ended June 30, 2004, and $30.0 million for the three months ended June 30, 2003. The increase in cash interest payments resulted from the earlier than scheduled interest payments of $89.5 million, which arose due to the completion of our refinancing transactions and corresponding settlement of interest due.

Loss on extinguishment of debt

For the three months ended June 30, 2004, loss on extinguishment of debt was $290.1 million, or £162.3 million, and relates to the redemption, or repayment, of our indebtedness in the refinancing transaction. The loss comprises the payment of the premium of $11.4 million on the redemption of the Diamond notes and the expensing of the unamortized issue costs of $115.4 million and unamortized discount of $163.3 million on the redemption of the Diamond notes and the Triangle debentures and the repayment of the then-existing senior credit facility.

Foreign currency transaction gains (losses)

Our principal operating functional currencies are the pound sterling and the euro, while our reporting currency is the U.S. dollar. The assets and liabilities of our UK and Ireland subsidiaries have been translated using the exchange rates in effect at the balance sheet dates, and revenues and expenses have been translated at the weighted average rates for the respective periods. Exchange gains and losses on translation of our net equity investment in our subsidiaries are reported as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. Foreign currency transaction gains and losses are recorded in the statement of operations.

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For the three months ended June 30, 2004, foreign currency transaction losses were $25.3 million as compared with gains of $21.0 million for 2003. These losses for the three months ended June 30, 2004 were primarily because of the effect of changes in the exchange rate on our debt that is denominated in currencies other than pound sterling and unrealized losses of $6.9 million arising from changes in the fair value of our foreign currency forward contracts. Our results of operations will continue to be affected by foreign exchange rate fluctuations since $920.2 million of our indebtedness is denominated in U.S. dollars and €376.0 million is denominated in euros.

Income tax benefit (expense)

For the three months ended June 30, 2004, income tax expense was approximately $0.6 million as compared with income tax expense of $12.6 million for the same period in 2003.  The 2004 expense is composed of approximately $0.4 million in U.S. state and local income tax expense, approximately $0.4 million of deferred U.S. income tax benefit and approximately $0.6 million of deferred non-U.S income tax expense.  None of the 2004 income tax, except a portion of the state and local tax, is expected to be payable in the next year.

The 2003 expense is composed of $2.3 million U.S. federal income tax expense, $1.1 million U.S. state and local income tax expense and $9.2 million of deferred foreign income tax expense.

Net (loss)

For the three months ended June 30, 2004, net loss was $448.5 million as compared with a net loss of $259.5 million for the same period in 2003. The increase in net loss is attributable to the loss on extinguishment of debt offset by our improved operating performance and savings in interest expense.

Net (loss) per share

Basic and diluted net loss per common share for the three months ended June 30, 2004 was $5.16 and for the three months ended June 30, 2003 was $4.36. Basic and diluted net loss per common share is computed using an average of 87.0 million shares issued in the three months ended June 30, 2004 and an average of 59.5 million shares issued for the same period in 2003. Options to purchase 3.1 million shares and 0.2 million shares of restricted stock at June 30, 2004 are excluded from the calculation of diluted net loss per share, since the inclusion of such options and shares is anti-dilutive.

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Segment profit (loss)

Our revenues and segment profit (loss) as a percentage of revenues for each of our reportable segments and shared services division for the three months ended June 30, 2004 and 2003 are set forth in the table below (in millions, except percentage amounts):

	Three months ended June 30,						Three months ended June 30,
	2004			2003			2004			2003
Revenues:
ntl: home	$	718.4		$	598.2		£	397.8		£	369.5
ntl: business	120.5			115.3			66.8			71.2
ntl: broadcast	131.3			104.9			72.6			64.8
ntl: carriers	52.8			44.4			29.3			27.4
ntl: Ireland	32.5			29.7			17.9			18.4
Total revenues	$	1,055.5		$	892.5		£	584.4		£	551.3
Segment profit (loss):
ntl: home	$	318.2		$	265.1		£	176.2		£	163.7
ntl: business	47.8			38.8			26.5			24.0
ntl: broadcast	60.8			43.6			33.6			26.9
ntl: carriers	42.2			37.7			23.4			23.3
ntl: Ireland	11.0			9.0			6.1			5.6
Shared services	(114.3		)	(114.8		)	(63.4		)	(71.0		)
Combined segment profit	$	365.7		$	279.4		£	202.4		£	172.5
Segment profit as a percentage of revenues:
ntl: home							44.3		%	44.3		%
ntl: business							39.7		%	33.7		%
ntl: broadcast							46.3		%	41.5		%
ntl: carriers							79.9		%	85.0		%
ntl: Ireland							34.1		%	30.3		%
Shared services							—		%	—		%
Combined segment profit as a percentage of revenues							34.6		%	31.3		%

ntl: home.  For the three months ended June 30, 2004, ntl: home revenues increased by 20.1% to $718.4 million from $598.2 million for the same period in 2003, and revenues expressed in pounds sterling increased by 7.7% to £397.8 million from £369.5 million during the same period in 2003. This was primarily a result of more customers subscribing to our broadband Internet services, and our telephony services.

For the three months ended June 30, 2004, ntl: home segment profit increased by 20.0% to $318.2 million from $265.1 million for the same period in 2003, and segment profit expressed in pounds sterling increased by 7.6% to £176.2 million from £163.7 million during the same period in 2003. This increase is primarily due to higher revenues from our broadband Internet services and telephony services offset by higher telephony interconnect costs associated with those revenues and higher television programming costs owing to increases in rates charged to us by the suppliers of those programs.

ntl: business.  For the three months ended June 30, 2004, ntl: business revenues increased by 4.5% to $120.5 million from $115.3 million for the same period in 2003, and revenues expressed in pounds sterling decreased by 6.2% to £66.8 million from £71.2 million

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during the same period in 2003. This was primarily because of lower telephony call revenue offset by slightly higher rental and project revenues.

For the three months ended June 30, 2004, ntl: business segment profit increased by 23.2% to $47.8 million from $38.8 million for the same period in  2003, and segment profit expressed in pounds sterling increased by 10.4% to £26.5 million from £24.0 million during the same period in 2003. This increase was primarily a result of reduced employee costs following a substantial organizational restructuring of ntl: business during 2003, together with the impact of further operational efficiencies and cost cutting including lower repairs and maintenance charges, and lower allowances for doubtful accounts. The reductions in revenue described above did not have a material impact on segment profit because of the low profitability of these revenue streams.

ntl: broadcast.  For the three months ended June 30, 2004, ntl: broadcast revenues increased by 25.2% to $131.3 million from $104.9 million for the same period in 2003, and revenues expressed in pounds sterling increased by 12.0% to £72.6 million from £64.8 million during the same period in 2003. This was primarily a result of higher revenues from delivery of radio communications services to the public safety sector. These arose principally from managed service contracts with UK county police forces for the migration from analog to digital communication systems together with the supply of radio equipment and associated project and technical labor. We also generated additional revenues from the continued rollout of digital radio services, increases in site sharing, and increases in project services.

For the three months ended June 30, 2004, ntl: broadcast segment profit increased by 39.4% to $60.8 million from $43.6 million for the same period in 2003, and segment profit expressed in pounds sterling increased by 24.9% to £33.6 million from £26.9 million during the same period in 2003. This was primarily as a result of the increased revenues described above together with a refund of $3.3 million, or £1.8 million, of local authority property rates.

 ntl: carriers.  For the three months ended June 30, 2004, ntl: carriers revenues increased by 18.9% to $52.8 million from $44.4 million for the same period in 2003, and revenues expressed in pounds sterling increased by 6.9% to £29.3 million from £27.4 million during the same period in 2003. This was primarily due to increased revenues from wholesale call termination partly offset by reduced revenues due to end of term contracts in 2003 not being renewed or replaced.

For the three months ended June 30, 2004, ntl: carriers segment profit increased by 11.9% to $42.2 million from $37.7 million for the same period in 2003, and segment profit expressed in pounds sterling increased by 0.4% to £23.4 million from £23.3 million during the same period in 2003. The small increase in segment profit expressed in pound sterling was due to the low margin revenue growth in a highly price competitive market.

 ntl: Ireland.  For the three months ended June 30, 2004, ntl: Ireland revenues increased by 9.4% to $32.5 million from $29.7 million for the same period in 2003, revenues expressed in pounds sterling decreased by 2.7% to £17.9 million from £18.4 million and revenues expressed in euros increased by 2.7% to  €26.9 million from  €26.2 million during the same period in 2003 due to several factors including price increases and improved business revenues offset by the impact of fewer customers following the disconnection of a large number of non-paying customers during 2003.

For the three months ended June 30, 2004, ntl: Ireland segment profit increased by 22.2% to $11.0 million from $9.0 million for the same period in 2003, segment profit expressed in pounds sterling increased by 8.9% to £6.1 million from £5.6 million during the same period in 2003, and segment profit expressed in euros increased by 13.8% to €9.1 million from €8.0 million for the same period in 2003. This increase in segment profit was primarily owing to the higher revenues and a reduction in our bad debt charge as a result of our more rigorous credit policy.

 ntl: shared services.  For the three months ended June 30, 2004, ntl: shared services loss decreased by 0.4% to $114.3 million from $114.8 million for the same period in 2003, and the loss expressed in pounds sterling decreased by 10.7% to £63.4 million from £71.0 million during the same period in 2003. The stock-based compensation expense component increased to £4.9 million from £2.5 million in the same period in 2003 as a result of employee stock awards in the quarter. The loss from the remainder of ntl: shared services decreased to £58.5 million from £68.5 million during the same period in 2003. This decrease was principally as a result of savings arising from our re-negotiation of our contract with IBM for outsourced IT services in the third quarter of 2003 together with lower property and facility costs as a result of property rationalization.

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Six months ended June 30, 2004 and 2003

Revenues

For the six months ended June 30, 2004, consolidated revenues increased by 20.5% to $2,131.6 million from $1,768.4 million for the same period in 2003. Revenues expressed in pounds sterling increased by 6.5% to £1,169.4 million from £1,097.8 million for the same period. This increase is substantially due to increased revenues in ntl: home primarily a result of more customers subscribing to our broadband Internet services and our telephony services.

Expenses

Operating Costs.  For the six months ended June 30, 2004, operating costs, including network expenses, increased by 15.8% to $924.2 million from $797.8 million for the same period in 2003, and operating costs expressed in pounds sterling increased by 2.4% to £507.0 million from £495.3 million for the same period in 2003. Operating costs as a percentage of revenues decreased to 43.4% for the six months ended June 30, 2004, from 45.1% for the same period in 2003 primarily because revenue increases were focused on higher margin products and customers.

Selling, general and administrative expenses.  For the six months ended June 30, 2004, selling, general and administrative expenses increased by 9.6% to $483.2 million from $440.8 million for the same period in 2003, and selling, general and administrative expenses expressed in pounds sterling decreased by 3.1% to £265.1 million from £273.7 million for the same period in 2003. Selling, general and administrative expenses as a percentage of revenues decreased to 22.7% for the six months ended June 30, 2004, from 24.9% for the same period in 2003.  Decreases in the cost of our outsourced IT services, savings in property and related facility costs, and reductions in employee costs and other cost efficiencies in our ntl: business segment have been largely offset by increased sales and marketing costs in our ntl: home segment together with the adverse impact of costs no longer capitalized resulting from the redeployment of resources from capital to operating activities.

Other Charges

Other charges of $27.8 million in the six months ended June 30, 2004, relate to costs incurred in connection with our call center consolidation program. Of the costs incurred, $22.6 million relates to involuntary employee termination and related costs in respect of approximately 2,300 employees of whom approximately 400 were terminated by June 30, 2004, and $5.2 million relates to other costs of the consolidation program.

Other charges of $23.8 million in the six months ended June 30, 2003 were restructuring charges primarily for involuntary employee termination and related costs. These costs were incurred for approximately 635 employees, all of whom were terminated by June 30, 2004.

The following table summaries the restructuring charges incurred and utilized in the six months ended June 30, 2004 (in millions):

	Involuntary employee termination and related costs			Lease exit costs			Agreement modifications			Other			Total
Balance, December 31, 2003	$	—		$	72.1		$	0.5		$	0.5		$	73.1
Foreign currency exchange translation adjustments	—			0.7			—			—			0.7
Released	—			—			—			—			—
Charged to expense	22.6			—			—			5.2			27.8
Utilized	(3.8		)	(9.4		)	(0.1		)	(5.2		)	(18.5		)
Balance, June 30, 2004	$	18.8		$	63.4		$	0.4		$	0.5		$	83.1

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Depreciation expense

For the six months ended June 30, 2004, depreciation expense increased to $591.8 million from $575.1 million for the same period in 2003.  Depreciation expense expressed in pounds sterling decreased to £324.7 million in 2004 from £357.0 million for the same period in 2003.  This reduction in depreciation expense is due to the absence of depreciation on some assets that became fully depreciated in 2003.

Amortization expense

For the six months ended June 30, 2004, amortization expense increased to $113.3 million from $100.2 million for the same period in 2003. Amortization expense expressed in UK pound sterling remained constant at £62.2 million. Amortization expense relates to the amortization of customer lists that are being amortized over useful economic lives of between 3 and 12 years.

Interest expense

For the six months ended June 30, 2004, interest expense decreased to $265.2 million from $363.4 million for the same period in 2003, primarily as a result of the repayment of $1.2 billion of indebtedness in November 2003 from the proceeds of our rights offering and the effects of the refinancing transaction in April 2004 that lowered our weighted average interest expense.

We paid interest in cash of $354.2 million for the six months ended June 30, 2004, and $250.7 million for the six months ended June 30, 2003.  The increase in cash interest payments resulted from the earlier than scheduled interest payments of $89.5 million, which arose due to the completion of our refinancing transactions and corresponding settlement of interest due.

Loss on extinguishment of debt

For the six months ended June 30, 2004, loss on extinguishment of debt was $290.1 million, or £162.3 million, and relates to the redemption, or repayment, of our indebtedness in the refinancing transaction. The loss comprises the payment of the premium of $11.4 million on the redemption of the Diamond notes and the expensing of the unamortized issue costs of $115.4 million and unamortized discount of $163.3 million on the redemption of the Diamond notes and the Triangle debentures and the repayment of the then-existing senior credit facility.

Foreign currency transaction gains (losses)

For the six months ended June 30, 2004, foreign currency transaction losses were $12.4 million as compared with gains of $17.6 million for 2003. These losses for the six months ended June 30, 2004 were primarily because of the effect of changes in the exchange rate on the U.S. dollar and euro denominated debt and unrealized losses of $6.9 million arising from changes in the fair value of our foreign currency forward contracts. Our results of operations will continue to be affected by foreign exchange rate fluctuations since $920.2 million of our indebtedness is denominated in U.S. dollars and €376.0 million is denominated in euros.

Income tax benefit (expense)

For the six months ended June 30, 2004, income tax expense was approximately $4.1 million as compared with income tax expense of $28.8 million for the same period in 2003.  The 2004 expense is composed of approximately $1.2 million in U.S. state and local income tax expense, approximately $1.5 million of deferred U.S. income tax expense and approximately $1.4 million of deferred non-U.S. income tax expense.  None of the 2004 income tax, except a portion of the state and local tax, is expected to be payable in the next year.

The 2003 expense is composed of $12.8 million U.S. federal income tax expense, $1.1 million U.S. state and local income tax expense and $14.9 million of deferred foreign income tax expense.

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Net (loss)

For the six months ended June 30, 2004, net loss was $568.8 million as compared with a net loss of $539.5 million for the same period in 2003. The increase in net loss is attributable to the loss on extinguishment of debt offset by our improved operating performance and savings in interest expense.

Net (loss) per share

Basic and diluted net loss per common share for the six months ended June 30, 2004 was $6.55 and for the six months ended June 30, 2003 was $9.07. Basic and diluted net loss per common share is computed using an average of 86.9 million shares issued in the six months ended June 30, 2004 and an average of 59.5 million shares issued for the same period in 2003. Options to purchase 3.1 million shares and 0.2 million shares of restricted stock at June 30, 2004 are excluded from the calculation of diluted net loss per share, since the inclusion of such options and shares is anti-dilutive.

Segment profit (loss)

Our revenues and segment profit (loss) as a percentage of revenues for each of our reportable segments and shared services division for the six months ended June 30, 2004 and 2003 are set forth in the table below (in millions, except percentage amounts):

	Six months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Revenues:
ntl: home	$	1,451.3		$	1,178.5		£	796.2		£	731.6
ntl: business	247.8			235.5			136.0			146.2
ntl: broadcast	262.6			208.0			144.0			129.1
ntl: carriers	105.3			88.6			57.8			55.0
ntl: Ireland	64.6			57.8			35.4			35.9
Total revenues	$	2,131.6		$	1,768.4		£	1,169.4		£	1,097.8
Segment profit (loss):
ntl: home	$	643.3		$	509.8		£	352.9		£	316.4
ntl: business	96.0			72.6			52.7			45.1
ntl: broadcast	115.8			89.4			63.5			55.5
ntl: carriers	84.3			73.3			46.3			45.5
ntl: Ireland	22.2			16.9			12.2			10.5
Shared services	(237.4		)	(232.2		)	(130.3		)	(144.2		)
Combined segment profit	$	724.2		$	529.8		£	397.3		£	328.8
Segment profit as a percentage of revenues:
ntl: home							44.3		%	43.2		%
ntl: business							38.8		%	30.8		%
ntl: broadcast							44.1		%	43.0		%
ntl: carriers							80.1		%	82.7		%
ntl: Ireland							34.5		%	29.2		%
Shared services							—		%	—		%
Combined segment profit as a percentage of revenues							34.0		%	30.0		%

ntl: home.  For the six months ended June 30, 2004, ntl: home revenues increased by 23.1% to $1,451.3 million from $1,178.5 million for the same period in 2003, and revenues expressed in pounds sterling increased by 8.8% to £796.2 million from £731.6 million during

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the same period in 2003. This was primarily a result of more customers subscribing to our broadband Internet services, and our telephony services.

For the six months ended June 30, 2004, ntl: home segment profit increased by 26.2% to $643.3 million from $509.8 million for the same period in 2003, and segment profit expressed in pounds sterling increased by 11.5% to £352.9 million from £316.4 million during the same period in 2003. This increase is primarily due to our higher revenues offset by additional sales and marketing costs including related employee costs together with the adverse impact of costs no longer capitalized resulting from the redeployment of resources from capital to operating activities.

 ntl: business.  For the six months ended June 30, 2004, ntl: business revenues increased by 5.2% to $247.8 million from $235.5 million for the same period in 2003, and revenues expressed in pounds sterling decreased by 7.0% to £136.0 million from £146.2 million during the same period in 2003. This was primarily because of fewer customers, major installations and orders as we executed our strategy of focusing on a smaller but more profitable customer base. In addition we have experienced lower telephone usage revenues per customer due to increased competition in the business telecommunications market particularly in respect of mobile traffic, together with a move towards the use of mobile telephones rather than fixed lines.

For the six months ended June 30, 2004, ntl: business segment profit increased by 32.2% to $96.0 million from $72.6 million for the same period in  2003, and segment profit expressed in pounds sterling increased by 16.9% to £52.7 million from £45.1 million during the same period in 2003. This increase was primarily a result of reduced employee costs following a substantial organizational restructuring of ntl: business during 2003, together with the impact of further operational efficiencies and cost cutting including lower repairs and maintenance charges, and lower allowances for doubtful accounts. The reductions in revenue described above did not have a material impact on segment profit because of the low profitability of these revenue streams.

ntl: broadcast.  For the six months ended June 30, 2004, ntl: broadcast revenues increased by 26.3% to $262.6 million from $208.0 million for the same period in 2003, and revenues expressed in pounds sterling increased by 11.5% to £144.0 million from £129.1 million during the same period in 2003. This was primarily a result of higher revenues from delivery of radio communications services to the public safety sector. These arose principally from managed service contracts with UK county police forces for the migration from analog to digital communication systems together with the supply of radio equipment and associated project and technical labor. We also generated additional revenues from the continued rollout of digital radio services, increases in site sharing, and increases in project services.

For the six months ended June 30, 2004, ntl: broadcast segment profit increased by 29.5% to $115.8 million from $89.4 million for the same period in 2003, and segment profit expressed in pounds sterling increased by 14.4% to £63.5 million from £55.5 million during the same period in 2003. This was primarily as a result of the increased revenues described above together with a rebate of $3.3 million, or £1.8 million, for local authority property rates.

 ntl: carriers.  For the six months ended June 30, 2004, ntl: carriers revenues increased by 18.8% to $105.3 million from $88.6 million for the same period in 2003, and revenues expressed in pounds sterling increased by 5.1% to £57.8 million from £55.0 million during the same period in 2003. This was primarily due to increased revenues from wholesale call termination partly offset by reduced revenues due to end of term contracts in 2003 not being renewed or replaced.

For the six months ended June 30, 2004, ntl: carriers segment profit increased by 15.0% to $84.3 million from $73.3 million for the same period in 2003, and segment profit expressed in pounds sterling increased by 1.8% to £46.3 million from £45.5 million during the same period in 2003. This increase in segment profit as expressed in pounds sterling was primarily due to the higher revenues.

 ntl: Ireland.  For the six months ended June 30, 2004, ntl: Ireland revenues increased by 11.8% to $64.6 million from $57.8 million for the same period in 2003, revenues expressed in pounds sterling decreased by 1.4% to £35.4 million from £35.9 million and revenues expressed in euros increased by 0.4% to €52.6 million from €52.4 million during the same period in 2003 due to price increases offset by the impact of fewer customers following the disconnection of a large number of non-paying customers during 2003.

For the six months ended June 30, 2004, ntl: Ireland segment profit increased by 31.4% to $22.2 million from $16.9million for the same period in 2003, segment profit expressed in pounds sterling increased by 16.2% to £12.2 million from £10.5 million during the same period in 2003, and segment profit expressed in euros increased by 19.1% to €18.1 million from €15.2 million for the same period in 2003. This increase in segment profit was primarily owing to a reduction in our bad debt charge as a result of our more rigorous credit policy together with reduced IT costs, employee costs, occupancy costs, and billing and collection costs.

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ntl: shared services.  For the six months ended June 30, 2004, ntl: shared services loss increased by 2.2% to $237.4 million from $232.2 million for the same period in 2003, and the loss expressed in pounds sterling decreased by 9.6% to £130.3 million from £144.2 million during the same period in 2003. The stock-based compensation expense component increased to £6.8 million from £2.7 million in the same period in 2003 as a result of stock awards in 2004.  The loss from the remainder of ntl: shared services decreased to £123.5 million from £141.5 million in the same period in 2003. This decrease was principally as a result of our re-negotiation of our contract with IBM for outsourced IT services in the third quarter of 2003 together with reduced property and related facility costs through further property rationalization and negotiated savings on our facility contracts.

Statement of Cash Flows

Six Months Ended June 30, 2004 and 2003

For the six months ended June 30, 2004, cash provided by operating activities increased to $280.8 million from $236.4 million for the same period in 2003, and cash provided by operating activities expressed in pounds sterling increased to £153.5 million from £146.8 million.  This increase was because of the improvement in operating results offset by an increase in cash paid for interest. For the six months ended June 30, 2004, cash paid for interest, exclusive of amounts capitalized, increased to $354.2 million from $245.2 million during the same period in 2003 and cash paid for interest, exclusive of amounts capitalized, expressed in pounds sterling increased to £194.1 million from £152.2 million.  This increase results from the refinancing transaction in which we paid cash interest of £49.4 million earlier than these payments were scheduled.

For the six months ended June 30, 2004, cash used in investing activities decreased to $227.5 million from $290.1 million for the same period in 2003 and cash used in investing activities expressed in pounds sterling decreased to £124.9 million from £180.1 million. The reduction is primarily because of reduced purchases of fixed assets.

Cash used in financing activities for the six months ended June 30, 2004 was $661.5 million compared with $4.8 million cash used in the six months ended June 30, 2003.

The principal components of the $661.5 million cash used in financing activities for the six months ended June 30, 2004 relate to our refinancing transaction completed in April 2004 as follows:

•$1,475.0 million (£812.2 million) was raised from the issuance of senior notes by our subsidiary, NTL Cable PLC;

•$3,949.8 million (£2,175.0 million) was drawn under the new senior credit facility, which together with some of the proceeds of the issuance of the senior notes and cash on hand, was used to repay in full our then-existing senior credit facility; and

•the remaining proceeds from the notes offering, together with cash on hand, was used to redeem the Diamond notes and NTL Triangle debentures and pay transaction costs.

For the six months ended June 30, 2003 we made $4.8 million principal payments on other indebtedness.

Liquidity and Capital Resources

In November 2003 we completed our rights offering from which we received gross proceeds of $1.4 billion. We used the net proceeds to repay over $1.2 billion of indebtedness.

We completed our refinancing transaction from which we raised approximately $5.9 billion indebtedness. The refinancing transaction extended the maturities on substantially all of our debt and lowered our weighted average interest expense. In particular:

•On April 13, 2004, our wholly owned, newly formed subsidiary, NTL Cable PLC, issued £375 million aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million aggregate principal amount of 8.75% senior notes due 2014 and $100 million aggregate principal amount of floating rate senior notes due 2012, together referred to as the Senior Notes. The Senior Notes were offered and sold under Rule 144A and Regulation S.

•Also, on April 13, 2004, we entered into a new fully underwritten £2,425 million senior secured credit facility, which we refer to as our new credit facility, which includes a £250 million revolving tranche.  On April 14, 2004 we drew down £2,175 million of

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our new credit facility, which, together with some of the proceeds from the issuance of the new notes and cash on hand, we used to repay our then-existing senior credit facility.

•The remaining proceeds from the notes offering, together with cash on hand, were used on May 13, 2004 to redeem the 10% Senior Sterling Notes due 2008 and 9 ¹/₈% Senior Notes due 2008 of Diamond, a wholly owned subsidiary of Diamond Cable Communications Limited, which we refer to as the Diamond notes, redeem the 11.2% Senior Discount Debentures due 2007 of NTL Triangle, which we refer to as the Triangle debentures, and pay transaction costs.

The redemption of the Diamond notes and the Triangle debentures on May 13, 2004, as well as making Diamond Cable Communications Limited and its direct or indirect subsidiaries wholly owned subsidiaries of NTL Cable PLC as required by the terms of the indenture governing the notes and our new credit facility, will provide us with additional flexibility to engage in intercompany transfer of funds and other transactions. The terms of the indenture governing the Senior Notes and our new credit facility will permit us to operate our ntl: broadcast segment as a stand alone business not subject to the restrictive covenants contained in the indenture and our new credit facility subject to satisfaction of certain defined requirements.

The agreements governing the Senior Notes and our new credit facility significantly restrict and, in some cases, prohibit our ability and the ability of most of our subsidiaries to:

•incur or guarantee additional indebtedness;

•pay dividends or make other distributions, or redeem or repurchase equity interests or subordinated obligations;

•make investments;

•sell assets, including the capital stock of subsidiaries;

•enter into sale/leaseback transactions;

•create liens;

•enter into agreements that restrict the restricted subsidiaries’ ability to pay dividends, transfer assets or make intercompany loans;

•merge or consolidate or transfer all or substantially all of its assets; and

•enter into transactions with affiliates.

Our business is capital intensive, we are highly leveraged, and we have historically incurred operating losses and negative cash flow, partly as a result of our construction costs, operating expenditures and interest costs. We require significant amounts of capital to connect customers to our network, expand and upgrade our network, offer new services and integrate our billing systems and customer databases.  For the period of July 1, 2004 through June 30, 2005, we expect to spend between £330 million and £370 million, or between $600 million and $670 million, on acquiring fixed assets. We must also regularly service interest payments with cash flows from operations. Our ability to sustain operations, meet financial covenants under our indebtedness, and make required payments on our indebtedness could be impaired if we are unable to maintain or achieve various financial performance measures.

Our ability to service our capital needs, to service our obligations under our indebtedness and to fund our ongoing operations will depend upon our ability to generate cash. For the six months ended June 30, 2004, our cash reduced by $612.0 million, however this was principally because of the refinancing transaction in April 2004 and repayments of debt in the first quarter of 2004.

Although we expect to generate positive cash flow in the future, we cannot assure you that this will be the case. We believe that our cash on hand, together with cash from operations and, if required, drawdowns under the £250 million revolving tranche of our new credit facility, will be sufficient for our cash requirements through at least June 30, 2005. However, our cash requirements after June 30, 2005, may exceed these sources of cash. This may require that we obtain additional financing in excess of the financing incurred in the refinancing transaction. We may not be able to obtain financing at all, or on favorable terms, or we may be contractually prevented by the terms of the Senior Notes or our new credit facility from incurring additional indebtedness.

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We are a holding company with no independent operations or significant assets other than our investments in our subsidiaries. As a result, we will 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.

Our debt agreements and the debt agreements of some of our subsidiaries contain restrictions on our ability to transfer cash between groups of our subsidiaries. As a result of these restrictions, although our overall liquidity may be sufficient to satisfy our obligations, we may be limited by covenants in some of our debt agreements from transferring cash to other subsidiaries that might require funds. In addition, cross-default provisions in our other indebtedness may be triggered if we default on any of these debt agreements.

Derivative Instruments and Hedging Activities

In the refinancing transaction, we incurred obligations in a combination of U.S. dollars, euros and pound sterling at fixed and variable interest rates.  As a result we are exposed to variability in our cash flows and earnings resulting from changes in foreign currency exchange rates and interest rates.

We have entered into a number of derivative instruments with a number of counter-parties to manage our exposures to changes in interest rates and foreign currency exchange rates.  The derivative instruments consist of interest rate swaps, cross-currency interest rate swaps and foreign currency forward contracts.

Interest rate swaps

We have entered into a number of interest rate swaps to hedge the variability in future interest payments on the new senior credit facility which accrues interest at variable rates based on LIBOR.  The interest rate swaps allow us to receive interest based on LIBOR in exchange for payments of interest at fixed rates. The net settlement under the interest rate swaps is included within interest expense.

We have designated the interest rate swaps as cash flow hedges under SFAS No. 133 because they hedge against changes in LIBOR.  The interest rate swaps are recognized as either assets or liabilities and measured at fair value. Changes in the fair value are recorded within other comprehensive income (loss).

Cross-currency interest rate swaps

We have entered into a number of cross-currency interest rate swaps to hedge the variability in the pound sterling value of the interest payments on the 8.75% Senior Notes due 2014 denominated in U.S. dollars. Under the cross-currency swaps we receive interest in U.S. dollars at a rate of 8.75% and pay interest in pound sterling at a rate of 9.42%. The net settlement under the cross-currency swap is included within interest expense.

We have designated the cross-currency swaps as cash flow hedges of the changes in the pound sterling value of the interest payments on the Senior Notes that result from changes in the U.S. dollar pound sterling exchange rate.  The cross-currency swaps are recognized as either assets or liabilities and measured at fair value. Changes in the fair value are recorded within other comprehensive income (loss).

Foreign currency forward contracts

We have entered into a number of forward contracts to purchase a total of $318.75 million maturing on April 14, 2009.  The contracts hedge the variability in the pound sterling value of the principal obligation of the 8.75% Senior Notes resulting from changes in the U.S. dollar pound sterling exchange rate.

The forward contracts have not been designated as hedges and therefore do not qualify for hedge accounting under SFAS No. 133. The forward contracts are still recognized as either assets or liabilities and measured at fair value but changes in the fair value are reported in the income statement.  However, the forward contracts do not subject us to material volatility in our earnings and cash flows because changes in the fair value directionally and partially mitigate the gains or losses on the translation of the U.S. dollar denominated Senior Notes into pounds sterling.

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Description of Outstanding Indebtedness

The terms of the significant notes and credit facilities issued by our subsidiaries as at June 30, 2004 are summarized below.

Senior Notes

•9.75% Senior Notes due April 15, 2014 – The principal amount at maturity is £375 million.  Interest is payable semi-annually on April 15 and October 15 commencing October 15, 2004.

•8.75% Senior Notes due April 15, 2014 – The principal amount at maturity is $425 million.  Interest is payable semi-annually on April 15 and October 15 commencing October 15, 2004.

•8.75% Senior Notes due April 15, 2014 – The principal amount at maturity is €225 million.  Interest is payable semi-annually on April 15 and October 15 commencing October 15, 2004.

•Floating Rate Senior Notes due October 15, 2012 – The principal amount at maturity is $100 million.  The interest rate on the floating rate senior notes is the three-month LIBOR plus 5.00%.  Interest is payable quarterly on January 15, April 15, July 15 and October 15, commencing July 15, 2004.

Senior Credit Facility

•The principal amount outstanding is $3,949.2 million.  Our senior credit facility comprises a term facility denominated in a combination of pound sterling, euros and U.S. dollars totaling $3,949.2 million, and a revolving facility of £250 million, or $453.2 million.  The term facility was fully drawn and the revolving facility was undrawn at June 30, 2004.

•Our senior credit facility bears interest at LIBOR plus mandatory costs plus a margin rate.  The term facility and the revolving facility have different margin rates.  At June 30, 2004, the effective average annual interest rate on the term facility was 6.76%. Interest is payable at least semi-annually.

•The principal amount outstanding under the term facility is repayable by semi-annual installments beginning September 2004.

•The senior credit facility is secured over most of our assets.

•We are subject to financial maintenance tests under our senior credit facility, including a test of liquidity, coverage and leverage ratios applied to us and some of our subsidiaries. As at June 30, 2004, we were in compliance with these covenants.

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Contractual Obligations and Commercial Commitments

The following tables include aggregate information about our contractual obligations as of June 30, 2004, and the periods in which payments are due (in millions).

			Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-Term Debt	$	5,431.1	$	69.3	$	444.8	$	875.0	$	4,042.0
Capital Lease Obligations	220.7		8.4		15.9		14.8		181.6
Operating Leases	757.8		100.8		159.9		132.1		365.0
Unconditional Purchase Obligations (1)	426.3		318.5		107.8		—		—
Other Long-Term Obligations	—		—		—		—		—
Total Contractual Cash Obligations	$	6,835.9	$	497.0	$	728.4	$	1,021.9	$	4,588.6

(1)These obligations include our obligations under our agreement with IBM. After May 2006, our contract with IBM is terminable upon six months’ notice. After that time it becomes a conditional obligation. Accordingly, we have not included any payments after this date.

The following table includes information about our commercial commitments as of June 30, 2004. Commercial commitments are items that we could be obligated to pay in the future. They are not required to be included in the consolidated balance sheet (in millions).

			Amount of Commitment Expiration per Period
Other Commercial Commitments	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Guarantees	$	33.2	$	0.7	$	17.5	$	—	$	15.0
Lines of Credit	—		—		—		—		—
Standby Letters of Credit	—		—		—		—		—
Standby Repurchase Obligations	—		—		—		—		—
Other Commercial Commitments	—		—		—		—		—
Total Commercial Commitments	$	33.2	$	0.7	$	17.5	$	—	$	15.0

Guarantees relate to performance bonds provided by banks on our behalf as part of our contractual obligations. The fair value of the guarantees has been calculated by reference to the monetary value of each bond.

Related Party Transactions

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

Stockholder Participation

Some of our significant stockholders were holders of the Diamond notes and the NTL Triangle debentures which were redeemed on May 13, 2004 in connection with the refinancing transaction. Some of these stockholders or other of our significant stockholders, including W.R. Huff Asset Management, which is a significant participant in the market for non-investment grade debt securities, acquired a substantial quantity of the notes issued in the refinancing transaction.

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Advisory Fees

In connection with our rights offering in November 2003, we entered into separate participating purchase agreements with each of W.R. Huff Asset Management and Franklin Mutual Advisers. Pursuant to the agreements, and for their participation in the rights offering, some affiliates and managed accounts for which W.R. Huff Asset Management acts as an investment adviser were paid a fee of $5.3 million on March 24, 2004 and some funds for which Franklin Mutual Advisers acts as agent or investment adviser were paid a fee of $3.1 million on November 24, 2003 and $0.3 million on March 17, 2004.

In consideration for financial and business advisory services provided to us in connection with our refinancing transaction completed in April 2004, W.R. Huff Asset Management was paid $7.5 million on April 22, 2004. Our board also granted to each of Eric Koza and Karim Samii, employees of W.R. Huff Asset Management, the right to receive 20,000 restricted shares of our common stock under the Amended and Restated 2004 NTL Stock Incentive Plan. This plan was approved by our stockholders at our annual meeting of stockholders in May 2004. The restricted stock award was made in consideration of financial and business advisory services provided to us by Messrs. Koza and Samii. Shares authorized under the Amended and Restated 2004 NTL Stock Incentive Plan, including those granted to Messrs. Koza and Samii, were registered under a registration statement on Form S-8 that we filed with the SEC on May 6, 2004.

Use of Non-U.S. GAAP Financial Measures

The presentation of this supplemental information is not meant to be considered in isolation or as a substitute for other measures of financial performance reported in accordance with U.S. GAAP. These non-U.S. GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our U.S. GAAP results and the following reconciliations to corresponding U.S. GAAP financial measures, allow a better understanding of factors and trends affecting our business.

Combined segment profit is not a financial measure recognized under U.S. GAAP. Combined segment profit represents our combined earnings before interest, taxes, depreciation and amortization, other charges, share of income from equity investments, loss on extinguishment of debt and foreign currency transaction gains (losses), for each of our reportable business segments. This measure is most directly comparable to the U.S. GAAP financial measure net income (loss). Some of the significant limitations associated with the use of combined segment profit as compared with net income (loss) are that combined segment profit does not consider the amount of required reinvestment in depreciable fixed assets, interest expense, gains or losses on foreign currency transactions, income tax expense or benefit and similar items on our results of operations. Combined segment profit also ignores the impact on our results of operations of items that management believes are not characteristic of our underlying business operations. We compensate for these limitations by using combined segment profit to measure profit or loss on a combined segmental basis and not to determine our consolidated results of operations.

We believe combined segment profit is helpful for understanding our performance and assessing our prospects for the future, and that it provides useful supplemental information to investors. In particular, this non-U.S. GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our U.S. GAAP results and the reconciliations to net income (loss), provide a more complete understanding of factors and trends affecting our business. Because non-U.S. GAAP financial measures are not standardized, it may not be possible to compare combined segment profit (loss) with other companies’ non-U.S. GAAP financial measures that have the same or similar names. The presentation of this supplemental information is not meant to be considered in isolation or as a substitute for net income (loss) or other measures of financial performance reported in accordance with U.S. GAAP.

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Reconciliation of

Combined Segment Profit to U.S. GAAP net loss

(in millions)

	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Combined segment profit	$	365.7		$	279.4		$	724.2		$	529.8
Reconciling items:
Other charges	(26.9		)	(20.9		)	(27.8		)	(23.8		)
Depreciation and amortization	(351.5		)	(341.1		)	(705.1		)	(675.3		)
Interest income and other, net	6.5			3.2			9.5			5.9
Interest expense	(127.3		)	(186.9		)	(265.2		)	(363.4		)
Loss on extinguishment of debt	(290.1		)	—			(290.1		)	—
Share of income from equity investments	1.0			(1.6		)	2.2			(1.5		)
Foreign currency transaction (losses) gains	(25.3		)	21.0			(12.4		)	17.6
Income tax expense	(0.6		)	(12.6		)	(4.1		)	(28.8		)
Subtotal	(814.2		)	(538.9		)	(1,293.0		)	(1,069.3		)
Net (loss)	$	(448.5	)	$	(259.5	)	$	(568.8	)	$	(539.5	)

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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, like foreign currency exchange and interest rates. As some of our indebtedness accrues interest at variable rates, we have exposure to volatility in future cash flows and earnings associated with variable interest rate payments.

Also, a substantial portion of our revenues and operating costs are earned and paid in pound sterling and, to a lesser extent euros, but we pay interest and principal obligations on some of our indebtedness in U.S. dollars. As of June 30, 2004, $920.2 million, or 16.7% of our long-term debt, was in U.S. dollars. As a result, we have exposure to volatility in future cash flows and earnings associated with changes in foreign exchange rates on payments of principal and interest on a portion of our indebtedness.

To mitigate the risk from these exposures, we have implemented a cash flow hedging program.  The objective of this program is to reduce the volatility of our cash flows and earnings caused by changes in underlying rates. To achieve this objective we have entered into a number of derivative instruments.  The derivative instruments utilized comprise interest rate swaps, cross-currency interest rate swaps and foreign currency forward contracts. We do not enter into derivative instruments for trading or speculative purposes. See Note 7 – Derivative Instruments and Hedging Activities and Management’s Discussion and Analysis of Financial Condition and Results of Operations – Derivative Instruments and Hedging Activities.

Because the revenues and expenses from our principal operations are denominated primarily in pounds sterling, but we report our financial results in U.S. dollars, our financial results are also impacted by currency fluctuations, which are unrelated to our underlying results of operations. The aggregate potential increase in our net loss from a hypothetical one percent fall in the U.S. dollar to pound sterling exchange rate would have been approximately $4.5 million for the three months ended June 30, 2004.

The fair market value of long-term fixed interest rate debt and the amount of future interest payments on variable interest rate debt are subject to interest rate risk.  The following table provides information as of June 30, 2004, about our long-term fixed and variable interest rate debt by maturity that are sensitive to changes in interest rates and foreign currency exchange rates (in millions, except percentages).

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	Six months ended December 31,			Year ended December 31,																		Fair Value June 30,
	2004			2005			2006			2007			2008			Thereafter			Total			2004
Long-term debt including current portion
US Dollars
Fixed rate	—			—			—			—			—			$	425.0		$	425.0		$	439.9
Average interest rate																8.75		%
Pound Sterling
Fixed rate	—			—			—			—			—			£	375.0		£	375.0		£			358.6
Average interest rate																9.75		%
Average forward exchange rate																1.7914
Euro
Fixed rate	—			—			—			—			—			€	225.0		€	225.0		€			220.2
Average interest rate																8.75		%
Average forward exchange rate																1.3209
US Dollars
Variable Rate	—			—			—			—			—			$	100.0		$	100.0		$		100.0
Average interest rate																LIBOR
																plus 5%
Pound Sterling
Variable Rate	£	8.0		£	60.0		£	119.6		£	190.6		£	259.4		£	637.4		£		637.4	£			637.4
Average interest rate	LIBOR			LIBOR			LIBOR			LIBOR			LIBOR			LIBOR
	plus 2.25		%	plus 2.25		%	plus 2.25		%	plus 2.25		%	plus 2.25		%	plus 2.25		%
Average forward exchange rate	1.7869			1.7516			1.7375			1.7255			1.7251			1.7423
Pound Sterling
Variable Rate	—			—			—			—			—			£	585.0		£	585.0		£			585.0
Average interest rate																LIBOR
																plus 3.00		%
Average forward exchange rate																1.7554
Euro
Variable Rate	—			—			—			—			—			€	151.0		€	151.0		€			151.0
Average interest rate																LIBOR
																plus 3.00		%
Average forward exchange rate																1.2961
US Dollars
Variable Rate	—			—			—			—			—			$	395.2		$	395.2		$		395.2
Average interest rate																LIBOR
																plus 3.00		%

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ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures.  Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the period covered by this report.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file under the Exchange Act.

(b)Changes in Internal Control Over Financial Reporting.  Except for the matters described below, there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are currently consolidating a number of our billing systems as noted in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Integration of Billing Systems. As we complete the integration, we may temporarily experience periods of ineffectiveness over the internal controls over financial reporting relating to these systems.

46

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NTL Europe, Inc and some of its former officers, including Barclay Knapp, our former president and chief executive officer, have been named as defendants in a number of purported securities class action lawsuits and one individual action brought by former NTL Europe, Inc stockholders. The complaints in those cases generally allege that the defendants failed to disclose NTL Europe’s financial condition, finances and future prospects accurately in press releases and other communications with investors prior to filing its Chapter 11 case in federal court. The defendants filed motions to dismiss the actions and, on July 31, 2003, the court entered an order dismissing the complaint in the individual action without prejudice to filing an amended complaint and deferred its decision on the complaint in the class action lawsuits. On August 20, 2003, the plaintiff in the individual action filed an amended complaint. The defendants filed motions to dismiss the amended complaint in the individual actions. Accordingly the motions to dismiss all actions are now currently pending. 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 personal monetary liability in these actions as a result of the completion of the Plan, the case remains pending against NTL Europe and the individuals named as defendants. We have not been named as a defendant. The cases have been consolidated for all purposes before the U.S. District Court for the Southern District of New York. We may be liable for indemnification claims from some of our officers and directors, including Mr. Knapp, to the extent our insurance coverage is insufficient.

The two separate proceedings that were initiated in the U.S. Bankruptcy Court for the Southern District of New York by Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P. requesting that we be held liable for alleged damages attributable to each of their trading in our “when-issued” common stock prior to the completion of the Plan have been voluntarily dismissed by the plaintiffs in June 2003 without prejudice to recommencement in state court where related litigation against third parties is pending. The third parties are primarily the counterparties to the various trades made by Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P.

On March 16, 2004, in an action to which we are not a party, a state court in New York granted the summary judgment motion of a U.S. broker dealer to require that “when-issued” trading in our common stock prior to the completion of the Plan be settled on an adjusted basis by the parties to the action in a manner to be set forth in an order of the state court, which has not yet been entered. On March 30, 2004, Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P. filed a complaint in the Supreme Court of the State of New York seeking to hold us and PTV, Inc liable for alleged damages attributable to some of their trading in our common stock on a “when-issued” basis prior to our reorganization under Chapter 11 in the event that the settlement of trades is required on an unadjusted basis. On April 30, 2004, the plaintiffs agreed to adjourn the case until there has been a final determination in the aforementioned state court action by the U.S. broker dealer.

We are involved in various 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 operation or cash flow.

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ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our annual meeting of stockholders was held on May 6, 2004. The following nominees were elected as directors, each to hold office for a period of three years, by the vote set forth below:

Nominee	For	Withheld
Jeffrey D. Benjamin	75,026,030	2,453,214
David Elstein	75,037,319	2,441,925

The following directors have terms continuing after the annual meeting of stockholders: James F. Mooney, Edwin M. Banks, Simon P. Duffy, Charles K. Gallagher, William R. Huff and George R. Zoffinger.

The appointment of Ernst & Young LLP as our independent auditor for the year ended December 31, 2004 was ratified by the vote set forth below:

	Votes
For	76,139,838
Against	1,339,156
Withheld	—
Abstained	250
Broker non-votes	—

Approval of the amendment and restatement of the NTL 2003 Stock Option Plan.

	Votes
For	45,516,296
Against	21,601,858
Withheld	—
Abstained	4,977
Broker non-votes	—

Adoption of share issuance feature of the NTL Group 2004 Bonus Scheme.

	Votes
For	65,946,256
Against	1,171,969
Withheld	—
Abstained	4,906
Broker non-votes	—

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Adoption of the NTL Incorpoarted Sharesave Plan.

	Votes
For	60,651,579
Against	6,463,878
Withheld	—
Abstained	7,674
Broker non-votes	—

ITEM 5.  OTHER INFORMATION

Effective June 15, 2004, we appointed Bryan Hall as General Counsel and Company Secretary. As our general counsel, Mr Hall is responsible for managing our in-house lawyers and outside counsel on all legal issues and affairs involving us, as well as providing legal advice to us and our board of directors.

Mr Hall has over 15 years experience as a corporate lawyer in New York.  Most recently, Mr Hall was a partner in the corporate department at Fried, Frank, Harris, Shriver & Jacobson LLP in New York, specializing in public and private acquisitions and acquisition financings.  He joined Fried Frank in 1997 as an associate attorney before becoming a partner in 2000.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)Exhibits.

3.2	Amended and Restated By-Laws of NTL Incorporated (as of May 6, 2004)
10.1	Employment Agreement, dated as of May 28, 2004, between NTL Incorporated and Bryan Hall.
31.1	Certification of CEO pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certification of CFO pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32	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 June 30, 2004, we filed or furnished the following reports on Form 8-K:

•April 5, 2004, relating to the pricing of the offering by our wholly owned, newly formed subsidiary, NTL Cable PLC, of senior notes.

•April 7, 2004, relating to consolidation over the next 18 months of our 13 customer service call centers.

•April 16, 2004, relating to the closing of the offering by our wholly owned, newly formed subsidiary, NTL Cable PLC, of senior notes and the entering into of a new of £2.425 billion senior credit facility at ntl Investment Holdings Limited.

•April 20, 2004, relating to entering into a £2.425 billion Senior Facilities Agreement, a High Yield Intercreditor Deed and an Indenture.

•April 22, 2004, relating to NTL (Triangle) LLC, an indirect wholly owned subsidiary of NTL Incorporated, issuing to The Bank of New York, as Trustee, a Notice of Redemption of the 11.20% Senior Discount Debentures Due 2007 and Diamond Holdings PLC, an indirect wholly owned subsidiary of NTL Incorporated, issuing to The Bank of New York, as Trustee, a Notice of Redemption of the 10% Senior Notes Due February 1, 2008 and the 9 1/8% Senior Notes Due February 1, 2008.

•May 5, 2004, relating to announcing the results for the three months ended March 31, 2004.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:  August 6, 2004	By:	/s/  Simon P. Duffy
		Simon P. Duffy
		Chief Executive Officer, President and Director
Date:  August 6, 2004	By:	/s/  Scott E. Schubert
		Scott E. Schubert
		Chief Financial Officer

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EX-3.2

Exhibit 3.2

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; provided however that the Corporation shall maintain an office in the United States as its principal place of business.

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

2

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

4

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.

5

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

6

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

7

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

8

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

9

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

10

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)

11

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.  A majority of the Board of Directors shall consist of members who are resident and primarily working in the United States.

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.  A majority of the Board of Directors shall consist of members who are resident and primarily working in the United States.

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

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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; provided that any meeting at which decisions are to be taken shall be held in the United States.   Meetings shall be held at intervals of no less than every three months.  Subject to the foregoing, regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to 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.

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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 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 (66²/₃%) 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 being physically present in the United States 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.

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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 a majority of the members of the Board of Directors or committee, as the case may be, is physically present in the United States at the time such member consents and 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.

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; provided that such person must be physically present in the United States to count towards a quorum .

Section 10.  Committees.  The Board of Directors shall have as permanent committees an Executive Committee, Audit Committee and Compensation Committee, the operation of which Committees shall be governed by their respective Charters.  A majority of each Committee shall consist of members who are resident and primarily working in the United States  No members of such Committees may be removed from such Committees

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except by unanimous vote of the full Board of Directors.  The Board of Directors also may designate one or more other committees, each such 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 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

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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 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

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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 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

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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.

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

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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 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,

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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 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.

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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.

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

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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 (66²/₃%) 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.

Amended and Restated as of: May 6, 2004

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of the 28th day of May, 2004, by and between NTL Incorporated, a Delaware corporation (the “Company”), and Bryan H. Hall (the “Executive”).

WHEREAS, the Company wishes to employ the Executive as General Counsel of the Company, effective as of June 15, 2004 (the “Effective Date”);

WHEREAS the parties intend that (i) the Executive will reside in the United Kingdom and perform duties on behalf of the consolidated enterprise as its General Counsel while present in the United Kingdom, particularly with regard to the UK business, and (ii) he will travel to the United States where he will perform duties on behalf of the Company as its General Counsel, in each case upon the terms and conditions of this Agreement; and

WHEREAS, the Executive wishes to accept such employment and to render services to the Company on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1.Effectiveness.  This Agreement shall become effective as of the Effective Date.

2.Employment Term.

(a)The term of the Executive’s employment pursuant to this Agreement (the “Employment Term”) shall commence as of the Effective Date and shall end on December 31, 2006, unless the Employment Term terminates earlier pursuant to

Section 7 of this Agreement.  The Employment Term may be extended by mutual agreement of the Company and the Executive.

(b)Title; Duties.  During the Employment Term, the Executive shall serve the Company as its General Counsel and, in such capacity, shall perform such duties, services and responsibilities as are commensurate with such position.  In his capacity as General Counsel, the Executive shall report to the Chief Executive Officer of the Company.  During the Employment Term, the Executive shall be based in the United Kingdom but shall undertake such overseas travel as is necessary for the proper performance of his duties hereunder.

During the Employment Term, the Executive shall devote substantially all of his time to the performance of the Executive’s duties hereunder and will not, without the prior written approval of the Chief Executive Officer of the Company, engage in any other business activity which interferes in any material respect with the performance of the Executive’s duties hereunder or which is in violation of written policies established from time to time by the Company.  Nothing contained in this Agreement shall preclude the Executive from devoting a reasonable amount of time and attention during the Employment Term to (A) continuing legal education, including, without limitation, any and all continuing legal education efforts as may be required to remain in good standing with the bar of the State of New York (which may include attendance at seminars and other similar events) and (B) (i) serving, with the prior approval of the Board of Directors of the Company (the “Board”), as a non-executive director, trustee or member of a committee of any for-profit organizations;

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(ii) engaging in charitable and community activities (including pro bono legal services); and (iii) managing personal and family investments and affairs, so long as any activities of the Executive which are within the scope of clauses (A) and (B) (i), (ii) and (iii) of this Section 2(b) do not interfere in any material respect with the performance of the Executive’s duties hereunder.

3.Monetary Remuneration.

(a)Base Salary.  During the Employment Term, in consideration of the performance by the Executive of the Executive’s obligations hereunder to the Company and its parents, subsidiaries, associated and affiliated companies and joint ventures (collectively, the “Company Affiliated Group”) in any capacity (including any services as an officer, director, employee, member of any Board committee or management committee or otherwise), the Company shall cause to be paid to the Executive an annual salary of £300,000 (the “Base Salary”), which shall accrue on a daily basis.  The Base Salary shall be payable in accordance with normal payroll practices in effect from time to time for senior management generally; provided that the Executive may designate at one time each year a percentage of cash compensation, not yet paid, to be paid in U.S. Dollars, with the exchange rate set on the date that such designation is made by reference to the noon buying rate as quoted by the Federal Reserve Bank of New York.  The Executive shall receive no additional compensation for services that he provides to the Company Affiliated Group other than as set forth herein.

(b)Annual Cash Bonus.  During each fiscal year of the Company that the Employment Term is in effect, the Executive shall be eligible to earn a cash bonus in

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the sole discretion of the Board of (at target) 75%, but subject to a maximum of 150%, of Base Salary (prorated for any partial fiscal year) (the “Annual Cash Bonus”).  In addition, the Company shall cause the Executive to participate in the NTL Group Long Term Incentive Plan.

(c)Expatriate Package.  During the Employment Term and for any period during which the Executive is required by the Company to live in the United Kingdom, the Executive and his family shall have the right to receive the benefits of the Company’s standard expatriate benefits package (as applied to comparable United States expatriate employees of the Company), but in any event such benefits will be consistent with the terms set forth in Appendix A hereto.  Tax equalization shall be consistent with existing Company Tax Equalization Policy, attached as Appendix B hereto, and incorporated by reference.

4.Equity-Based Compensation.

During the Employment Term, the Executive shall be eligible to receive options to purchase common stock of the Company in addition to the options described in Appendix C at such exercise prices, schedules as to exercisability and other terms and conditions as determined in the sole discretion of the Board or its Compensation Committee under the Amended and Restated NTL 2004 Stock Incentive Plan or successor plan.

5.Benefits.

(a)During the Employment Term, the Executive shall be entitled to participate in all of the employee benefit plans, programs, policies and arrangements

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(including fringe benefit and executive perquisite programs and policies) made available by the Company Affiliate Group to, or for the benefit of, its executive officers in accordance with the terms thereof as they may be in effect from time to time, in so far as such benefits are capable of being provided in the United Kingdom.

(b)Reimbursement of Expenses.  During the Employment Term, the Company shall cause the Executive to be reimbursed for all reasonable business expenses incurred by the Executive in carrying out the Executive’s duties, services and responsibilities under this Agreement, and reasonable expenses incurred in connection with maintaining admission to practice in the State of New York, so long as the Executive complies with the general procedures of the Company Affiliated Group for submission of expense reports, receipts or similar documentation of such expenses applicable to senior management generally.

6.Vacations.  For each whole and partial calendar year during the Employment Term, the Executive shall be entitled in addition to public and statutory holidays to 25 days of paid vacation (prorated for any partial calendar year, except that for calendar year 2004, the vacation entitlement shall be 15 days), to be credited and taken in accordance with the Company’s policy as in effect from time to time for its similarly situated executives.

7.Termination; Severance.

(a)Termination of Employment.  The Company may terminate the employment of the Executive in a Termination Without Cause upon 30 days’ written notice to the Executive.  The Company may (at its discretion) at any time following the

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giving of such notice (but not exceeding the length of the notice given) cease to provide work for the Executive in which event during such notice period the other provisions of this Agreement shall continue to have full force and effect but the Executive shall not be entitled to access to any premises of the Company or any member of the Company Affiliated Group.  In addition, the employment of the Executive shall automatically terminate as of the date on which the Executive dies or is Disabled.  For the purposes of this Agreement, the Executive shall be “Disabled” as of any date if, as of such date, the Executive has been unable, due to physical or mental incapacity, to substantially perform the Executive’s duties, services and responsibilities hereunder either for a period of at least 180 consecutive days or for at least 270 days in any consecutive 365-day period, whichever may be applicable.  Upon termination of the Executive’s employment during the Employment Term because the Executive dies or is Disabled, the Company shall cause the Executive (or the Executive’s estate, if applicable) to be provided with death or disability benefits (as applicable) pursuant to the plans, programs, policies and arrangements of the Company Affiliated Group as are then in effect with respect to executive officers.  In addition, upon any termination of the Executive’s employment during the Employment Term, the Company shall cause the Executive to be paid any earned but unpaid portion of the Base Salary and Annual Cash Bonus.  Immediately following termination of the Executive’s employment for any reason, the Employment Term shall terminate.

(b)Termination Without Cause; Constructive Termination Without Cause.  Upon a Termination Without Cause or a Constructive Termination Without

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Cause, the Company shall, as soon as practicable following the Executive’s execution and delivery to the Company of the general release of claims set forth in Section 7(f) and, following the expiration of any applicable revocation period, cause the Executive to be paid a lump-sum severance payment of cash equal to the product of the Base Salary times 3.

(c)Termination upon Non-Renewal of the Employment Term.  Unless the parties hereto agree otherwise, the Employment Term and the Executive’s employment with the Company shall end on December 31, 2006.  In connection with such termination of employment, the Company shall, as soon as practicable following the Executive’s execution and delivery to the Company of the general release set forth in Section 7(f) and following the expiration of any applicable revocation period, cause the Executive to be paid a lump-sum severance payment of cash equal to one-half of the Base Salary.  In the event that the Executive has not obtained subsequent employment (as a common-law employee, as an independent contractor or in any other capacity) by the end of the six-month period following the date of termination pursuant to this Section 7(c), then, during each of the six calendar months after such six-month period, the Company shall cause the Executive to be paid additional severance pay equal to one-twelfth of the Base Salary; provided, that the right to additional severance pay pursuant to this sentence shall terminate as to any unpaid portion of such severance pay when the Executive first obtains any such subsequent employment.  In addition, in connection with a termination of employment pursuant to this Section 7(c), the Company shall cause the Executive to be paid a full annual bonus for the Company’s 2006 fiscal year, determined based on

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actual satisfaction of any applicable performance goals during such fiscal year, with such bonus to be paid promptly after the determination of the amount thereof and without application of any mandatory deferral provisions or continued employment requirements.

(d)Upon a termination of the Executive’s employment during the Employment Term by the Company for Cause, or upon termination by the Executive with 30 days’ written notice given to the Company (other than a Constructive Termination Without Cause), the Executive shall be entitled to earned but unpaid Base Salary and benefits through the date of termination, and the Executive shall not be entitled to any other payments or benefits.

(e)Upon any termination of the Executive’s employment during the Employment Term other than by the Company for Cause, the Executive and his family shall be entitled to continued medical benefits under (and in accordance with the terms of) the Company’s benefit plans for 1 year from the date of termination.

For purposes of this Agreement:

(i)A “Constructive Termination Without Cause” means a termination of the Executive’s employment during the Employment Term by the Executive following the occurrence of any of the following events without the Executive’s prior consent: (A) failure by the Company to continue the Executive as the General Counsel (excluding a promotion); (B) any material diminution in the Executive’s working conditions or authority, responsibilities or authorities; (C) assignment to the Executive of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his position as set forth herein; (D) any materially

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adverse change in the reporting structure applicable to the Executive (but not including a change in the person filling the position to which the Executive reports); (E) the failure of the Company to maintain commercially reasonable directors’ and officers’ liability insurance; or (F) a Change in Control occurs and the Executive is terminated in a Termination Without Cause during the period commencing on the date of the Change in Control and ending on the first anniversary thereof.  For purposes of this Agreement, a “Change in Control” is defined in Appendix D attached hereto, and incorporated by reference.  The Executive shall give the Company 10 days’ notice of the Executive’s intention to terminate the Executive’s employment and claim that a Constructive Termination Without Cause (as defined in (A), (B), (C), (D), (E) or (F) above) has occurred, and such notice shall describe the facts and circumstances in support of such claim in reasonable detail.  The Company shall have 10 days thereafter to cure such facts and circumstances if possible.

(ii)A “Termination Without Cause” means a termination of the Executive’s employment during the Employment Term by the Company other than for Cause.

(iii)“Cause” means (x) the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or to any crime involving fraud, embezzlement or breach of trust; (y) the willful or continued failure of the Executive to perform the Executive’s duties hereunder (other than as a result of physical or mental illness); or (z) in carrying out the Executive’s duties hereunder, the Executive has engaged in conduct that constitutes gross neglect or willful misconduct, unless the Executive believed in

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good faith that such conduct was in, or not opposed to, the best interests of the Company and each member of the Company Affiliated Group.  The Company shall give the Executive 10 days’ notice of the Company’s intention to terminate the Executive’s employment and claim that facts and circumstances constituting Cause exist, and such notice shall describe the facts and circumstances in support of such claim.  The Executive shall have 10 days thereafter to cure such facts and circumstances if possible.  If the Board reasonably concludes that the Executive has not cured such facts or circumstances within such time, Cause shall not be deemed to have been established unless and until the Executive has received a hearing before the Board (if promptly requested by the Executive) and a majority of the Board within 10 days of the date of such hearing (if so requested) reasonably confirms the existence of Cause and the termination of the Executive therefor.

(f)Release; Full Satisfaction.  Notwithstanding any other provision of this Agreement, no severance pay shall become payable under this Agreement unless and until the Executive and the Company execute the general release of claims in form attached as Appendix E, including where relevant a release of any statutory claims, and such release has become irrevocable; provided, that the Executive shall not be required to release any indemnification rights, rights to benefits, and any accrued rights under this Agreement.  The payments to be provided to the Executive pursuant to this Section 7 upon termination of the Executive’s employment shall constitute the exclusive payments in the nature of severance or termination pay or salary continuation which shall be due to the Executive upon a termination of employment and shall be in lieu of any other such

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payments under any severance or termination plan, program, policy or other arrangement which has heretofore been or shall hereafter be established by any member of the Company Affiliated Group.

(g)Resignation.  Upon termination of the Executive’s employment for any reason, the Executive shall be deemed to have resigned from all positions with any member of the Company Affiliated Group, as applicable.

(h)Cooperation Following Termination.  Following termination of the Executive’s employment for any reason, the Executive agrees to reasonably cooperate with the Company upon the reasonable request of the Board and to be reasonably available to the Company with respect to matters arising out of the Executive’s services to any member of the Company Affiliated Group.  The Company shall cause the Executive to be reimbursed for, or, at the Executive’s request, cause the Executive to be advanced, expenses reasonably incurred in connection with such matters.

8.Executive’s Representation.  The Executive represents to the Company that the Executive’s execution and performance of this Agreement does not violate any agreement or obligation (whether or not written) that the Executive has with or to any person or entity including, without limitation, any prior employer.

9.Executive’s Covenants.

(a)Confidentiality.  The Executive agrees and understands that the Executive has been, and in the Executive’s position with the Company the Executive will be, exposed to and receive information relating to the confidential affairs of the Company Affiliated Group, including, without limitation, technical information, business and

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marketing plans, strategies, customer (or potential customer) information, other information concerning the products, promotions, development, financing, pricing, technology, inventions, expansion plans, business policies and practices of the Company Affiliated Group, whether or not reduced to tangible form, and other forms of information considered by the Company Affiliated Group to be confidential and in the nature of trade secrets.  The Executive will not knowingly disclose such information, either directly or indirectly, to any person or entity outside the Company Affiliated Group without the prior written consent of the Company; provided, however, that (i) the Executive shall have no obligation under this Section 9(a) with respect to any information that is or becomes publicly known other than as a result of the Executive’s breach of the Executive’s obligations hereunder and (ii) the Executive may (x) disclose such information to the extent he determines that so doing is reasonable or appropriate in the performance of the Executive’s duties or, (y) after giving prior notice to the Company to the extent practicable, under the circumstances, disclose such information to the extent required by applicable laws or governmental regulations or by judicial or regulatory process.  Upon termination of the Executive’s employment, the Executive shall promptly supply to the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by or otherwise submitted to the Executive in the course of or otherwise in connection with the Executive’s services to the Company Affiliated Group during or prior to the Employment Term.

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(b)Non-Competition and Non-Solicitation.  During the period commencing upon the Effective Date and ending on the 18-month anniversary of the termination of the Executive’s employment with the Company, the Executive shall not, as an employee, employer, stockholder, officer, director, partner, associate, consultant or other independent contractor, advisor, proprietor, lender, or in any other manner or capacity (other than with respect to the Executive’s services to the Company Affiliated Group), directly or indirectly:

(i)perform services for, or otherwise have any involvement with, any business unit of a person, where such business unit competes directly or indirectly with any member of the Company Affiliated Group by owning or operating (x) broadband communications networks for telephone, cable television or internet services or (y) transmission networks for television and radio broadcasting, in each case principally in the United Kingdom or Ireland (the “Core Business”); provided, however, that this Agreement shall not prohibit the Executive from owning up to 1% of any class of equity securities of one or more publicly traded companies;

(ii)hire any individual who is, or within the 12 months prior to the Executive’s termination was, an employee of any member of the Company Affiliated Group whose base salary at the time of hire exceeded £65,000 per year and with whom the Executive had direct contact (other than on a de minimis basis); or

(iii)solicit, in competition with any member of the Company Affiliated Group in the Core Businesses, any business, or order of business from any person that the Executive knows was a current or prospective customer of any member of

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the Company Affiliated Group during the Executive’s employment and with whom the Executive had contact;

provided, that, notwithstanding the foregoing, the Executive shall not be deemed to be in violation of clause (i) or clause (iii) of the foregoing by virtue of (i) rejoining Fried, Frank, Harris, Shriver & Jacobson LLP (or any of its successors or affiliates) as a partner, member or employee, and acting in such capacity or (ii) acting as an attorney (as partner, shareholder, member or employee) or as vice president, director or managing director or similar position at any other law firm, investment banking firm or consulting firm, institutional investor or similar entity, in each case so long as the Executive takes reasonable steps to insulate himself from the businesses and activities of any such entity that relate to the Core Businesses during any period that this Section 9(b) is in effect.

(c)Proprietary Rights.  The Executive assigns all of the Executive’s interest in any and all inventions, discoveries, improvements and patentable or copyrightable works initiated, conceived or made by the Executive, either alone or in conjunction with others, during the Employment Term and related to the business or activities of any member of the Company Affiliated Group to the Company or its nominee.  Whenever requested to do so by the Company, the Executive shall execute any and all applications, assignments or other instruments that the Company shall in good faith deem necessary to apply for and obtain trademarks, patents or copyrights of the United States or any foreign country or otherwise protect the interest of any member of the Company Affiliated Group therein.  These obligations shall continue beyond the conclusion of the Employment Term with respect to inventions, discoveries,

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improvements or copyrightable works initiated, conceived or made by the Executive during the Employment Term.

(d)Acknowledgment.  The Executive expressly recognizes and agrees that the restraints imposed by this Section 9 are reasonable as to time and geographic scope and are not oppressive.  The Executive further expressly recognizes and agrees that the restraints imposed by this Section 9 represent a reasonable and necessary restriction for the protection of the legitimate interests of the Company Affiliated Group, that the failure by the Executive to observe and comply with the covenants and agreements in this Section 9 will cause irreparable harm to the Company Affiliated Group, that it is and will continue to be difficult to ascertain the harm and damages to the Company Affiliated Group that such a failure by the Executive would cause, that the consideration received by the Executive for entering into these covenants and agreements is fair, that the covenants and agreements and their enforcement will not deprive the Executive of an ability to earn a reasonable living, and that the Executive has acquired knowledge and skills in this field that will allow the Executive to obtain employment without violating these covenants and agreements.  The Executive further expressly acknowledges that the Executive has received an opportunity to consult independent counsel before executing this Agreement.

10.Indemnification.

(a)To the extent permitted by applicable law, the Company shall indemnify the Executive against, and save and hold the Executive harmless from, any damages, liabilities, losses, judgments, penalties, fines, amounts paid or to be paid in

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settlement, costs and reasonable expenses (including, without limitation, attorneys’ fees and expenses), resulting from, arising out of or in connection with any threatened, pending or completed claim, action, proceeding or investigation (whether civil or criminal) against or affecting the Executive by reason of the Executive’s service from and after the Effective Date as an officer, director or employee of, or consultant to, any member of the Company Affiliated Group, or in any capacity at the request of any member of the Company Affiliated Group, or an officer, director or employee thereof, in or with regard to any other entity, employee benefit plan or enterprise (other than arising out of the Executive’s acts of misappropriation of funds or actual fraud).  In the event the Company does not compromise or assume the defense of any indemnifiable claim or action against the Executive, the Company shall promptly cause the Executive to be paid to the extent permitted by applicable law all costs and expenses incurred or to be incurred by the Executive in defending or responding to any claim or investigation in advance of the final disposition thereof; provided, however, that if it is ultimately determined by a final judgment of a court of competent jurisdiction (from whose decision no appeals may be taken, or the time for appeal having lapsed) that the Executive was not entitled to indemnity hereunder, then the Executive shall repay forthwith all amounts so advanced.  The Company may not agree to any settlement or compromise of any claim against the Executive, other than a settlement or compromise solely for monetary damages for which the Company shall be solely responsible, without the prior written consent of the Executive, which consent shall not be unreasonably withheld.  This right to indemnification shall be in addition to, and not in lieu of, any other right to

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indemnification to which the Executive shall be entitled pursuant to the Company’s Certificate of Incorporation or By-laws or otherwise.

(b)Directors’ and Officers’ Insurance.  The Company shall use its best efforts to maintain commercially reasonable directors’ and officers’ liability insurance during the Employment Term which will cover the Executive.

11.Certain Additional Payments by the Company.

Anything in this Agreement to the contrary notwithstanding, in the event that it is determined (as hereafter provided) that any payment (other than the Gross-Up Payments provided for in this Section 11) or distribution by the Company or any of its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including, without limitation, any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the Executive will be entitled to receive an additional payment or payments

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(collectively, a “Gross-Up Payment”).  The Gross-Up Payment will be in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.  For purposes of determining the amount of the Gross-Up Payment, the Executive will be considered to pay (x) federal income taxes at the highest rate in effect in the year in which the Gross-Up Payment will be made and (y) state and local income taxes at the highest rate in effect in the state or locality in which the Gross-Up Payment would be subject to state or local tax, net of the maximum reduction in federal income tax that could be obtained from deduction of such state and local taxes.

12.Miscellaneous.

(a)Non-Waiver of Rights.  The failure to enforce at any time the provisions of this Agreement or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part hereof, or the right of either party to enforce each and every provision in accordance with its terms.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar conditions or provisions at that time or at any prior or subsequent time.

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(b)Notices.  All notices required or permitted hereunder will be given in writing, by personal delivery, by confirmed facsimile transmission (with a copy sent by express delivery) or by express next-day delivery via express mail or any reputable courier service, in each case addressed as follows (or to such other address as may be designated):

If to the Company:	NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP Attention: Carolyn Walker, Group HR Director Fax: +44 1256 752 454
With a copy to:	Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, New York  10004 Fax: +001 212 859 4000 Attention:  Jeffrey Bagner, Esq.
If to the Executive:	Bryan H. Hall 514 Ridgewood Avenue Glen Ridge, NJ 07028 With a copy to his address on file with the Company’s payroll department Fax: none

Notices that are delivered personally, by confirmed facsimile transmission, or by courier as aforesaid, shall be effective on the date of delivery.

(c)Binding Effect; Assignment.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, personal representatives, estates, successors (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) and assigns.  Notwithstanding the

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provisions of the immediately preceding sentence, the Executive shall not assign all or any portion of this Agreement without the prior written consent of the Company.

(d)Withholding.  The Company shall withhold or cause to be withheld from any payments made pursuant to this Agreement any relevant taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling in accordance with the Tax Equalization Policy set forth in Appendix B.

(e)Entire Agreement.  This Agreement constitutes the complete understanding between the parties with respect to the Executive’s employment and supersedes any other prior oral or written agreements, arrangements or understandings between the Executive and any member of the Company Affiliated Group.  Without limiting the generality of this Section 12(e), effective as of the Effective Date, this Agreement supersedes any existing employment, retention, severance and change-in-control agreements or similar arrangements or understandings (collectively, the “Prior Agreements”) between the Executive and the Company and any member of the Company Affiliated Group, and any and all claims under or in respect of the Prior Agreements that the Executive may have or assert on or following the Effective Date shall be governed by and completely satisfied and discharged in accordance with the terms and conditions of this Agreement.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

(f)Severability.  If any provision of this Agreement, or any application thereof to any circumstances, is invalid, in whole or in part, such provision or application

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shall to that extent be severable and shall not affect other provisions or applications of this Agreement.

(g)Governing Law, Etc.  This Agreement shall be governed by and construed in accordance with the internal laws of England and Wales, without reference to the principles of conflict of laws.  Both parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.

(h)Modifications.  Neither this Agreement nor any provision hereof may be modified, altered, amended or waived except by an instrument in writing duly signed by the party to be charged.

(i)Number and Headings.  Whenever any words used herein are in the singular form, they shall be construed as though they were also used in the plural form in all cases where they would so apply.  The headings contained herein are solely for purposes of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement.

(j)Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(signature page follows)

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has executed this Agreement as of the day and year first above written, in each case effective as of the Effective Date.

NTL INCORPORATED

/s/ Simon Duffy

By:  Simon Duffy

Title:  Chief Executive Officer

/s/ Bryan H. Hall

Bryan H. Hall

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Appendix A

DRAFT   NTL: ASSIGNMENT COMPENSATION SUMMARY SHEET

Personal / Assignment Information
Assignee Name:		Bryan Hall
Home Country:	United States of America	Host Country:			United Kingdom
Length of Assignment:		To 31st December 2006
Annual Leave Entitlement:						5 weeks
Accompanied Assignment:		Partner:	ý				(tick if accompanying)
		Dependant(s):		2			(total accompanying assignee)
Assignment Remuneration Details
Assignment Base Salary (Gross):		£300,000
Tax Equalised:		Yes
Home for Tax Equalisation Purposes:		As per NTL policy

		Tick if Applies	Maximum Spend (£)
Ernst & Young LLP Tax Services		ý	As Agreed with Ernst & Young
Pre-Assignment Visit – Hotel Accommodation		ý	As per NTL policy
Pre-Assignment Visit – Daily Per Diem		ý	As per NTL policy
Relocation Allowance		ý	£25,000
Temporary Accommodation		ý	As per NTL policy
Housing		ý	£1,850 per week
Furniture Hire		ý	As per NTL policy
Company Car Cash Allowance		ý	£10,620 per annum
Home Leave		ý	As per NTL policy
Other Details
Pension	As per NTL policy (Company payment to US NTL Inc. 401(k) plan of 2/3rds of Executive’s actual contribution to a maximum of 6% of base salary).
Social Security	Home
Healthcare	Cigna International Plan for self + family (four children total (all under the age of 18))
Disability Insurance	UNUM Group Plan (for self)
Vision Plan	As per NTL policy

NOTE: THIS DOCUMENT ONLY PROVIDES A SUMMARY, REFERENCE MUST BE MADE TO
THE NTL EXPATRIATE POLICY AND THE NTL TAX EQUALISATION POLICY FOR
CONDITIONS ATTACHING TO ALL ITEMS DESCRIBED ABOVE

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Appendix B

NTL INCORPORATED
US TAX & SOCIAL SECURITY EQUALISATION POLICY
Effective 1st January 2004

A.Objective

A US tax & social security equalisation policy has been established for employees on assignment from the USA, as an employee’s actual tax liability will be different from what it would have been had the employee not left the USA.  This policy only applies to employees who are entitled to tax equalisation under the terms of their Contract of Employment and/or Terms of Assignment Letter/Assignment Compensation Summary Sheet.

Throughout this policy the masculine gender has been used for simplification and is to be read in the feminine gender whenever appropriate.

The objective of this policy is to ensure that the employee pays approximately no more or no less tax/social security on income and benefits than he would have paid had that employee remained living and working in the USA.

By equalising income tax/social security costs for its employees, NTL Inc. intends that each employee shall fully comply with the tax filing and payment requirements imposed by the fiscal authorities in the host country and the USA. Assistance will be provided to the employee by Ernst & Young LLP in order to meet their Tax Return filing requirements. (Also refer to Section 3.5 of the “Expatriate Policy”)

NTL Inc. reserves the right to amend this Tax Equalisation Policy as necessary.

B.Reporting Obligations

NTL Inc. requires that all employees be familiar and comply fully with all applicable national and local laws. In connection with tax/social security matters, the following guidelines ensure that NTL Inc. and its employees will meet those requirements.

•NTL Inc. regards timely compliance with worldwide income tax/social security requirements as a mandatory obligation of each employee.

•An employee must conduct himself at all times so as to avoid charges of fiscal evasion or abuse, or of violation of local law, which could jeopardise in any way his standing personally or as a representative of NTL Inc.

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•An employee is expected to exercise care and attention in minimising his liability for worldwide income taxes/social security contributions in accordance with appropriate principles of fiscal planning. An employee must co-operate with NTL Inc. to ensure that his home and host country Tax Returns are filed in such a manner as to produce the lowest possible tax permitted by law.

Each employee is required to report taxable income and pay income taxes to the taxing authorities which have jurisdiction during the period of his assignment. The income tax/social security contributions to be paid by each employee will be governed by the fiscal laws and regulations under which the authorities operate.

Failure to Comply:

Upon notification by Ernst & Young LLP to NTL Inc. of an employee’s failure to comply with all the above requirements, the employee will be given by written notice one month to comply.

If after that time the employee continues to be non compliant a penalty hypothetical tax rate of 50% will be imposed on all income specified under Section D(1) below.

If after three months from the date of the above written notice the employee is still non-compliant, entitlement to tax equalisation will cease immediately together with eligibility for assistance under Section C below and Section 2.2 of the “Expatriate Policy”.  This will result in the employee being personally responsible for payment of all tax and social security liabilities on worldwide income, as well as the preparation and filing of all Tax Returns.

C.Tax Return Preparation Assistance

It is the responsibility of each employee to ensure that the proper Tax Returns are filed when due. NTL Inc. has engaged Ernst & Young LLP to assist employees in meeting this obligation. The fee for such services will be borne directly by NTL Inc.

Tax Returns prepared by Ernst & Young LLP will be kept confidential by them. However, in completing annual tax equalisation reconciliation calculations, limited essential information will be extracted from the actual home/host country Tax Returns to facilitate operation of this Tax Equalisation Policy.

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D.Implementation of Tax Equalisation

NTL Inc. will continue to withhold actual US Social Security contributions from the compensation relating to the assignment period, subject to any statutory limits and the terms of this Tax Equalisation Policy

Under this Tax Equalisation Policy, each employee will have a total income tax and social security liability approximating to his liability had he not been assigned outside the USA.  This position is achieved by calculating a preliminary hypothetical tax/social security liability and reducing the employee’s compensation by that amount.

In order to ensure that the preliminaryhypothetical tax retained during a year is as near as possible to an employee’s final hypothetical tax obligation to NTL Inc., an estimate of the employee’s personal income and allowable itemised deductions will need to be provided to Ernst & Young LLP at the commencement of the assignment and in January of each subsequent year of assignment.

Having reduced compensation by a retained hypothetical US income tax, NTL Inc. will assume responsibility for paying the employee’s actual worldwide income tax and social security liabilities, if any.

After the close of the year, and after an employee’s US Federal (and State, if required) Tax Return has been filed, Ernst & Young LLP will prepare a year-end reconciliation. The “preliminary hypothetical US tax” will be adjusted, to reflect actual income and deductions in place of estimated amounts used at the beginning of the year. This reconciliation will be the basis of a final settlement between NTL Inc. and the employee of that year’s income tax reimbursement.

1.Hypothetical US tax (retained from pay)

Hypothetical tax represents an estimate of the employee’s US Federal and State tax obligations on his projected taxable income. The Federal hypothetical tax will be calculated using actual filing status, current dependency exemptions and tax rates for the taxable year.

NTL Inc. policy is to calculate hypothetical State tax based upon a fixed rate of 6% of hypothetical “adjusted gross income”.  The fixed State tax rate will be reviewed every three years but there will be no mid assignment rate changes.

In summary, income to be included in the hypothetical tax calculations is as follows:-

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•base salary (net after deduction of employee 401k contributions and employee pre-tax medical contributions)

•bonus

•all income from stock based incentives

•group term life

•personal passive (investment) income

(See section 2(a) below for further definitions)

If married, passive income of the employee’s spouse will also be included. Subject to the specific exception below, spousal salary and/or other earned income from employment performed outside the USA, however, is specifically excluded from the hypothetical calculation. Rationale: A spouse is eligible to make an election under the IRS Code Sec.911 for a foreign earned income exclusion in their own right. This, plus credit for foreign taxes paid on foreign source wages, should result in no incremental US tax being due on such income. The spouse remains personally liable for all foreign income tax and social security contributions due.

In arriving at hypothetical taxable income, deductions will be available for:

•actual amounts claimed on Federal Tax Return to arrive at “adjusted gross income”.

•actual itemised deductions per Federal Tax Return, excluding any itemised deductions funded by NTL.

•actual mortgage interest and real estate taxes paid per Federal Income Tax Return Schedule A, form 1040 as filed with the IRS.

•a deduction will be given for hypothetical State taxes payable to NTL.

The hypothetical US income tax retained from pay may be changed by NTL Inc. during the course of a year whenever there is a change in:

•the employee’s compensation; or

•401(k) contribution; or

•other NTL Inc. income/related deductions; or

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•a change in filing status or number of dependants.

Also, upon prompt notification to Ernst & Young LLP and verification of US itemised deductions and deductible losses and adjustments such as US rental losses, etc. NTL Inc. may reduce the retained hypothetical tax to give the employee the appropriate reduction in retained hypothetical tax. Conversely, NTL Inc. may increase the retained hypothetical tax in order to collect the additional hypothetical US income tax on net personal income such as dividends, interest, capital gains etc.

The hypothetical US income tax retained from pay is not a withholding tax and should not be confused with the amount of US income tax withholding to which the employee may have been subject prior to their assignment. The two amounts are calculated in different ways and will often be different in amount. The hypothetical US income tax is simply a negative item in the employee’s compensation package which, because it approximates to his tax obligation for the year on NTL Inc. income, provides the employee with approximately the same net level of spendable income as if they had remained in the home location.

Spousal Income - Exception

In the event that both spouses are employed by NTL Inc. and on foreign assignment, the hypothetical tax liability will be based on the inclusion of all income (as above) and calculated on the basis of the married filing joint tax rates. The hypothetical taxes payable by each spouse will be in proportion to their respective gross income (as defined above), but net of 401k contributions and/or other NTL Inc. income/related deductions.

2.Final Hypothetical US Tax (for tax reimbursement purposes)

As stated above, after the close of the year, the “preliminary hypothetical US tax” will be adjusted to a “final hypothetical US tax” based on actual amounts. This hypothetical US tax then becomes the “final” tax burden which an employee must bear for the year.

Because the USA taxes its citizens and green-card holders on worldwide income, the final hypothetical US tax will be based not only on NTL Inc. base salary and bonus, etc as defined in Section 1 above, but also on the employee’s taxable net personal income or loss, adjustments to income, and in most circumstances on his actual itemised deductions as well. In the absence of a reduction in the preliminary hypothetical US tax as discussed above, the NTL Inc. employee with losses, alimony or itemised deductions will likely receive a cash reimbursement from NTL Inc. after the end of the

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year. On the other hand, an NTL Inc. employee with net personal income will be obliged to make a cash payment to NTL Inc. after the end of the year equal to the additional hypothetical tax on such income. Such employees are thereby on notice that they must have sufficient cash to pay this hypothetical tax on personal income, or make arrangements for NTL Inc. to retain it through payroll. Any additional hypothetical tax due to NTL/from NTL must be settled by either the employee or NTL as appropriate within 30 days of receipt of the finalised tax equalisation settlement from Ernst & Young LLP.

The final hypothetical US tax will be based on the following items:

(a)NTL Inc. Income

•Base salary, less 401(k) contributions and any other pre-tax employee contributions. (For this purpose, in the case of an employee who works a part-year on assignment for NTL Inc. and who works a part-year for NTL Inc. in the US base salary will be the sum of the two part-year base salaries).

•Cash bonuses and any other cash incentive compensation.

•Income from all NTL Inc. stock based incentives, including, but not limited to, non-qualifying stock options (NQSO) and Incentive Stock Options (ISO)

•Imputed income from group term life insurance and any other employee benefit considered taxable in the US which the employee would have received independent of his assignment.

•Assignment related allowances and reimbursements including the one month relocation allowance (See Expatriate Policy) are excluded from all calculations of hypothetical tax to ensure that NTL Inc. bears the full cost of any tax imposed on these items.

(b)Net Personal Income

“Net personal income” is the positive amount, which results from subtracting “personal losses” from “personal income”. NTL Inc. reserves the right to “cap” the amount of net personal income which it will tax equalise under this policy, and also to limit its reimbursement of host country taxes thereon when such taxes could have been avoided by following the tax advice of Ernst & Young LLP.

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“Personal income” encompasses income earned or received from sources other than NTL Inc. It includes, but is not limited to, amounts from the following sources which are taxable on an employee’s actual US Tax Return:

•Dividends.

•Interest.

•State income tax refunds.

•Net capital gain, including the taxable gain from the sale of an employee’s US principal residence and gain from the sale of any residence owned by the employee in the country of assignment or any other country outside the USA

•Net rental income (but excluding NTL Inc. funded expenses).

•Net partnership income.

(See “The Expatriate Policy” Sections 3.10 & 5.2 for general rules for house sales)

“Personal Income” also includes:

•Any salaries or compensation received by the employee prior to, or subsequent to, the International Assignment, while self-employed or employed by a corporation unrelated to NTL Inc..

•Any salaries, compensation or self-employment income received by the employee’s spouse prior to, or subsequent to, the International Assignment.

During the period of the employee’s assignment, to the extent that an employee’s spouse has a job in the host country, or is self-employed there, the spouse will be fully responsible for any income and social taxes imposed on the spouse’s income. In this circumstance, the year-end US tax equalisation calculation will not reflect a final hypothetical US income tax on such income; and in calculating the actual US income tax if any, attributable to the spouse’s income, the spouse will receive the full benefit of the spouse’s “earned income exclusion” and the appropriate “foreign tax credit” available under US tax law.

“Personal losses” encompass losses funded exclusively by the employee. This category includes, but is not limited to:

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•Net capital loss deductible on the actual US income Tax Return.

•Net rental loss deductible on the actual US income Tax Return (but excluding any NTL Inc. funded expenses).

•Net partnership loss deductible on the actual US income Tax Return.

(c)Net Personal Loss

“Net Personal Loss is the negative amount which results from subtracting “personal losses” from “personal income”.

(d)Deductions

The following deductions which are not funded by NTL Inc. will be allowed in arriving at an employee’s hypothetical taxable income for purposes of computing his final hypothetical US income tax:

•Adjustments to gross income claimed on the employee’s actual US income Tax Return for the taxable year, such as alimony and deductible IRA contributions; plus

•the amount of actual itemised deductions deductible on an employee’s US income Tax Return for the taxable year plus the amount of the final hypothetical State income tax for the year.

An employee’s actual itemised deductions will be reduced by those expenses which were reimbursed (directly or in the form of an allowance) by NTL Inc.

The phase out of itemised deductions for high income tax payers will be recalculated based upon the hypothetical stay at home income included in the final annual tax equalisation settlement

(e)Tax Rates & Filing Status

In computing the final hypothetical US income tax, the tax rates and filing status to be used are those used on the actual US Federal  income Tax Return and the fixed State tax rate (See Section 1 above) for the year.

3.Reimbursement of Actual Worldwide Income Taxes & Social Security

Having reduced an employee’s compensation by a retained hypothetical US income tax which is later adjusted to a final hypothetical US tax, NTL Inc.

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will reimburse the actual amount of worldwide income taxes paid by an employee as well as local social taxes paid, if any.

Whenever an employee must pay a local income or social tax, NTL Inc. will at that time pay the amount of such tax to or on behalf of the employee. This includes local income and social taxes in the form of:-

•Withholding taxes which NTL Inc. is required to pay over to the assignment country government.

•Estimated tax filings made during the year.

•Payment of the balance due with the assignment country income Tax Return or upon final assessment for the tax year.

In all cases, the employee’s cash flow will not be reduced by tax payments to the assignment country government.

Verification of the actual amount of local taxes paid by each employee will be provided by Ernst & Young LLP, which will communicate the amount thereof to NTL Inc.. An amount equal to any local tax refunds must be paid or turned over to NTL Inc. by the employee, since NTL Inc. (and not the employee) will have funded all local taxes.

4.Year-End US Tax Equalisation

After an employee’s US Tax Return has been filed, Ernst & Young LLP will prepare a tax reconciliation calculation.

NTL Inc. will provide to Ernst & Young LLP the salary and other information (retained hypothetical tax, etc.) necessary to complete this form. Ernst & Young LLP will send the year-end US Tax reconciliation to NTL Inc. and the employee. Both parties will review and approve the calculations provided by Ernst & Young LLP.

The year-end US Tax reconciliation will reconcile the preliminary hypothetical US income tax with the final hypothetical US income tax for the year. It will also disclose the actual US income tax for the year (if any) which, under this policy, is fully reimbursable by NTL Inc.. The reconciliation will then indicate the net reimbursement owed to/by the employee, and NTL Inc. Reimbursement will be made promptly, within 30 days of Ernst & Young LLP issuing the calculation.

NTL Inc. will reimburse the employee for all interest and penalties relating to NTL Inc. income except when the assessment of the interest

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and penalties results from the negligence or fault of the employee; e.g., a delay in submitting data booklets or tax questionnaires to Ernst & Young LLP which in turn prevents the timely filing of a return. (Also see Section B above)

NTL Inc. will also reimburse interest imposed on any balance due resulting from an extended due date for filing US Tax Returns granted to US taxpayers residing overseas.

5.Credits Allowed against US tax for Host Country Taxes Paid

Any tax credits for host country taxes (referred to as “foreign tax credits”) paid or reimbursed by NTL Inc. which reduce an employee’s US income tax liability prior to, during or subsequent to his assignment, will be for the benefit of NTL Inc..  This repayment is to be made within 14 days of receipt from the IRS.

It also includes tax credits (reimbursed by NTL Inc.) which are carried back or carried forward, regardless of whether the income in the carryback or carry forward year is related to the International Assignment.  In such instances, an employee must pay the amount of his tax refund received from the Internal Revenue Service, plus interest, to NTL Inc..  This payment is to be made within 14 days of receipt of the refund.

6.Net Operating Losses

Any net operating losses resulting from exclusions available to US citizens working abroad will be considered to be for the benefit of NTL Inc., because the tax benefit of these personal losses will have been fully realised by the employee in the hypothetical tax calculation.  This includes a net operating loss which is carried back or carried forward regardless of whether the income in the carryback or carry forward year is related to the International Assignment.  In such instances, an employee must pay the amount of his tax refund received from the Internal Revenue Service and applicable State tax authority, plus interest, to NTL Inc..  This payment is to be made within 14 days of receipt of the refund.

7.Subsequent Adjustments

Assignment country government or US Internal Revenue Service or State government examinations of employee Tax Returns are not uncommon.  When they occur, the year-end US or local tax equalisation for that year will be recomputed, if necessary, with adjustments made as appropriate.

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NTL will pay or reimburse reasonable fees, subject to prior approval, incurred by Ernst & Young LLP for dealing with US IRS or foreign tax notices, audits and examinations.

8.“Tax on Tax”

Whenever NTL Inc. reimburses local or US income taxes (either currently, or in the following year), such reimbursements themselves constitute taxable income for US income tax purposes and, generally, for assignment country tax purposes as well.  Under this Tax Equalisation Policy any “final” tax paid with respect to income tax reimbursements will be fully reimbursed by NTL Inc. and grossed up as appropriate.

For repatriated employees receiving tax reimbursements during the year subsequent to termination of their International Assignment, the payment may be grossed up to include any final tax due on the reimbursement in order to keep the employee whole.

[9.Short-term loans/advances

Even though compensation is reduced by the US hypothetical tax, it may be necessary for NTL Inc. to withhold actual US or local taxes as applicable, and to remit these taxes to the proper US and local taxing authorities.  In order to ease the employee’s cash flow burden, the employee in such cases will receive a loan or tax advance equal to the host and/or US taxes withheld, with the approval of NTL Inc.  The total loan or tax advanced will be settled in the following year at the time the Year-End US Tax Equalisation or local tax reconciliation is prepared.]

10.Annual settlement with employee

When the Year-End US Tax Equalisation calculations result in a balance due to the employee, the amount will first be applied against any outstanding loans or tax advances for the same year.  The remainder will be paid by NTL Inc. to the employee.

If loans for a particular year exceed the amount of the tax equalisation balance due, the employee must repay such excess loans to NTL Inc. within 14 days of receiving the applicable refund of taxes from the US or host country taxing authorities.  NTL Inc. reserves the right to recapture all unpaid tax loans by reducing the employee’s base salary.

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11.Treatment of new, returning, terminated and retired employees

For an employee who is hired, transferred, terminated or who returns home during the year, the Year-End US Tax Equalisation will be adjusted in order to compare:

•Hypothetical US income tax retained from compensation (described above) during the portion of the year spent on International Assignment,

•Final hypothetical US income tax (described above) on the entire year’s income, and

•Actual US income tax liability on Form 1040 for the entire year.

Where the employee was employed by an employer other than NTL Inc. or any affiliate during the year, compensation from the employee’s previous or subsequent employer will be treated as personal income and will therefore be subject to US hypothetical tax and will be fully tax equalised.

Where the employee spent part of the year (either pre-assignment or post assignment) in the US he will be fully responsible for applicable State income taxes assessed during such part-year periods, except to the extent that such State income taxes are increased by a NTL Inc. allowance on which NTL Inc. assumes responsibility for paying actual taxes.

12.Treatment of employees who are married to participants in tax equalisation policies of other employers

For an employee whose spouse is employed in the host country by entities other than NTL Inc. and is covered by a tax equalisation policy of another employer, the manner in which the final hypothetical tax and reimbursable US and local taxes are calculated will be determined on a case-by-case basis.  This approach will ensure that an NTL Inc. employee receives the protection to which he is entitled under the NTL Inc. US Tax & Social Security Equalisation Policy by eliminating any distorted results which could occur if the standard calculations were performed.

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Appendix C

NTL Incorporated Equity-Based Compensation

Options to purchase common stock of NTL Incorporated

The Executive will be granted 60,000 options at an exercise price equal to the fair market value on the date of execution of the employment agreement.

Vesting period = three years

The options granted will vest 33% on each anniversary of the Effective Date.

Other terms:  The options will be subject to the Company’s standard form of stock option agreement.

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Appendix D

A “Change in Control” shall be deemed to occur if the event set forth in any one of the following paragraphs shall have occurred:

(i)Any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company) representing 30% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (a) of Paragraph (iii) below; or

(ii)the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date the Plan is adopted by the Board of Directors of the Company (“Board”), constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, without limitation, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

(iii)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (a) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (b) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directory or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or

(iv)the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by the stockholders of the Company immediately prior to such sale.

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Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

For purposes of this Appendix D:

“Affiliate” shall have the meaning set forth in Rule 12b-2 under Section 12 of the Securities Exchange Act of 1934.

“Person” shall have the meaning given in Section 3(a)(9) of the Securities Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof, except that such terms shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, except that a Person shall not be deemed to be the Beneficial Owner of any securities which are properly filed on a Form 13-G.

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Appendix E

RELEASE AGREEMENT

In consideration of the severance payments and benefits provided for or referred to in the Employment Agreement, dated as of May 31, 2004, to which the undersigned is a party (the “Benefits”), and the release from the undersigned set forth herein, NTL Incorporated (the “Company”) and the undersigned agree to the terms of this Release Agreement.

1.The undersigned acknowledges and agrees that the Company is under no obligation to offer the undersigned the Benefits, unless the undersigned consents to the terms of this Release Agreement.  The undersigned further acknowledges that he is under no obligation to consent to the terms of this Release Agreement and that the undersigned has entered into this agreement freely and voluntarily.

2.The undersigned voluntarily, knowingly and willingly releases and forever discharges the Company and its Affiliates, together with their respective officers, directors, partners, shareholders, employees, agents, and the officers, directors, partners, shareholders, employees, agents of the foregoing, as well as each of their predecessors, successors and assigns (collectively, “Releasees”), from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever that the undersigned or his executors, administrators, successors or assigns ever had, now has or hereafter can, shall or may have against Releasees by reason of any matter, cause or thing whatsoever arising prior to the time of signing of this Release Agreement by the undersigned.  The release being provided by the undersigned in this Release Agreement includes, but is not limited to, any rights or claims relating in any way to the undersigned’s employment relationship with the Company, or the termination thereof, or under any statute, including the federal Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1990, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act of 1993, each as amended, and any other federal, state or local law or judicial decision (U.S. and non-U.S.).

3.The undersigned acknowledges and agrees that he shall not, directly or indirectly, seek or further be entitled to any personal recovery in any lawsuit or other claim against the Company or any other Releasee based on any event arising out of the matters released in paragraph 2.

4.Nothing herein shall be deemed to release (i) any of the undersigned’s rights to the Benefits, (ii) any of the benefits that the undersigned has accrued prior to the date this Release Agreement is executed by the undersigned under the Company’s employee benefit plans and arrangements, or any agreement in effect with

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respect to the employment of the undersigned or (iii) any claim for indemnification as provided under Section 10 of the Employment Agreement.

5.In consideration of the undersigned’s release set forth in paragraph 2, the Company knowingly and willingly releases and forever discharges the undersigned from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever that the Company now has or hereafter can, shall or may have against him by reason of any matter, cause or thing whatsoever arising prior to the time of signing of this Release Agreement by the Company, provided, however, that nothing herein is intended to release any claim the Company may have against the undersigned for any illegal conduct or conduct constituting gross negligence or willful misconduct in connection with his employment with the Company.

6.The undersigned acknowledges that the Company has advised him to consult with an attorney of his choice prior to signing this Release Agreement.  The undersigned represents that, to the extent he desires, he has had the opportunity to review this Release Agreement with an attorney of his choice.

7.The undersigned acknowledges that he has been offered the opportunity to consider the terms of this Release Agreement for a period of at least twenty-one days, although he may sign it sooner should he desire.  The undersigned further shall have seven additional days from the date of signing this Release Agreement to revoke his consent hereto by notifying, in writing, the Secretary of the Company.  This Release Agreement will not become effective until seven days after the date on which the undersigned has signed it without revocation.

Bryan Hall

NTL Incorporated

By:

Title:

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Simon P. Duffy, certify that:

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

2. Based on my knowledge, this 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 report.

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b)[Omitted pursuant to SEC Release No. 33-8238];

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 6,  2004	/s/ Simon P. Duffy
	Simon P. Duffy
	Chief Executive Officer, President and Director

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EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

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 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 report.

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b)[Omitted pursuant to SEC Release No. 33-8238];

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2004	/s/ Scott E. Schubert
	Scott E. Schubert
	Chief Financial Officer

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EX-32

Exhibit 32

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 June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Simon P. Duffy, 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/ Simon P. Duffy
Name:	Simon P. Duffy
Title:	Chief Executive Officer, President and Director
Date:	August 6, 2004
/s/ Scott E. Schubert
Name:	Scott E. Schubert
Title:	Chief Financial Officer
Date:	August 6, 2004

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.

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