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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

Commission File Number 0-24792

NTL (TRIANGLE) LLC

NTL House, Bartley Wood Business Park, Hook,
Hampshire, RG27 9UP, England
011 44 1256 752000

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 twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.     Yes (X) No (   )

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

As of September 30, 2003, there were 800,000 shares of the Registrant’s common membership interests outstanding. The Registrant is an indirect, wholly owned subsidiary of NTL Incorporated and there is no market for the Registrant’s membership interests. The Registrant meets the conditions set forth in General Instructions H(1)(a) and H(1)(b) of Form 10-Q and is filing this form with the reduced disclosure format set forth in General Instruction H(2) thereto.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

INDEX

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS
(in £’000s, except member’s interests data)

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

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

     See accompanying notes.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

CONDENSED CONSOLIDATED STATEMENT OF MEMBER’S CAPITAL

     See accompanying notes.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     See accompanying notes.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.   Basis of Presentation

Organization and Business

We are a limited liability company established under the laws of the State of Delaware. We are the holding company of subsidiaries that offer broadband and communications services providing telephone, cable television and Internet services to the home, as well as data, voice and Internet services to businesses in the Republic of Ireland and in the East Anglia and North Eastern regions of the UK. These interests are held through our subsidiaries Cambridge Holding Company Limited and ntl Communications (Ireland) Limited. We are a wholly owned subsidiary of NTL Incorporated, or NTL, and are reliant upon the support of NTL and its subsidiaries to continue our operations.

Chapter 11 Reorganization

On May 8, 2002, NTL, NTL Europe, Inc. (formerly NTL Incorporated) and certain of their subsidiaries filed a pre-arranged joint reorganization plan under Chapter 11 of the US Bankruptcy Code. We were not included in the Chapter 11 filing, nor were the operating subsidiaries of NTL and NTL Europe. The Plan became effective on January 10, 2003, at which time NTL emerged from Chapter 11 reorganization.

Basis of Presentation

We have prepared our accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of our management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Our operating results for the three and nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K as amended for the year ended December 31, 2002.

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

2.   Recent Accounting Pronouncements

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

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” which requires variable interest entities to be consolidated by the primary beneficiary of the entity if certain criteria are met. FIN 46 is effective immediately for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 become effective for us during the fourth quarter of 2003. The implementation of this interpretation is not expected to have a significant effect on our results of operations, financial condition or cash flows.

In November 2002, the Emerging Issues Task Force reached a consensus on EITF No. 00-21, “Revenue Arrangements with Multiple Deliverables”. EITF 00-21 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. The provisions of EITF 00-21 will apply to

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of EITF 00-21 did not have a significant effect on our results of operations, financial condition or cash flows.

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

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

3.   Comprehensive income (loss)

Consolidated comprehensive income (loss) includes net loss as well as other comprehensive income (loss). Our other comprehensive income (loss) consists of changes in cumulative translation adjustment. Consolidated comprehensive income (loss) consists of (in £’000s) (unaudited):

4.   Fixed assets

Fixed assets consists of (in £000’s):

We are currently evaluating the remaining useful economic lives of our fixed assets. We expect to adopt new lives when the evaluation is completed. At this time, we have not yet quantified the likely impact on our depreciation charge upon the adoption of new lives.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

5.   Intangible Assets

Intangible assets consist of (in £000’s):

Estimated aggregate amortization expense for each of the five succeeding fiscal years from December 31, 2002 is as follows: £8.3 million in 2003, £4.9 million in 2004, £1.5 million in 2005, £0.9 million in 2006 and £0.3 million in 2007.

6.   Other Charges

Other charges of £1.1 million in 2003 include £0.4 million of restructuring costs incurred by our wholly owned subsidiary, NTL Ireland, for five employees and £0.7 million of costs allocated to us by a subsidiary of NTL. These costs are for employee severance and related costs.

Other charges of £3.3 million in 2002 include £1.1 million of restructuring costs incurred by NTL Ireland for 55 employees, and £2.2 million of costs allocated to us by a subsidiary of NTL.

Charges allocated to us by a subsidiary of NTL are made on the basis of an allocation formula appropriate to each category of charge that is based on management’s judgement of a reasonable methodology given the facts and circumstances.

The following table summarizes NTL Ireland’s activity related to restructuring charges incurred by NTL Ireland and utilized since 2002 (in £000’s) (unaudited):

7.   Related Party Transactions

In October 2000, NTL Ireland entered into a loan agreement with a subsidiary of NTL under which £80.9 million and £75.2 million had been borrowed at September 30, 2003 and December 31, 2002, respectively. The outstanding borrowings are due in October 2007. Interest is payable quarterly in arrears from March 31, 2001. The annual interest rate is set on January 1 of each year at the 12-month EURIBOR rate plus 1%. The effective interest rate at September 30, 2003 and December 31, 2002

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FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

was 3.73% and 4.32%, respectively. Accrued interest of £3,141,000 and £819,000 was included in due to affiliates in the consolidated balance sheet at September 30, 2003 and December 31, 2002, respectively.

Since NTL acquired us in October 1998, a subsidiary of NTL has been providing infrastructure and management support services to us. Benefits include usage of NTL network assets, network maintenance, marketing and shared overhead. Additionally, in 2001 certain elements of our network operations and customer operations were integrated with NTL’s national and regional operations in order for us to gain the advantage of NTL’s scale.

The related charges, which began in the fourth quarter of 1999, represent our portion of costs incurred by a subsidiary of NTL for the benefit of all UK operations within NTL. These charges are made on the basis of an allocation formula appropriate to each category of charge. We were charged £52.5 million and £52.1 million for the nine months ended September 30, 2003 and 2002, respectively. For 2003, £19.7 million was included in operating costs and £32.8 million was included in selling, general and administrative expense. For 2002, £20.9 million was included in operating costs and £31.2 million was included in selling, general and administrative expense. It is not practicable to determine the amount of these expenses that would have been incurred had we operated as an unaffiliated entity. In the opinion of our management, the allocation method is reasonable.

As of September 30, 2003 and December 31, 2002, the due to affiliates balance include payments made to third parties on our behalf by a subsidiary of NTL. We have reduced direct transactions with third parties as a result of our continued integration with NTL. We have therefore had our liabilities to third parties significantly reduced, with a rise in amounts due to affiliates. The payments made on our behalf represent directly attributable expenses incurred by us.

In addition, other charges include amounts allocated to us by a subsidiary of NTL as discussed in Note 6, Other Charges.

8.   Long-term Debt

Long-term debt consists of (in £000’s):

Owing to uncertainties about the compliance with the terms and conditions of our debt that would give the holders of the debt the right to accelerate repayment, all of our long-term debt was classified as current at December 31, 2002.

9.   Commitments and contingent liabilities

At September 30, 2003, we were committed to pay £0.8 million for equipment and services within the following twelve months.

We are involved in legal proceedings and claims that arise in the ordinary course of our business. In the opinion of our management, the amount of ultimate liability with respect to these actions will not materially affect our financial position, results of operations or liquidity.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

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

Overview

We are a limited liability company established under the laws of the State of Delaware. We are the holding company of subsidiaries that offer broadband and communications services providing telephone, cable television and Internet services to the home, as well as data, voice and Internet services to businesses in the Republic of Ireland and in the East Anglia and North Eastern regions of the UK. These interests are held through our subsidiaries Cambridge Holding Company Limited and ntl Communications (Ireland) Limited. We are a wholly owned subsidiary of NTL Incorporated, or NTL, and we are reliant upon the support of NTL and its subsidiaries to continue our operations.

Selected Operating Data

We set forth in the table below certain of our operating data at September 30 2003, and December 31, 2002.

(2)

Master Antenna Television (MATV) subscribers and Multi-channel Multi-point Distribution System (MMDS) subscribers.

(3)

Homes passed is the number of homes that have had ducting buried outside.

(4)

Homes marketed is the number of homes for which the initial marketing phase (including door to door direct marketing) has been completed.

(5)

Total customers for the UK franchises at December 31, 2002 have been restated to include 17,784 MATV customers.

(6)

Penetration is calculated by dividing the number of total customers by the number of homes marketed.

(7)

Telephone subscribers for NTL Ireland at September 30, 2003 exclude off-net subscribers.

(8)

NTL Ireland also offers MMDS television to 70,000 marketable homes and had 7,266 digital and 9,330 analog MMDS customers at September 30, 2003.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Results of Operations

We derive our revenue principally from monthly fees and usage charges. Our packaging of services and pricing are designed to encourage our customers to use multiple services like dual telephone and broadband, dual telephone and television or triple telephone, television and Internet access.

The principal components of our operating and selling, general and administrative expenses include (1) payroll and other employee related costs; (2) interconnection costs paid to other carriers related to telephone services; (3) television programming costs; (4) marketing and selling costs; (5) repairs and maintenance; (6) facility related costs, such as rent, utilities and rates; and (7) provisions for bad debt. A significant portion of our costs is charged to us by a subsidiary of NTL. These charges include costs for the provision of network services and support, the use of NTL’s national backbone telephony network for carriage of our telephony traffic, as well as the provision of technical infrastructure and network capacity by NTL for our subscription Internet service and digital cable services, the provision of corporate services, including finance, legal, human resources and facility services, and for the provision of IT services, including our use of the related IT equipment.

We continue to focus on improving our customer service and increasing our service offering to customers in an effort to curtail and control churn. NTL is in the process of integrating its various billing systems and customer databases in an effort to improve one of the main tools it uses to provide customer service. This effort is at a relatively early stage although NTL has continued to make progress through September 30, 2003. Although the new system does not yet support NTL’s full suite of services, NTL expects to complete the project substantially by late 2004. The total project cost is estimated to be approximately £75 million, of which NTL has incurred £46 million through September 30, 2003. If the full integration is not successful, we could experience an adverse effect on our customer service, our churn rate and our share of the costs of maintaining these systems going forward. We could also experience operational failures related to billing and collecting revenue from our customers, which, depending upon on the severity of the failure, could have a material adverse effect on our business.

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

NTL Ireland has introduced a more rigorous credit policy that led to the involuntary disconnection of certain customers. As a result of this, NTL Ireland’s residential customer base declined by approximately 15,000 customers during 2003. This did not have a significant overall impact on our results of operations or cash flows.

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NTL (TRIANGLE) LLC AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

Three months ended September 30, 2003 and 2002

We present below consolidated financial information for the three months ended September 30, 2003 and 2002 (in £000’s):

Between 2002 and 2003, we have introduced a number of price increases including the introduction of charges for our dial-up Internet service (which was previously available without charge) resulting in an improvement in our revenues. Furthermore, we have sold additional services to our existing customers and gained more broadband subscribers. We expect revenue increases in the future to be achieved by further growth in services such as digital television and broadband services.

Over the respective periods, we have seen a reduction in our operating costs. We have benefited from the efficiencies that NTL has gained in the network and negotiated reductions in the costs of interconnection and television programming. Our operating costs include certain costs that are charged by a subsidiary of NTL for the provision of network services and support, the use of NTL’s national backbone telephony network for carriage of our telephony traffic, as well as the provision of technical infrastructure and network capacity by NTL for our subscription Internet service and digital cable services. In the three months ended September 30, 2003 and 2002, we were charged £6.3 million and £6.4 million, respectively for these services.

Our selling, general and administrative expenses include certain costs that are charged by a subsidiary of NTL for the provision of corporate services, including finance, legal, human resources and facility services, and for the provision of IT services, including our use of the related IT equipment. In the three months ended September 30, 2003 and 2002, we were charged £11.1 million and £10.5 million, respectively, for these services.

Other charges include restructuring costs allocated to us by a subsidiary of NTL. These costs are for employee severance and related costs. Charges allocated to us by a subsidiary of NTL are made on the basis of an allocation formula appropriate to each category of charge that is based on management’s judgement of a reasonable methodology given the facts and circumstances.

Depreciation and amortization expense has reduced. We are currently evaluating the remaining useful

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FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

economic lives of our fixed assets. We expect to adopt new lives when the evaluation is completed. At this time, we have not yet quantified the likely impact on our depreciation charge upon the adoption of new lives.

We incur interest on our 2007 Senior Discount Debentures, which are denominated in US dollars, as well as interest on our capital lease obligations. Movements in our interest expense principally result from fluctuations in the US dollar/UK pound sterling exchange rates. We also incur interest on NTL Ireland’s loan from an affiliate of NTL, which is denominated in Euros and the interest rate of which is based on EURIBOR. Movements in interest expense to affiliates result from fluctuations in the euro/UK pound sterling exchange rates and movements in the EURIBOR rate.

Our results of operations will continue to be affected by exchange rate fluctuations. We are exposed to fluctuations in the UK pound sterling value of our 2007 Discount Debentures, which are denominated in US dollars.

Nine months ended September 30, 2003 and 2002

We present below consolidated financial information for the nine months ended September 30, 2003 and 2002 (in £000’s):

Between 2002 and 2003, we have introduced a number of price rises including the introduction of charges for our dial-up Internet service (which was previously available without charge) resulting in an improvement in our revenues. Furthermore, we have sold additional services to our existing customers and gained more broadband subscribers. We expect revenue increases in the future to be achieved by further growth in services such as digital television and broadband services.

Over the respective periods, we have seen a reduction in our operating costs. We have benefited from the efficiencies that NTL has gained in the network and negotiated reductions in the costs of interconnection and television programming. Our operating costs include certain costs that are charged by a subsidiary of NTL for the provision of network services and support, the use of NTL’s national backbone telephony network for carriage of our telephony traffic, as well as the provision of technical infrastructure and network capacity by NTL for our subscription Internet service and digital cable services. In the nine months ended September 30, 2003 and 2002, we were charged £19.7 million and £20.9 million, respectively for these services.

Our selling, general and administrative expenses include certain costs that are charged by a subsidiary of NTL for the provision of corporate services, including finance, legal, human resources and facility services, and for the provision of IT

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FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

services, including our use of the related IT equipment. In the nine months ended September 30, 2003 and 2002, we were charged £32.8 million and £31.2 million, respectively, for these services.

Other charges of £1.1 million in 2003 include £0.4 million of restructuring costs incurred by NTL Ireland for five employees and £0.7 million of costs allocated to us by a subsidiary of NTL. These costs are for employee severance and related costs. Other charges in 2002 include £1.1 million of restructuring costs incurred by NTL Ireland for 55 employees and £2.2 million allocated to us by a subsidiary of NTL consisting of employee severance and related costs. Charges allocated to us by a subsidiary of NTL are made on the basis of an allocation formula appropriate to each category of charge that is based on management’s judgment of a reasonable methodology given the facts and circumstances.

Depreciation and amortization expense has remained relatively flat. We are currently evaluating the remaining useful economic lives of our fixed assets. We expect to adopt new lives when the evaluation is completed. At this time, we have not yet quantified the likely impact on our depreciation charge upon the adoption of new lives.

We incur interest on our 2007 Senior Discount Debentures, which are denominated in US dollars, as well as interest on our capital lease obligations. Movements in our interest expense principally result from fluctuations in the US dollar/UK pound sterling exchange rates. We also incur interest on NTL Ireland’s loan from an affiliate of NTL, which is denominated in Euros and the interest rate of which is based on EURIBOR. Movements in interest expense to affiliates result from fluctuations in the euro/UK pound sterling exchange rate and movements in the EURIBOR rate.

Our results of operations will continue to be affected by exchange rate fluctuations. We are exposed to fluctuations in the UK pound sterling value of our 2007 Discount Debentures, which are denominated in US dollars.

Condensed Consolidated Statements of Cash Flows

We generated £8.2 million in our operating activities in the nine months ended September 30, 2003 compared with £20.0 million in the nine months ended September 30, 2002. The decrease in net cash provided by operating activities is primarily owing to net payments to affiliates and changes in working capital as a result of the timing of receipts and disbursements.

We spent £17.8 million and £27.3 million on purchases of fixed assets including connecting new customers to our network for the nine months ended September 30, 2003 and 2002, respectively.

During the nine months ended September 30, 2003, our members contributed further capital of £17.7 million. After deducting principal payments on our capital lease obligations, we raised a net £17.3 million in our financing activities in the nine months ended September 30, 2003. During the nine months ended September 30, 2002, NTL Ireland drew down a further £2.8 million under their loan agreement with a subsidiary of NTL.

Liquidity and Capital Resources

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

As of September 30, 2003, we had approximately £26.3 million in cash and cash equivalents on hand. We estimate that our capital expenditures and debt service requirements, net of cash from operations, will be approximately £6.0 million from October 1, 2003 to September 30, 2004. However we expect to require additional cash at certain points during the twelve months from October 1, 2003 to September 30, 2004 owing to the timing of our cash flows. Our management believe that cash and cash equivalents on hand at September 30, 2003, and cash from NTL will be sufficient for our cash requirements during the twelve months from October 1, 2003 to September 30, 2004.

Over the long term, we will continue to require cash to fund operations, service or repay our remaining debt and implement our strategy. In order to fund these requirements, we anticipate that we will use cash flow from our operations and may also need to issue additional debt or equity securities or may need to secure bank financing. Given the restrictions on

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FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2003

incurring additional debt that are in the indentures governing our outstanding notes, there can be no assurance that these sources of funds will be available to us.

Description of Outstanding Notes

Senior Discount Debentures

In November 1995, we issued $517.3 million principal amount at maturity of 11.2% Senior Discount Debentures due November 15, 2007, or the 2007 Discount Debentures. Interest accreted on the 2007 Discount Debentures at 11.2% per annum compounded semiannually from November 15, 1995 to November 15, 2000, after which date interest became payable in cash on each May 15 and November 15 through November 15, 2007. The 2007 Discount Debentures are redeemable at our option after November 15, 2000. The 2007 Discount Debentures contain restrictive covenants that limit our ability to pay dividends.

Loan Notes payable to NTL

In October 2000, NTL Ireland entered into a loan agreement with a subsidiary of NTL under which £80.9 million and £75.2 million had been borrowed at September 30, 2003 and December 31, 2002, respectively. The outstanding borrowings are due in October 2007. Interest is payable quarterly in arrears from March 31, 2001. The annual interest rate is set on January 1 of each year at the 12-month EURIBOR rate plus 1%. The effective interest rate at September 30, 2003 and December 31, 2002 was 3.73% and 4.32%, respectively. Accrued interest of £3,141,000 and £819,000 was included in due to affiliates in the consolidated balance sheet at September 30, 2003 and December 31, 2002, respectively.

Contractual Obligations and Commercial Commitments

We had no significant commercial commitments as of September 30, 2003.

The following table includes aggregate information about our contractual obligations as of September 30, 2003 and the periods in which payments are due.